In divorce cases there are three main areas of dispute: dividing up time with the children; division of the marital property; and child and spousal support. If you or your spouse is self-employed it can make all three of these areas even more complicated. Regardless of income, self-employment means an increased scrutiny of your finances and it may additionally require creative solutions when determining support amounts and how to divide the marital property.
Deciding What is a Marital Asset
Judges are required to divide the marital property equitably. However, before anything can be divided, marital property must first be determined. If you are self-employed and you ran your own business before the marriage, you may think that the business is clearly not a marital asset. However, this is dependent upon what your spouse contributed to the business in terms of time, expertise and money—it is possible that part of the business is marital property.
Finding All the Assets
When one spouse has an independent source of income, there is often a suspicion that he or she is hiding assets or purposefully underreporting his or her income. Moreover, when you manage your own books, it can be easier to hide assets in a divorce. In cases with a self-employed spouse, there is often a lengthy discovery process to make sure that all the assets are found and that all of the income is accounted for.
Setting Support Amounts
Support is largely based on income. However, most people who are self-employed have volatile incomes. There can be huge swings in net revenues year to year and even month-to-month.
Sometimes, one side may want to use the previous year’s net income as the basis for support because it was an unusually high or an unusually low year. Often, what is more accurate and fair to both sides is to use the average net revenue over a longer period of time. However, every case is unique. It is often up to the parties to come up with a workable solution or else the judge will impose one.
Child support and spousal support are not imposed for the same reasons. It is possible to use one figure as the basis for child support and a different one as the basis of spousal support. Judges have a special duty to make decisions in the best interests of the child in child support cases.
If you have any questions about divorce, including property division, custody, or support, please consult with a skilled DuPage County family law lawyer. Call Sullivan Taylor & Gumina, P.C. at 630-665-7676 to schedule your consultation today.