What Defines Income Under F.S. Ch. 61: From a Business Perspective

It’s really important to calculate income accurately in family law cases. The amount of income you have can affect things like alimony, child support, and attorney fees. Income for family law purposes might not be the same as income for taxes, and it can include things like salary, commissions, bonuses, and benefits from things like retirement or trusts. Some types of income, like disability benefits and unemployment compensation, are not included when calculating support. According to F.S. §61.302, when calculating child support, a person’s income should be determined monthly and include things like salary, bonuses, business income, disability benefits, and more. This list isn’t all-inclusive, but it gives examples of what should be included when figuring out child support. Some types of income, like investment income and business profits, may not be counted as income for alimony and child support if the person doesn’t actually have access to or control over the money. In one case, the court did not count a certain type of investment income because the person didn’t actually have the money, even though it was reported for taxes. However, in another case, the court did count the income because the person did have control over it. So, whether this type of income counts for alimony and child support depends on the specific situation. In the case of Oxley v. Oxley, the court decided that the husband’s income includes money from a trust, even if he doesn’t use it. This means that trust income is considered part of the husband’s income for child support purposes. Additionally, money received from investments and continuous gifts from family or friends can also be considered as income for child support. However, sporadic gifts are not included as income. In family law cases, the main rule for determining income is to see if a party actually has control over the income. If they own a business and can control the income from it, then it should be considered as their income. If they are a minority owner and don’t have control over the income, it shouldn’t be considered as their income. The party must actually receive the income for it to be considered as their income. If an employer pays for living expenses, it may be included as income for child support, alimony, and attorney fees, but the value of the benefit must be determined and it can’t be a small amount. In Jones v. Jones, the court said that things like free food and household supplies from a family-owned restaurant can be considered as income. This also applies to things like cars and gas provided by an employer, as well as clothing allowances and housing provided by a family business. However, a court is unlikely to consider flat rate per diem pay as income unless it covers actual expenses. In Ghen v. Ghen, the court said that a liability cannot be divided between parties as a marital liability and then subtracted from income for support, which would be considered double-dipping. Several courts have also said that a pension cannot be considered both an asset for distribution and income for support. In Lasala v. Lasala, the court said that renewal commissions from an insurance business can’t be considered as an asset or source of income for support. In Seither v. Seither, the court said that stock options can be considered income for support, but if they’re treated as an asset, they can’t also be considered income for alimony. In Harper v. Harper, the court said that the husband’s interest in a partnership provided him with extra income, but some parts of it were considered income for alimony while others were only considered as an asset for distribution. In a complex financial case, the court made a mistake in calculating child support because it didn’t consider the husband’s share of the income from the riding stable. The court was told to recalculate the child support. Stock options can be seen as either income or an asset for fair distribution, but if they are divided in the distribution, they can’t be used to determine income. So, a lawyer needs to examine where the income comes from to make sure it’s not double-counted in the case. Overtime and bonuses should be included in the determination of income for child support unless the court specifically finds that the overtime or bonus income won’t be available in the future. In some cases, temporary or limited overtime may not be included, but regular and voluntary overtime should be. The same goes for bonuses – if they are regular and continuous, they should be included as income, but not all bonuses will be counted as income by the court. The specific circumstances of the bonus will be considered when determining if it counts as income. In a court case, a husband’s bonuses were considered as part of his income for alimony and child support. Even though the bonuses were not guaranteed, the court included the smallest bonus amount in the husband’s income because it took out the uncertainty. Another case involved a professional football player’s signing bonus, which was also considered as income. When determining whether bonus and overtime income should be included in alimony and child support, the main factors to consider are whether they are regular and continuous, the amount of the bonus, and the pay structure of the parties. In divorce cases, it’s important to consider all sources of income when deciding on support payments. Some things, like one-time payments or things that don’t actually save money, might not count as income. It’s important for lawyers to carefully consider what counts as income in these cases. Alexander Caballero and Ingrid Anderson are lawyers who specialize in family law and have a lot of experience in this area. They wrote this article for the Family Law Section.

Source: https://www.floridabar.org/the-florida-bar-journal/what-defines-income-under-f-s-ch-61-from-a-business-perspective/