Both child support and spousal support are court-ordered monetary payments associated with legal separation or divorce proceedings.
Child support is made from one parent to the other, generally the noncustodial parent to the custodial parent. Although state laws differ regarding child support payments, the amount of the payments is generally determined based on how much time the child lives with each parent, as well as income and finances. These payments are intended to provide for the financial needs of the child, and are necessary in order to ensure that both parents are fulfilling their financial obligations to their child.
Some examples of what child support payments should cover include, but may not be limited to:
- Food, shelter, and clothing;
- Medical care and health related expenses; and
- Educational expenses, such as private school tuition.
Alimony, or spousal support as it is more commonly known, refers to payments made from one spouse to the other following divorce proceedings. These payments are generally ordered in situations in which the divorcing spouses have unequal earning power, and have been married for a considerable amount of time.
In order to determine whether spousal support payments are necessary, a judge will also assess one spouse’s financial need and whether the other spouse has the ability to pay. Spousal support is intended to equalize the financial resources of a divorcing couple.
What Is Depreciation In Relation to Child Support and Spousal Support?
As previously mentioned, calculating child and/or spousal support varies on a state by state basis. However, the following factors are always considered when determining child support payments:
- Both parents’ income;
- Custody orders;
- Number of children;
- The age of each child;
- The marital status of any children;
- The child’s standard of living prior to the separation or divorce; and
- The child’s individual needs, as well as what is in their best interest.
Spousal support is generally calculated by considering the following factors:
- Each party’s financial background;
- Each party’s Income level and earning capacity;
- Property distribution in a previous divorce or legal separation case;
- Whether any children are involved;
- Whether the receiving spouse has been remarried, or is currently living with another partner; and
- Various other economic factors, such as local inflation or depreciation rates.
Depreciation refers to a gradual loss of property value over time. This concept is commonly applied to property, such as real estate and vehicles. The concept of depreciation is also commonly applied to businesses when their value or ability to bring in profit has been reduced over time.
In a family law setting, depreciation refers to business cost allocations, as opposed to the value of property. Family courts must factor in depreciation when calculating child support or spousal support, although this is up to the court’s discretion. Generally speaking, depreciation is intended to lessen the total figure for the paying spouse’s income.
As such, if the paying spouse can claim depreciation as an expense, they will be required to pay less in child or spousal support. Alternatively, the court may “add back” the depreciation to the overall calculation of gross income. When “add back” principles are applied, the paying party generally must pay more, as their income figure will be higher.
How Does Depreciation Affect Child Support? Are the Rules Different For Spousal Support?
To reiterate, in many jurisdictions, depreciation is automatically “added back” to the paying spouse’s income figure. This generally results in a higher income figure, and higher child support payments as a result. Although this can vary by jurisdiction, it is the standard practice of most courts to add back depreciation into the income figure.
The reasoning is that most courts do not consider depreciation to be a “business expenditure” for support payment calculations. Because of this, the paying parent cannot use a depreciation claim in order to reduce the amount of income made available for child support.
While the add-back rule is generally automatically applied for child support calculations, it is usually opposite in terms of spousal support. In many of the cases involving spousal support, depreciation is not added back which results in lower spousal support payments. Courts may sometimes apply two different standards for support.
One standard would be used for child support orders, while a different standard would be used for spousal support orders. Obviously, this can become very complicated in cases involving both child support and spousal support, which happens fairly often.
Once again, these determinations vary on a case-by-case basis according to the needs of the spouses and/or children involved. There is no set rule in terms of factoring in depreciation for child and/or spousal support. Courts have a considerable amount of discretion when determining support awards.
Can an Expert Assist in Calculating Child or Spousal Support?
If your family law case is complex or high-asset, you may consider utilizing an expert when determining child and/or spousal support. Experts can act as valuable consultants. Depending on the circumstances of each specific case, there are many different experts that you may consult regarding child and spousal support payments.
Some examples of the types of experts that are most commonly used include, but may not be limited to:
- Family Economists: A family economist may be hired in order to determine accurate living costs, which are based on the cost of living. The cost of living is going to vary by location, in addition to other relevant factors;
- Financial Analysts: Financial analysts assist in managing assets, and can create support payment plans to be approved by the court. A financial analyst may be especially helpful if there are many large assets to be considered when determining child or spousal support payments;
- Health Care Professionals: Generally speaking, health care professionals are used to prove whether a spouse is able to work due to an illness or disability. They may also be used to help determine the extent of a child’s specific medical needs and their associated costs; and/or
- Vocational Training Counselors: Vocational training counselors are a very specific type of expert that may assist unemployed spouses in finding work. Doing so can eventually lead to modifying the amount needed for support payments.
The primary concern that discourages most people from hiring an expert is how much they can cost. An area attorney can assist in finding an expert who is qualified and more affordable, or within your budget range. If you wish to find an expert, you could contact your local university or college.
Nearly every type of expert that was previously mentioned can be found at a university or college. Additionally, an expert from a local educational organization will most likely be able to provide the lowest cost for their services.
Do I Need an Attorney If I Have Issues With Depreciation Associated With a Support Order?
If you have any questions regarding your state’s stance of depreciation in relation to child and/or spousal support orders, you should consult with an experienced and local family law attorney. Someone in your area will be best suited to helping you understand your state’s specific laws, and how those laws may affect your case.
An experienced and local family law attorney can help you throughout the entire legal process, from filing for divorce to requesting support payments. Your attorney can also help you modify any existing support payment plans, and will also be able to represent you in court, as needed.
