The court in In Re Marriage of Blazer, (2009) 176 Cal. App. 4th 1438, held that under Family Code Section 4320 it was within the trial court’s discretion to calculate a husband’s income without regard to all income received from the business where there existed a valid reason for the funds to be reinvested in the business.
In this case, the husband was awarded the business in the divorce. At trial, the parties disagreed on whether all of the husband’s business earnings should be considered in determining spousal support. In order to expand the company, the husband reinvested his income into the business. The husband owned and operated a company that sold fruit and produce. In order to cut out the middleman and lower costs, the husband expanded the company to include growing and distribution. When calculating the spousal support amount, the trial court excluded the money from the husband’s income that he used to reinvest in the company. The court heard testimony from an expert and decided that the business expenditures were reasonable expenses and that the husband should not be charged with these expenditures as his income.
The court further held that there are different standards for calculating income for employed and self-employed parties. When a party is an employee, any income earned as salary, bonus income, stock, options, fringe benefits, etc. is calculated as income. However, when the party is self-employed it is left to the discretion of the courts as to what counts as income for spousal support purposes.
As demonstrated in this case, the laws on income and calculating spousal support can be complicated and require the assistance of an experienced family law attorney.
Wallin & Klarich has over 30 years of experience in family law. Our Southern California spousal support attorneys know what works in a divorce case, and we are prepared to fight to get you the best possible outcome. With local offices to serve you throughout Southern California, we can be there when you need us — wherever you are. If you’re thinking of hiring an attorney for a mediated divorce, call us today at 1-888-749-7428 or visit us on our website at www.wklaw.com. We will be there when you call.
