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Income and Spousal Support in California Divorce Cases – In re Marriage of Whalen

No two divorce cases are alike. In a recent ruling by California’s Second District Court of Appeals, the court explained that how judges handle issues like spousal support may vary widely based on the spouses’ individual circumstances. That includes factors like how much money each person makes.

tightened-100-dollar-roll-1377964-mHusband and Wife separated in June 2009 after nearly 24 years of marriage. Both spouses, who had two adult children at the time they split up, worked throughout the course of the marriage. Husband was employed in the commercial real estate industry, earning about $200,000 per year on an entirely commission basis. His income fell when the market tanked in 2009, however, and by 2011 he was making about $54,000. Wife, meanwhile, started a business selling dental supplies in 2011 and made about $27,000 that year after accounting for business expenses.

During the proceedings, Wife requested that the trial court award her permanent spousal support. As the court later explained, the couple maintained a “very high” marital standard of living at about $522,000 per year, and the monthly support Wife needed to keep it up was roughly $14,300. The trial court also found, however, that the couple’s current income wasn’t enough to support this lifestyle. Based on those income levels, the court ordered Husband to pay Wife $1,000 per month in support.

Noting that Husband’s annual income had been fluctuating wildly in recent years, the trial court further explained that it would cap Husband’s income at $420,000 for purposes of increasing the support payments based on changes in his income in the future. That figure was the maximum amount that Husband earned in the last five years of the marriage. The court also declined Wife’s request to set a specific formula for calculating how support payments should increase based on increases in Husband’s income. It ordered the former spouses to exchange income information every six months and retained the jurisdiction to modify the $1,000 spousal support amount in the future.

Affirming the decision on appeal, the Second District said the trial court didn’t abuse its discretion in declining to set a fixed formula for calculating future support payment changes. “Because trial courts have such broad discretion, appellate courts must act with cautious judicial restraint in reviewing these orders,” the Court explained. Unlike in a previous case, in which the First District Court of Appeals agreed to base future support payment changes on a designated percentage of one spouse’s annual bonus, the Court noted that both Husband and Wife were paid on a commission basis that varied widely and also included deductions for relevant expenses. As a result, the Court said it was appropriate to consider fluctuations in income as they arose, rather than setting a fixed formula for support purposes.

As this case makes clear, spousal support and other issues in divorce cases can be resolved in a variety of ways based on the individual circumstances in play. Experienced divorce attorneys play a critical role in these matters by ensuring that a court is fully informed of the divorcing spouse’s financial and other situations to ensure that these decisions are made in a fair and accurate manner.

With more than 30 years of experience, San Jose divorce lawyer John S. Yohanan is an accomplished divorce attorney who has helped a number of clients resolve spousal support and other matters on optimal terms. Call our office at (408) 297-0700 or contact us online to schedule a consultation.

Related blog posts:

Business Income and Spousal Support in California Divorce Cases – In re Marriage of Tani

Pre-Divorce Agreements and Financial Disclosures in California Divorce Cases – In re Marriage of Evans

Court Says Mediated Settlement Agreement is Admissible, Enforceable – In re Marriage of Daly and Oyster