Parents have a mutual duty to support their minor children. Ideally, parents come to an acceptable agreement about financial support, an agreement that the court will approve. However, if they cannot or will not do so, a court must decide whether child support will be paid from one parent to another.
The California State Legislature has found that the “state’s top priority” in setting child support is the “best interests of children”. For this reason, California law sets forth guiding principles that courts must use when determining child support. These principles allow for both parents’ standards of living to be considered. They also allow for child support to be used to reduce significant disparities in the parents’ living standards.
The factors considered in determining child support are set by law in California. A formula is used that takes several factors into account:
- Both parents’ actual income;
- The higher-earning parent’s net monthly disposable income;
- The percentage of time that each parent will have “primary physical responsibility” for the children; and
- The combined net monthly disposable income of each parent.
In addition, California courts must take into account the parties’ respective health insurance coverage. There is a proportional increase in the amount of support for each additional child.
Once the amount of child support is established using the formula, it may be affected by other issues, including but not limited to the following:
- Extraordinarily high income of one parent;
- Different time-sharing arrangements;
- The amounts spent by each parent on housing; and
- Special medical needs of the children.
In most cases, the income of the paying parent’s new spouse or partner is not taken into account as actual income. However, it may be considered if a parent quits his or her job to reduce income or if a parent attempts to hide income.
The health and well-being of your children are important not only to you, but to the State of California. In hotly contested child support matters, you need an attorney to fight for you and your child. The attorneys at the Law Offices of Judy L. Burger have extensive experience in divorce, child custody, and child support matters. Make the call today to learn how our attorneys can protect you and your children: (415) 293-8314.
California law mandates that one of the predominant factors in setting the amount of child support is the actual income of the parents. As you might imagine, this can be very difficult if one or both of the parents are self-employed.
Because parents have a mutual duty to support their children, the parties to a divorce proceeding must disclose all aspects of their finances. All assets, liabilities, obligations, earnings, accumulations, and expenses must be disclosed. Assets must be disclosed even if they are owned as separate property. By law, self-employment benefits may be considered by a court in determining a parent’s gross annual income.
Full disclosure is critical to allow the family court to make a proper order of support for the children’s needs. A statutory process is in place to ensure that proper disclosures are made through the submission of certain forms. These forms include a Schedule of Assets and Debts, as well as an Income and Expense Declaration.
When a party is self-employed, however, he or she has control over documents that would be used to establish his or her actual income. These documents might include profit and loss statements, loan applications, credit card statements, and reports showing monthly expenses. The danger of nondisclosure is enhanced in these situations because the business owner has power over the creation and retention of these documents.
Forensic accountants may be used when self-employment is an issue in a family law matter. These specialized accountants are trained in both sound accounting practices and investigative skills. They specialize in reviewing financial documents with an eye toward tracing funds and locating missing funds or documents. They also testify in court about their findings, to ensure the proper amount of income is attributed to a self-employed parent.
When the actual income of a self-employed parent is an issue, it is critical to hire an aggressive family lawyer who has significant experience in business matters. Judy Burger comes from a business background and has worked extensively in highly contested divorce cases involving forensic accountants. Call her today at (415) 259-6636 to learn more about how she can help you.