If you own a business, your income may rise and fall from month to month. The business may pay you more during a strong period and less when sales slow down. That can make child support or alimony harder to discuss during divorce. One paycheck or tax return does not always capture the full story.
Mediation lets you and your spouse look at income over time instead of relying on one recent figure. Historical business Records can give both of you a better sense of cash flow.
Look beyond the recent numbers
For alimony, New Jersey law requires the judge to look at several different factors including but not limited to the supported spouse’s actual need, your ability to pay and your earning capacity. The New Jersey Child support Guidelines also handle business income differently from a regular paycheck.
For child support, your taxable business income does not always match the figure the guidelines use. The guidelines start with business receipts and subtract ordinary and necessary business expenses. They also count some business-paid benefits when those benefits lower your personal living costs. Furthermore, when income fluctuates from year to year, the guidelines and case law instruct us to use an average from prior periods.
Use mediation to work through disagreements
With months or years of records in front of you, you and your spouse can focus on the figures you disagree about. The mediator helps both of you discuss those differences and explore possible settlement terms. You can then decide whether to accept any proposed settlement.
You might also compare a proposed support amount with what you have earned over time. That keeps the discussion tied to your income history instead of one anomalous strong month or, conversely, an unusually slow month.
Bringing useful records to the discussion
You should gather recent tax returns and profit-and-loss statements. Records showing what the business pays you or perquisites the business provides to you can also give both sides useful figures to review during settlement talks.