Family court judges in Michigan are given broad discretion when it comes to making child support or spousal support determinations. Typically, the court will consider any compensation or earned income as well as passive income. Passive income might include income from investments or other things. The court may also look at a spouse’s salary, bonuses, carried interest, deferred compensation, retirement contributions, employment perks or partnerships distributions.
The court has a lot of leeway to look into reported finances as well. While most judges will begin with the person’s most recent income tax returns, they can move on to examining bank accounts and other sources to find unreported income or other means of supporting the former spouse and children. In a case where the court finds the payor spouse is not earning as much as he or she could, it has the power to impute income at a higher rate.
The court’s power in these matters does not prevent couples from taking steps to make things easier. For a spouse who is worried about future cash flow, it may be possible to arrange an asset-heavy division of property that lowers support obligations. It can also be a good idea to include a provision in the divorce agreement calling for a modification of support obligations if income decreases by a specified percentage.
An attorney with experience in family law might be able to help a client who is going through a divorce in Michigan by identifying marital and separate property. An attorney can also help the client prepare for the court’s examination of income streams and for the evaluation of child support or spousal support obligations.