When couples in Texas opt to end a marriage, alimony or child support may be part of the settlement agreement. When this is the case, judges generally have some leeway when determining the specific amount to be paid. While there are variations with state laws concerning alimony and child support, courts generally consider certain types of income when making payment determinations.
Generally, any type of earned income or compensation is considered for child support and alimony purposes. In addition to what’s earned from an employer, a judge may consider recurring passive income like dividends on investments. Partnership distributions, deferred compensation and retirement accounts are some of the other potential sources of income that could be considered. Even signing and performance bonuses and other employment-related perks could be fair game.
While it’s not unusual for the court to look at recent income tax forms, there’s a tendency to dive deeper to find possible unreported income, especially if the paying spouse is living above the means suggested by what’s on tax documents. A judge sometimes assigns an income value if a spouse’s income isn’t in line with what they could be earning. For instance, a spouse with a Princeton degree who downgraded to a job working as a store manager to avoid high alimony payments may still be assigned a higher income value based on their earnings potential.
A divorce attorney may recommend that a client with a higher-than-normal income due to unique circumstances consider delaying the divorce process, if possible, until their income is back at its normal level. Another option is for a spouse to request a modification provision, which would trigger an automatic payment determination reevaluation if their income level changes. A generous, asset-heavy settlement may also convince a spouse to agree to a lower amount for child support and alimony.