Understanding Divorce Grounds in Maryland: A Comprehensive GuideJanuary 5, 2024
In Maryland, determining income for self-employed individuals in family law cases, such as child support and alimony, can be complex and challenging. Self-employed individuals, including insurance agents, financial advisors, brokers, real estate agents, and sales representatives, often have fluctuating incomes that can be difficult to prove during divorce proceedings. In such cases, it is crucial to seek the guidance of an experienced Maryland family law lawyer who can navigate the intricacies of these situations and ensure a fair resolution.
Table of content
- Understanding the Factors Considered in Child Support Calculations
- Defining "Actual" Income for Child Support Calculations
- Evaluating Income for Self-Employed Individuals and Small Business Owners
- Additional Considerations for Determining Income
- High-Income Parents and Exemptions from Child Support Guidelines
- Imputed Income for Voluntarily Impoverished Parents
- The Role of the Court in Determining Alimony
- The Importance of Effective Legal Representation
Understanding the Factors Considered in Child Support Calculations
Child support awards in Maryland are typically based on the income of both parents. A Court follows specific guidelines when calculating child support obligations, taking into account various factors.
In addition to the parents' incomes, other considerations include alimony and child support payments made, health insurance premiums for the child, work-related child care expenses, and extraordinary medical expenses.
Defining "Actual" Income for Child Support Calculations
When determining income for child support calculations, "actual income" includes various sources of income. This encompasses traditional sources such as:
- alimony or maintenance payments received,
- commissions, and bonuses.
However, it also includes:
- income from pensions,
- Social Security benefits,
- workers' compensation,
- unemployment benefits,
- and disability benefits.
It is essential to consider all these sources when calculating child support obligations.
Evaluating Income for Self-Employed Individuals and Small Business Owners
For self-employed individuals and small business owners, calculating income can be more complex.
In these cases, actual income is determined by subtracting necessary and ordinary expenses required to generate income from gross receipts. This approach accounts for the unique financial considerations and challenges faced by self-employed individuals and ensures a fair assessment of their income for child support calculations.
Additional Considerations for Determining Income
In certain circumstances, other types of income may be considered when determining child support obligations. For instance, severance pay, gifts, capital gains, and prizes received can all be taken into account.
Overtime amounts earned through employment may also be included as actual income, provided they are certain and not speculative. Non-monetary benefits, such as fringe benefits, can be considered income if they reduce the parent's personal living expenses.
High-Income Parents and Exemptions from Child Support Guidelines
Maryland's child support guidelines may not apply to parents with a combined adjusted income exceeding $15,000 per month.
In such cases, the court considers the financial circumstances, age, physical condition, and needs of the children to determine appropriate child support obligations. The court exercises discretion in these situations to ensure a fair outcome for all parties involved.
Imputed Income for Voluntarily Impoverished Parents
If a parent has the ability to work but chooses not to, the court may impute income to them. This means that the court treats the parents as though they have income for the purpose of calculating child support.
To impute income, the court must find that the parent is voluntarily impoverished, indicating a conscious decision not to work despite having the ability to do so. Imputed income ensures that both parents' responsibilities are properly accounted for in child support calculations.
The Role of the Court in Determining Alimony
Unlike child support, Maryland law does not provide a specific calculator for computing alimony obligations. When determining alimony, the court considers various factors outlined in Family Law Section 11-106.
These factors include the length of the marriage, the standard of living during the marriage, the age and overall health of both spouses, the receiving spouse's prospects for becoming self-supporting, and each spouse's income. The court has broad discretion in awarding alimony, and its decision is typically upheld unless it is deemed unreasonable on appeal.
The Importance of Effective Legal Representation
The determination of income for self-employed individuals in Maryland family law cases requires a thorough understanding of the law and the ability to navigate complex financial situations. It is crucial to consult with a knowledgeable and experienced Maryland family law lawyer who can guide you through the process and ensure that your rights and interests are protected. An expert attorney will gather all the necessary information, advocate for a fair assessment of income, and present a strong case on your behalf.
Determining income for self-employed individuals in Maryland family law cases is a complex process that requires careful consideration of various factors. Understanding what constitutes "actual" income, evaluating income for self-employed individuals and small business owners, and considering additional sources of income are crucial in calculating child support and alimony obligations. Seeking the guidance of an experienced Maryland family law lawyer is essential to navigate these complexities and ensure a fair resolution that protects your rights and the best interests of your children. With their expertise, you can approach the process with confidence, knowing that your case is in capable hands.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as legal advice. It is always recommended to consult with a qualified attorney for personalized guidance and representation in legal matters.
About the author
Harry Baumohl is one of Maryland’s foremost family law practitioners. His areas of focus include but are certainly not limited to the following: experienced family law attorney, dealing with divorce, child custody, and high net worth divorce litigation with over four decades of an amazing track record and quality expertise. Focused on representing clients – for wives, husbands and same-sex couples, alike – typically with high family income, net worth and substantial and/or complicated asset scenarios. Expertly untangling complicated household monetary and family asset situations. Expertise in high conflict and ongoing parenting disputes. Prenuptial agreements as a planning tool. Mediation and collaborative family law.
Harry is a founder of Baumohl Hamburg LLC, situated in Pikesville, Maryland, Baltimore County, conveniently located right off the Baltimore Beltway. Significant representation and court appearances in surrounding areas, including but not limited to – Baltimore County, Baltimore City, Carroll County, Harford County, Howard County, and Anne Arundel County. To book a consultation with family law experts at Baumohl Hamburg LLC, call (443) 940-2000 or use the contact form.