How much am I going to have to pay my spouse in alimony or child support?

Here is a top valuation issue every business owner should know before you file for divorce.

7. How much am I going to have to pay my spouse in alimony or child support?

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One of the ways a valuation expert may also get involved in a divorce is in the calculations of maintenance or alimony and child support. The expert will review the personal tax returns and business information in order to determine the income available to the couple. They are looking at what each person has made in the form of salary, W-2 wages, consulting agreements, or income from various business interests. Typically the expert will review 3 to 5 years of information and see if there are any trends or patterns.

If one spouse has not worked over the past several years, in order to be at home with the family, there could be an additional expert hired call a vocational rehabilitation expert. This expert will determine what that person could make if they were to enter the workforce given their background, education, prior experience and/or work history. This typically is a different expert and one that only focuses in this narrow job, determining a reasonable salary for a non-working spouse, or spouse that is not working at their full potential.

After the voc rehab specialist determines the non-working spouses salary, then the valuation expert could determine a reasonable salary for the working spouse. Many times an executive, with a W-2 salary and bonus, is easier to determine the salary, than that of a business owner which may fluctuate more with a business cycle. This is where the two experts pay differ in opinion – because of the variability in the historical pay. Many times if the business is not doing well the owner may not take as much in salary or distributions and when the business is doing really well then they take a little bit more. So we are there to determine what would be reasonable going forward.

There are times when a business owner may try to take less money out of the business for salary when they're getting divorced because they think that that will be show a better picture to the court. But many times the court is going to look at the history of payments and a big drop off in the year prior to divorce could again signal that it is just a one time situation so this is another case of where you should just continue doing things as you normally do them, So that it doesn't show the appearance of you trying to manipulate the numbers for your benefit.

So, I am considering filing for divorce, but want to be prepared - What should I do next?

Give us a call! No really, you should reach out to someone who specializes in valuations for the purpose of divorce. There may be many valuation companies near you, but do they understand the divorce court system in your state? That would be a good first question to ask. Then see how many times they have testified. Are they trained as a mediator? Do they understand how to negotiate settlements with other experts?

If you have any additional questions or would like to talk about your specific situation, please give us a call or text us at (314) 541-8163 or check out our website at http://www.ValuationStLouis.com

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