Self Employed Spouses, Parents, Child Support, Divorce and Proving Income

One fact that presents itself to me time and time again as a family lawyer in New York, and Long Island, is that CoupleMoneyFightdivorce and family law can deliver a wide range of different complications. From issues regarding child custody, equitable distribution, to matters concerned with child support, spousal support and at times, orders of protection, each unique family brings with it specific issues to navigate. One of the most common issues that raises conflict in family law is proving the income of the other parent or a spouse.

Child support, in New York is payable to the residential custodial parent until the children are emancipated.  Spousal support is what a court can award, under appropriate circumstances, when a couple is still married.  Maintenance, f/k/a as alimony is the payment that a spouse makes to another spouse after a divorce or during the process of a divorce. The purpose of this payment is to help the less monied spouse get in a position to be self-supporting. In some cases, spousal support can also be useful for giving supported individuals the finances they need to gain the training they need to earn employment in a new job. In New York, as of 2016, there are guidelines now, based on income, for maintenance, spousal support and child support.

The challenge sometimes becomes, then how does one prove income when the other side of the case is being less than forthright?  This might happen when someone works off the books or is self-employed.

Determining Accurate Income Details

If one or more of the parents or spouses within a case is working off the books, self-employed – working as a business owner, licensed professional, or independent consultant perhaps – then the matter becomes even more complex. Not only do you need to work out the details of maintenance or child support, but you also need to find a way to prove the other parent’s income.  Proving the income is essential because it represents a key factor for the courts to consider when it comes to deciding whether to award spousal support, child support, and attorney fees. If your spouse was a standard employee, then getting the information you needed for spousal support would be simple enough – as you’d be able to simply look at his or her paychecks. However, providing the income of a spouse who is working off the books or is self-employed can be dangerous, as many self-employed people are less than stringent with their deductions and may claim a large amount of expenses.

Showing lifestyle is one way to try to prove one’s maintenance or child support self employed income.  An analysis of one’s expenses, compared to the claimed income, may reveal that the stated income does not make any sense.  How could someone be doing all that they do with only the resources that they claim?  Proof of assets and activities might come in the form of documents, photographs, social media posts, witnesses.  A private investigator might be useful to gather evidence as well as other techniques detailed below.  Often times, someone’s answer to the question of “How do you pay your expenses if your income is only as you claim?” will be “Someone else pays my expenses.”  Often, a court may then “impute” or add in income to that party based on the expenses that someone allegedly pays for them.  There are other reasons that income can be imputed.  Imputation of income will be the subject of a future blog.

Many clients come to me asking how they can make sure that the income information that they receive from their self-employed ex is correct. Unfortunately, it’s very difficult to ensure that you are getting the full and accurate information that you need from your ex, although all parents or spouses in a divorce or family law case are encouraged to provide accurate information if they want to avoid further penalties such as perjury charges or to otherwise incur the wrath of the court. During a divorce or family law case, when a motion is filed for attorney fees, child support, spousal support or maintenance, each side will be required to provide information regarding their typical income and expenses. No matter the reason behind the request for this information, the law of New York dictates that these forms must be filled out correctly. For self-employed people, perhaps a profit and loss statement, in addition to tax filings could be useful.

Discovery and Forensic Accountants

One potential option that spouses undergoing a divorce may consider, is utilizing discovery techniques. While discovery can be costly and often quite time consuming, it may also be essential to the process of proving your spouse’s income. The good thing about divorce litigation is that most information is discoverable and relevant to the case. If you are asking for information related to someone’s income, then this should be permitted by the court. In other words, if you ask for the bank statements of a spouse, as well as information regarding his or her self-employment, and he or she refuses to provide them, you may request that the court compels the spouse to produce such documents. For instance, subpoenas can be issued that require an ex, or soon-to-be ex-spouse to hand over more information about their current and foreseeable income as a self-employed person.

Another potential solution is to request a court to appoint, or for an individual to hire a forensic accountant to work alongside you in your particular case. In some instances, this may be the only method available for accurately determining what your spouse makes in his or her career. These accountants have the potential to look at documents held by your spouse and figure out whether the actual income a spouse earns is applicable in terms of spousal support. In certain cases, the court might choose to appoint forensic accountants to evaluate the claimed income of a company.

Be Diligent

Though it can be very difficult for most couples to foresee an upcoming divorce, it’s worth watching over the accounts and details that your partner or spouse generates during his time working as a self-employed individual – if you are concerned that your relationship or marriage may be in trouble. Sometimes, simply watching over your spouse’s bank statements could help you to get a better idea of how much your spouse earns on a regular basis. It’s safe to say that proving the self-employment income can be time consuming, difficult, and sometimes even costly. However, sometimes it’s important to put this additional effort into your case if you believe that you will need consistent spousal support to help you maintain a good lifestyle following the end of your marriage.

To learn more about the details of spousal and child maintenance, or to discuss what you might need to do to pursue your best interests during a divorce, please contact me, Mr. Darren M. Shapiro at your earliest convenience. You can either schedule your free initial consultation for up to half an hour, or arrange a free mediation consultation for up to half an hour with your spouse. Get in touch either over the phone at 516-333-6555 or through our online form.