Decoding Income Discovery in Family Law Cases

October 15, 2024

In family law, understanding a party’s income is crucial for determining support obligations. This blog breaks down how to discover income based on various employment circumstances, from salaried employees to self-employed individuals and retirees.


Salaried Employee

When dealing with a salaried parent, determining income is usually straightforward. Tax returns and current payroll vouchers (pay stubs) typically provide the necessary information for calculating guideline support orders. It’s essential to consider not just the salary but also any employee benefits, which may include bonuses, commissions, stock options, and various allowances. Courts have the discretion to include these benefits when assessing a parent's financial obligations, as seen in cases like Marriage of Stanton (2010). If the opposing party is uncooperative, document production requests or subpoenas may be necessary to obtain this information.


Practice Tip: Even seemingly simple pay stubs can be tricky to analyze; some employers list benefits in a confusing manner. If needed, obtain the employee’s permission to discuss these details with the employer’s payroll department.


Owner/Shareholder of a Business

For parties who own businesses, it’s crucial to gather detailed information about salaries, bonuses, corporate profits, and other perquisites. Both personal and corporate tax returns should be obtained, as the income considered for child support includes not only direct compensation but also profits from the business. An attorney must review corporate financial statements and various transaction records to uncover personal expenses disguised as business costs. Keeping an eye out for signs of self-dealing is essential to ensure that all income is accurately represented.


Practice Tip: A forensic accountant can be invaluable for determining the “cash available” for support, especially when business finances are complex.


Self-Employed Party

Self-employed individuals must file IRS Form Schedule C with their tax returns. Although courts may presume the accuracy of these returns, recent cases indicate that this presumption is not absolute, especially for self-employed parties. The burden of proof may shift to the self-employed individual to demonstrate the correctness of their reported income, as highlighted in Marriage of Hein (2020). Attorneys should gather various financial documents to verify reported income, including checking account statements and invoices, especially in cases where cash transactions may obscure actual earnings.

Practice Tip: Be cautious about the implications of challenging reported income and consult with your client regarding potential risks and protections under the “innocent spouse” doctrine.


Retired Party

Retired individuals still have child support obligations. Courts will evaluate income as described in Fam C §4058, even from retirement accounts like IRAs that a party chooses not to access. If a retiree can withdraw funds without penalties, it’s reasonable to argue that those funds should be available for child support. Expert testimony can provide insight into the retiree’s financial capabilities, including potential income from investments.

January 9, 2025
Discussing finances and future planning can be uncomfortable when it comes to marriage. Yet, as many couples discover, clear communication and thorough preparation can lay the foundation for long-lasting harmony. Prenuptial agreements—also known as “prenups”—are increasingly common tools for couples who want to clarify their rights and responsibilities before walking down the aisle. Unfortunately, misinformation often leads to misunderstandings and unnecessary anxiety. At M.C. Law, P.C., in Los Angeles, we believe in empowering clients with knowledge. Today, we’re tackling four common myths about prenuptial agreements to help you separate fact from fiction. Myth: Prenups Mean You Don’t Trust Your Partner One of the most pervasive myths is that a prenuptial agreement signals distrust or doubt. In reality, many couples who choose to draft a prenup have complete confidence in their relationship. They view the agreement as an opportunity to have honest, forward-looking conversations about finances, property rights, and future goals. Rather than indicating a lack of trust, a well-constructed prenup can foster greater understanding, open communication, and mutual respect for each other’s financial interests. Myth: Prenups Are Only for the Wealthy It’s easy to assume that prenuptial agreements are only necessary for wealthy individuals or those who own multiple properties and substantial business interests. However, couples of all income levels can benefit from clearly defining their financial landscape. Whether you’re worried about protecting a family heirloom, outlining rules for handling debt, or ensuring both parties agree on how to manage future assets, a prenup can provide peace of mind. In California, these agreements help protect both parties, regardless of the size of their bank accounts. Myth: Prenups Are “Set It and Forget It” Documents Some couples believe that once they’ve signed a prenup, it becomes an unchangeable document destined to gather dust. On the contrary, a prenuptial agreement can be revisited and amended, provided both parties agree. Life events—such as career changes, the birth of a child, or the acquisition of new assets—may warrant adjustments that keep the agreement fair and relevant. With proper legal guidance, you can ensure that your prenup evolves with your relationship, reflecting each spouse’s evolving needs and priorities. Myth: Prenups Lead to Unfair Outcomes While it’s possible to have a poorly drafted agreement that favors one partner, an ethically created prenup aims for fairness. Both parties should be represented by their own legal counsel to ensure that terms are equitable, transparent, and fully understood. California courts will not enforce agreements deemed unconscionable or signed under duress. By approaching the drafting process openly and honestly—and with the help of skilled attorneys—couples can create a prenup that protects both sides and strengthens their trust in each other’s integrity. Prenuptial agreements don’t have to carry a stigma. Rather than casting doubt on a relationship, they can serve as valuable roadmaps that guide a couple’s financial life through all of marriage’s twists and turns. At M.C. Law, P.C. in Los Angeles, we help clients navigate California’s legal landscape to create prenuptial agreements that are well-informed, fair, and adaptable. By debunking the myths and separating fact from fiction, you and your partner can enter marriage with a deeper understanding, a clearer vision, and a more confident commitment to each other’s futures.
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California’s Compromise of Arrears Program (COAP) helps eligible parents reduce child support debt owed to the state by negotiating a lower payment based on financial hardship. This program offers relief while ensuring parents stay current with ongoing child support obligations.
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Determining paternity is a crucial step in securing parental rights, ensuring a child’s access to important benefits, and fostering healthy family relationships. In California, establishing legal fatherhood goes beyond mere DNA— it has far-reaching implications for child custody, support, and inheritance. Whether you are a mother seeking support or a man looking to protect your parental rights, navigating the process can seem overwhelming. At M.C. Law, P.C., in Los Angeles, our dedicated team guides clients through every step, providing the knowledge and advocacy they need to confirm paternity and build a stable foundation for their family’s future. Importance of Legal Paternity A legal determination of fatherhood confers numerous benefits and responsibilities. Beyond affirming a parental bond, it ensures that a child receives financial support, access to health insurance, and eligibility for benefits such as Social Security. It can also shape decisions regarding custody and visitation. Without legal paternity, fathers may face hurdles in asserting their rights, and children risk losing essential support and a meaningful relationship with their dad. M.C. Law, P.C. helps families recognize these stakes, working to ensure that every child benefits from the security and stability that comes from having legally recognized parents. Voluntary Paternity Acknowledgment The simplest path to establish paternity for unmarried parents often involves the Voluntary Declaration of Paternity. When both parents agree on the father’s identity, they can sign this legally binding document at the hospital after the child’s birth or later at an approved agency. This streamlined process saves time, avoids court involvement, and provides fathers with immediate legal rights. Still, it’s vital to understand the implications fully. M.C. Law, P.C. helps clients evaluate whether a voluntary declaration is the best route, ensuring that both parents make informed decisions aligned with their family’s future. Seeking Court Intervention to Confirm Paternity Not all paternity cases are straightforward. Sometimes, disputes arise, or one parent may be unwilling to cooperate. In these scenarios, establishing paternity typically requires court intervention. The courts can order DNA testing and evaluate evidence to determine the child’s biological father. Once confirmed, the court can issue orders covering child custody, visitation, and support. At M.C. Law, P.C., we assist clients through every aspect of this process—from filing the appropriate legal documents to representing them in hearings—so they can achieve a fair and timely resolution. Protecting Your Legal Rights and Interests  Establishing paternity is just the first step in securing a father’s involvement in a child’s life. Once recognized, fathers can seek legal custody or visitation rights and play an active role in their children’s upbringing. Additionally, confirmed paternity ensures that children benefit from paternal health information, family medical histories, and emotional support from both sides of their family tree. Our team at M.C. Law, P.C. helps clients exercise their rights, maintain their responsibilities, and uphold their child’s best interests at every turn—whether they are pursuing shared custody or advocating for balanced parenting plans. Confirming paternity is about more than biology; it’s about establishing a firm legal footing that supports a child’s emotional and financial well-being. By taking proactive steps—whether through voluntary acknowledgment or court proceedings—families can create a stable environment that honors the significance of paternal involvement. At M.C. Law, P.C., our Los Angeles-based team understands the importance of these vital legal determinations and is ready to guide families through the intricacies of California’s paternity laws. With the right support, you can ensure that fatherhood is recognized, protected, and valued for the benefit of everyone involved.
By Mayasha Christian November 5, 2024
Starting January 1, 2026, California will implement Senate Bill 1427, allowing couples to file a joint petition for divorce, promoting a more cooperative approach to ending marriages. This change aims to reduce the adversarial nature of divorce proceedings, ultimately benefiting families, especially children, by fostering a smoother transition during a challenging time.
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Requests for continuance in family law hearings must be made promptly and with solid justification, as courts are reluctant to grant them without good cause.
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Understanding the Preliminary Declaration of Disclosure is crucial in family law cases, as it sets the stage for financial transparency between parties. At M.C. Law, P.C., we’re here to help you navigate these requirements and protect your interests.
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