In many divorces, alimony and child support create the most anxiety for couples about to begin negotiating a settlement, but in reality they are often the easiest issues to resolve. Expectations or fears about alimony are usually unrealistic, and the minimum amounts required for child support are quite specific and easy to calculate for most families.

In this section we will explain what goes into making a decision about alimony, and we will define the three types of alimony (permanent, temporary, or rehabilitative) which it may be appropriate to consider. We will also explain the role of the child support guidelines provided by every state, and how you can make your own decisions in mediation about child support.

The word alimony describes support payments made by one ex-spouse to the other. In some states this is called maintenance or spousal support. Few states have legal guidelines about alimony. Some states continue to grant long-term alimony if there has been a long marriage and there will be a significant disparity in earning capacity, but in recent years the trend has been away from providing life-long income for the former spouse. In most states, alimony is paid if there is a significant imbalance in income, and only to allow the less-moneyed person to become self-supporting over a specific period of time through education or special training. Spousal support is also sometimes provided for a specific period of time so that a parent can stay home to care for a very young child. In questions one and two, we will explore some of the common sense factors which you will want to consider in deciding whether alimony is right for your situation.

Unlike alimony, each state does have guidelines which describe what child support must include. In this section, we answer several questions about how child support payments are calculated. Your own agreement may vary from the guidelines in your state, but only in rare circumstances is it permissible for the total amount spent on your child to be lower than the guidelines' minimum. In most situations, couples find that the minimum amounts described in the guidelines are affordable, and we have found in many of the divorces we have mediated that parents were willing to commit more than the state requires so that they could provide "extras" for their children.

If there is very little money or income, child support will be considered first. The best interests of the child is an important principle in divorce law, so alimony can only be discussed after provisions have been made for the children's needs. The IRS treats child support and alimony very differently.

Below is list of commonly asked questions about alimony and child support. You can either click on a particular question to veiw the answer or simply scroll down to view all the questions with their answers.

1: Under what circumstances can I get alimony?

2: What role does fault play in negotiating for alimony?

3: How do we determine how much alimony is fair?

4: Do alimony payments stop if I live with a new partner (cohabit) or remarry?

5: Will my alimony payments be affected if my spouse's income changes drastically? Under any circumstances?

6: How can I be certain that alimony payments will continue if my ex-spouse dies or becomes disabled?

7: Who decides how much child support is necessary and what does it include?

8: What are some of the reasons the court will accept if we negotiate an agreement where I pay less than the child support guidelines?

9: Can child support be increased or decreased after the agreement is signed?

10: Until what age do we have to support our children?

11: Does child support have to be spent directly on my children?

12: Must I pay child support to my ex-spouse when our child leaves home for lengthy periods for summer camp or school?

13: Who pays for the children's medical bills? Health insurance?

14: Who pays for child care?

15: Must we pay for college?

16: I will be the custodial parent, but my spouse tells me that I'm responsible for child support too. Is that possible?

17: If our child spends more or less equal time with me, why should I pay child support?

18: How can I be sure that child support will continue if something happens to my ex-spouse.

19: I have child support obligations to children by a prior marriage. How will that affect the child support payments I will be negotiating in this divorce?

20: If one of us remarries, how does that affect child support?

21: My spouse intends to change careers, and the new career will pay much less. Is that allowed, and how will it affect child support?

22: My spouse gets paid in cash. How can child support be calculated fairly?

23: My spouse takes so many business deductions that very little income shows up on our personal tax return. How can we figure out the right amount for child support?

24: How will the child support part of our agreement be enforced? I want to be generous when I negotiate my child support payments, but will I get in trouble if I can't pay?

25: My spouse is a musician, and his income varies significantly from year to year. How can I be definite about financial arrangements?

26: Will my spouse's deferred payment arrangement affect our support and property agreement?





























1. Under what circumstances can I get alimony?

Alimony, also called maintenance in some states, is money paid by one spouse to the other after a divorce for the purpose of support. Husbands as well as wives are sometimes appropriate candidates for alimony.

Mention of the word "alimony" often elicits strong emotional responses. In the past, before so many women worked outside the home, the husband was the one who paid, and he paid more if he was at fault in the divorce. Sometimes, if the wife was at fault, she was not granted alimony.

At the present time, a very small percentage of divorces or separations even involve the payment of alimony; of those that do, an even smaller number receive alimony for more than a brief period of time. Fault is no longer a factor in granting or limiting alimony in more than half of the states. Ask your mediator about the alimony situation in your state- in Texas, for example, you must be married for more than 10 years to receive alimony- as it's important to understand the factors considered in your specific situation.

Permanent alimony is generally reserved for an elderly, unskilled spouse and a marriage of lengthy duration, or the spouse of a wealthy person who would be totally unable to maintain the standard of living the wealthy spouse had been providing. Dolores worked with a couple, for example, where the wife had supported her older artist husband for many years. Although she wasn't wealthy, she earned four times her husband's income. In this case the wife agreed to pay long- term alimony.

If you successfully negotiate for any alimony, it will probably be rehabilitative - to be paid for a specific period of time so that you can develop a way to earn a satisfactory living or qualify for a promotion. The other option is temporary alimony, which is intended to compensate you for time spent in the past helping your spouse with his or her business or career, or in some circumstances, for time you will spend without full- time employment until your child reaches a certain age.

You will need to negotiate about whether you will receive any payments, and if so, how much and for how long. You will want to be sure there is enough money available, in accordance with the child support guidelines, for child support and child-related expenses before alimony is negotiated. Then the income and expenses of both you and your spouse must be considered to determine if alimony is appropriate. Take a realistic look at your personal financial situation, have a complete physical examination, and try to make the best possible assessment of your present and future needs, especially with regard to when and under what circumstances you can become self-sufficient. These considerations will help you negotiate for an appropriate amount of alimony.

You will probably want to include in your agreement some events which would result in the termination of alimony. For example: if circumstances change for the spouse who's paying, or if you remarry or live continuously with a lover who is contributing to the household income. See also question 4:Do alimony payments stop if I live with a new partner (cohabit) or remarry?

If you don't have alimony in your agreement, generally you can't add it once you're divorced, even if circumstances change. If, however, you are negotiating for alimony and you think circumstances may change, you can spell out terms for adjusting the payments in the future.

SIDEBAR A: Question 1
Wherever you live, you are unlikely to get permanent alimony unless:

• You have been married for many years, you are a senior citizen, and you are unable to work or gain the skills necessary to obtain a job which will support you.
• You have been married to a wealthy person and cannot keep up the standard of living to which you've become accustomed.
• You live in certain states, such as New Hampshire, New Jersey, Michigan, Virginia, Oregon, and Washington State, where permanent alimony is granted more liberally.

SIDEBAR B: Question 1
Sometimes when one spouse has been the main provider, he begins negotiations with an expressed or unexpressed desire to continue providing everything. Dolores worked with a couple where the husband was a teacher. In the first session, he offered generous alimony and child support payments. Although there would soon be two households, he wanted to support both households to the extent that he had supported the family prior to the divorce.

Dolores encouraged the couple to draw up a realistic budget for each home, including rent, utilities, transportation, cleaning, food, and all the other necessary day-to-day expenditures. Once they realized what living separately would actually cost, the husband was able to focus more realistically on what he could provide.

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2. What role does fault play in negotiating for alimony?

You can always try to negotiate for alimony if you feel alimony is necessary for your future survival- whether or not you're at fault in the divorce. Don't hesitate to bring it up in mediation so that the mediator can help you explore the possibility of including alimony in your settlement. Even if your spouse is angry, he or she may be willing to focus on the future and make tradeoffs for something else he or she wants. You will need to consider your spouse's ability to pay, the length of the marriage, your earning potential, age, and general health along with any other pertinent factors.

Historically, fault might have resulted in the loss of alimony, but today although most states have fault grounds, few states require fault grounds for divorce. However, if you litigate in some states, fault may play a part in determining alimony, as well as custody and property rights. SIDEBAR : Question 2
In Georgia, a person who has committed adultery and might otherwise be entitled to alimony may lose out if the facts show that the adultery was the cause of the separation.

In North Carolina, abandonment or marital misconduct, such as "illicit sexual behavior" may be factors in granting alimony. There are very specific rules:

• If the dependent spouse has committed acts of illicit sexual behavior, the supporting spouse is not required to pay alimony.
• If the supporting spouse has also committed acts of illicit sexual behavior, then the court may award alimony.
• If only the supporting spouse has committed such acts, the court must award alimony.

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3. How do we determine how much alimony is fair?

A key factor for the two of you to consider is the ability of the moneyed spouse to pay. If one of you is considerably more prosperous than the other, it is more likely that alimony will be a possibility. The actual amount must be negotiated.

Some of the factors you will want to think about in the course of agreeing on alimony include:

• The assets, debts, and income of each of you
  • Does the person seeking alimony have other assets which can provide significant income, such as investments, trusts, pensions?
  • Are there marital debts that either of you will be paying after the divorce?
• The future earning capacity of each of you
  • Did one of you put the other through school? As a result, does one of you have a greater future earning capacity?
• The length of the marriage
  • Have you established a standard of living during a long marriage that the less moneyed spouse will be unable to maintain?
• A prenuptial agreement, if any
  • Is there a valid prenuptial agreement, and does it prohibit or limit the amount of alimony? Have circumstances changed? Would it be fair to mediate a change in the arrangement?
• Age of children
  • Are there very young children at home? Will one of you need to stay home to care for them? Can you afford child care, or do you need to pick up your children after school? How will that affect your future career? Your retirement savings?
• Special circumstances such as advanced age, disability
  • Are there reasons one of you cannot be self-supporting?
• The tax advantages and disadvantages to each of you
  • Alimony is tax-deductible to the payer and taxable to the recipient. There are various ways to pay alimony which have different tax consequences.

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4: Do alimony payments stop if I live with a new partner (cohabit) or remarry?

You and your spouse must discuss when and under what circumstances you will be able to support yourself. In your mediated agreement, you can agree to include specific circumstances under which alimony will stop or be reduced. For example, couples often agree that continuously living with someone who can share expenses, whether you remarry or cohabit, is a circumstance under which alimony will terminate.

If you litigate, and there is no provision in a signed separation agreement which states the terms for ending alimony, some states will terminate alimony if you are cohabiting or remarried. Other states may assume that you need less alimony if you cohabit, and if you don't feel your alimony should be reduced under these circumstances, the burden of proof will be on you to show that your economic situation has not changed.

SIDEBAR A: Question 4
These are some limits you may negotiate for ending alimony:

• remarriage
• graduation from college
• earning more than a certain amount
• moving in with someone else
• a specific date
• when children reach a certain age
• the paying spouse's retirement

SIDEBAR B: Question 4
In some states, such as Virginia, even if you agree with your spouse to separate, cohabiting while waiting for your divorce will give your spouse grounds to end alimony. Before cohabiting, always discuss with your mediator or attorney what you need to put in writing in your temporary agreement or separation agreement so that you can protect yourself.

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5. Will my alimony payments be affected if my spouse's income changes drastically? Under any circumstances?

When you mediate your agreement, you can agree in writing as to the specific circumstances for changes in alimony payments.

Since couples can't know in advance what might occur, they often agree to a cost of living adjustment (COLA) or agree that, if a certain event occurs, such as a significant change in income which will be described in the agreement, alimony may be revised upward or downward.

Many couples build in events which will provide a reason for the termination of alimony, for instance cohabitation or remarriage.

If you have an agreement and one of you seeks a modification of alimony through the court, for the most part the court will not intervene or change the alimony described in your agreement. There are exceptions

• Courts do recognize agreements in which couples modify the terms of alimony on their own. If the two of you agree, you can always return to mediation to work out a new alimony arrangement- and put it in writing.
• Some courts will change the alimony arrangement if you go on welfare or are in dire financial need.

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6. How can I be certain that alimony payments will continue if my ex-spouse dies or becomes disabled?

You can't. Unless there is a specific arrangement in your signed agreement, alimony payments terminate with your death or the death of your ex-spouse. Usually, an annuity or life insurance policy is an alternative way to provide some future income for you if your spouse dies. Your mediator will know what is permitted in your state.

If it seems likely that your ex-spouse may not be able to continue to pay support, may become disabled, may retire or die, you may prefer to negotiate for more marital property and little or no alimony.

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7. Who decides how much child support is necessary and what does it include?

Your negotiations will begin with a consideration of the child support guidelines in your state- these are the minimum standards for child support based on specific factors such as income (including overtime, contracts, investments, pensions, annuities, trust and estates, capital gains, social security), number of minor children, and which expenses are included under your state's guidelines. Your mediator will go over your state's guidelines with you, and will help you tailor them to meet the needs of your family.

The guidelines and your individual child support agreement are intended to cover your child's ongoing daily expenses including food and shelter. In addition to that amount, other costs which may be included in the guidelines, and, in any event, must be considered by you, are health insurance, unreimbursed medical expenses, child care, education, summer camp, and travel expenses. You will negotiate a way to pay for them which may be the same or different from the basic child support expenses: one of you may pay all additional expenses; you may share equally or in proportion to your income, or you may agree to pay for certain expenses and your spouse for others.

Although your mediated agreement will be subject to review by the court to determine if it is in the best interests of your children, the court is unlikely to invalidate your customized child support plan as long as it is fair, the reasons for departing from the guidelines are clear, and your children's interests are protected.

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8. What are some of the reasons the courts will accept if we negotiate an agreement where I pay less than the child support guidelines?

Often courts accept an agreement where parents pay less than required by the child support guidelines because they share almost equal time with their child and there's not much difference in their earnings. They may also pay a significant amount for other child-related expenses such as special tutors, medical expenses, private school, or travel expenses to visit their children at distant locations.

If you are paying less than the guidelines, you will want to establish in your agreement that your children's best interests are being served, that the support is sufficient, and that your children's standard of living remains as close as possible to the standard they had prior to divorce.

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9. Can child support be increased or decreased after the agreement is signed?

In mediation, we try to be realistic about how far into the future we can plan. As children get older, they tend to require more financial support - - their clothes cost more, and they engage in a variety of new activities, most of which entail some expense. Other questions in this section discuss how specific child-related expenses can be handled.

A child support agreement is established for a few years, and we build into the agreement that it will be reviewed at specific times and adjusted according to an agreed-upon formula. This formula may be spelled out in the child support guidelines, it may be a cost of living adjustment based on the Consumer Price Index, or it may be based on some other factor.

Of course, you can also provide in the agreement that you will mediate new child support arrangements in the event of specified events, such as significantly lower or higher income or significantly higher expenses for the child. If mediation fails, you may either opt to strictly follow the child support guidelines or to seek a modification in court.

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10. Until what age do we have to support our children?

The age until which you are obligated to support your children (emancipation) varies from state to state. For example:

• In Colorado, emancipation occurs at age 19.
• In Pennsylvania, it's 18 or graduation from high school, whichever comes later.
• In Georgia, it's 18 or graduation from high school, whichever comes earlier, or age 20 if the child is still in high school at that age.
• In New York, it's 21.

You may choose to support your children for a longer period, or you may link your extended support to a specific purpose, such as completing college or graduate school.

Other events which lead to ending child support and which you may want in your agreement include:

• Active military service
• Marriage
• Independent employment coupled with living away from home ( if this occurs before your state's age of emancipation, you may need a court order declaring your child emancipated.)

Many couples include in their agreements that their child will be emancipated upon graduation from college or at age 22, whichever occurs first.

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11. Does child support have to be spent directly on my children?

Child support is intended to help pay for any expenses involved in taking proper care of your children. This would include household expenses such as food, rent, electricity, and other general expenses such as transportation, laundry, and repairs. You don't have to account for how the money has been spent. However, it is a good idea to keep records, since that will help you keep track of whether the amount you are receiving is enough to cover the necessary expenses.

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12. Must I pay child support to my ex-spouse when our child leaves home for lengthy periods for summer camp or school?

Unless you make other arrangements in mediation, you are required to pay child support until your child is emancipated, even if your child is away from home at summer camp or school. Generally the costs of housing continue, be it for rent and utilities or mortgage payments, since your child will return from camp or school, and continue to reside with your ex-spouse.

Sometimes couples mediate alternative ways of paying support once the child leaves home for college. For example, you could negotiate to pay a greater portion of the tuition and boarding expenses and less to your ex-spouse for cost of living once your child is in college.

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13. Who pays the children's medical bills? Health insurance?

Unreimbursed medical expenses (not covered by health insurance) may not be included in the child support guidelines in your state. Who pays for these expenses will need to be negotiated.

Who pays for health insurance also may need to be negotiated if it isn't in your guidelines. If your children were covered under your or your spouse's health insurance policy, this coverage would usually be continued.

You and your spouse will have to agree as to what will constitute medical expenses. Are psychiatrists, psychotherapists, orthodontists included? Dolores mediated an agreement in which the parents decided that costs for orthodontia and psychotherapy would not be shared unless both parents agreed. Otherwise, the parent arranging the treatment would be solely responsible.

You could provide in your agreement that if your child has medical expenses above a specific amount, a different formula for payment would be used, or you would return to mediation to negotiate new terms.

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14. Who pays for child care?

You negotiate this obligation in mediation. Child care expenses may or may not be an add-on to your state's child support guidelines. If child care is an add-on, it would cover the time the custodial parent is working and cannot care for the child, or if, for instance, the custodial parent is in school preparing for future employment.

If the state guidelines do not cover the expense of child care, but the non custodial parent can afford it, that parent may agree to pay for all or part of the costs so that there will be less responsibility for child or spousal support in the future when the former spouse's income increases or when the former spouse becomes self-supporting.

Child care for purposes other than employment, such as evenings out, is the individual parent's expense.

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15. Must we pay for college?

The answer to this question depends on several factors:

• Do the child support guidelines in your state terminate at age 18 or 21?
• Do those guidelines include a requirement that you pay for college?
• Do you have the ability to pay?

If your obligation to support your child ends when your child reaches the age of 18, you are not be obligated to pay for anything beyond that point whether you are married or divorced, so even if some college expenses are included in your state guidelines, your obligation would be minimal.

Regardless of the guidelines, parents often want to provide some money for college if they have the ability to pay. There are several ways this can be written into the agreement:

• You may have already saved some money for college, and you can specify in the agreement how it is to be used.
• You can create a college fund to which each of you contributes on a regular basis.
• You can agree to share the costs for state college, or to pay proportionately according to your income for private college.
• If your child is young and you are uncertain whether you will be able to afford college, you could agree to return to mediation closer to college enrollment to plan for college costs.
• The custodial parent may be willing to agree that child support will be spent on room and board. Also see question 12: Must I pay child support to my ex-spouse when our child leaves home for lengthy periods for summer camp or school?
• If one parent has limited funds, the other parent may simply agree to pay for college.

This is an area where you can work out a creative solution, because college expenses can vary greatly depending on the type of college, your willingness and ability to pay. For example, Carol worked with a couple who agreed that each would pay 1/3 of the college costs, and that the child would have to pay the other 1/3.

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16. I will be the custodial parent, but my spouse tells me that I'm responsible for child support too. Is that possible?

While you may mediate any arrangement you want as long as you include sufficient child support as defined by your state guidelines, your mediator will tell you whether the child support guidelines in your state require both parents to be responsible for the obligation.

In one way or another, each parent contributes to child support. Sometimes both parents are required by the guidelines to contribute money; in other states, one parent contributes money and the other provides child support by maintaining the child's home.

Some guidelines require that the income of both parents must be added together and the proportionate share each parent must contribute is then calculated. Then the non custodial parent's share is paid monthly to the parent with custody. This is true even if the parent with whom the child lives earns considerably more income.

In addition, in some states, expenses such as child care, school activities, education, and medical expenses are not included and need to be calculated in addition to the basic amount.

Confused? Your mediator will provide you with information about your state so that you can create a tailor-made agreement which suits you. See also question 17: If our child spends more or less equal time with me, why should I pay child support?

SIDEBAR: QUESTION 16
Illinois is one of the few states where the custodial parent may have to pay child support to the non-custodial parent. If you live in Illinois and have a significantly larger income than your former spouse, even though you are the custodial parent you may have to pay support to your ex-spouse for childcare during visitation.

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17. If our child spends more or less equal time with me, why should I pay child support?

Even if the amount of time you both spend with your child is almost equal, in the majority of states your children are considered to have a primary residence with one of you, and you are required to pay child support to the parent maintaining that primary residence. That parent requires the support to maintain the child's residence and to take the responsibility of buying clothes and other necessities for the child. Most states emphasize that your child's standard of living should be altered as little as possible, so the primary residence must, where feasible, resemble the residence your child had prior to the divorce. This costs more than if the custodial parent lived alone.

In some states, the guidelines base child support on a percentage of gross income and adjust that amount according to the time your child spends with each of you. It is important to be aware that if you make significantly more money than your spouse and use these guidelines, even if you both spend equal time with your child, you would still owe child support based on your higher income.

Of course, if you agree to do so in mediation, you can opt out of the guidelines, and explain in your separation agreement that, since you are spending equal time with the children, you will share expenses equally.

Sidebar: QUESTION 17
In some states, significant visitation time with the non custodial parent results in a reduction of that parent's child support obligation, and you may want to take this into consideration when you mediate your agreement.

For example, a 1997 New Jersey law provides that if the non custodial parent provides two or more overnights per week, the child support obligation will be reduced.

In California, the child support guidelines take into account which parent has the higher earnings as well as the amount of time each parent has physical responsibility for their child.

In Michigan and Maryland, if the child spends more than approximately 35% of overnights with the non custodial parent, the amount of child support will be reduced.

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18. How can I be sure that child support will continue if something happens to my ex-spouse?

In mediation you will both be encouraged to include in the agreement an obligation to purchase life insurance and disability insurance to provide for child support payments, and for future educational expenses in the event something happens to you or your former spouse. The life insurance policies can either be for a level amount for the full term, or can be a declining-value term policy which parallels the decreasing obligation as the children grow older and become emancipated.

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19. I have child support obligations to children by a prior marriage. How will that affect the child support payments I will be negotiating in this divorce?

In mediation, we take into consideration the child support agreement you made when your prior marriage ended, in addition to your local child support guidelines, when we negotiate support obligations for children from your current marriage. In most states, child support for children from a prior marriage or where there's an existing court order for support must be deducted from gross income before calculating child support for subsequent children.

However, if one of your children from either marriage needs additional support because of some special situation, you will have to review your financial plans carefully so that the additional costs can be paid. Although we could make special arrangements in mediation to make some future adjustments to your planned child support payments, keep in mind that the court will review the arrangements with the best interests of all your children in mind.

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20. If one of us remarries, how does that affect child support?

Remarriage is frequently a concern during mediation negotiations, and your mediator will help you plan for changed circumstances. You can negotiate a parenting arrangement with an alternative plan in the event of remarriage, or you may agree to return to mediation if one of you decides to remarry. So long as your children's standard of living can be protected, the courts are likely to go along with your agreement.

If your child support agreement is based on your state's child support guidelines, child support may be subject to modification. If your agreement requires modification on a periodic basis based on the guidelines, in some states this is what might occur:

• If you are receiving child support and your ex-spouse has a child in the new marriage, that event could reduce the child support payments because the court takes into account the best interests of all children.
• If your ex-spouse pays you child support, and his new spouse's income is available to help pay his living expenses, you may be able to get an increase in child support on the principle that he now has a greater share of personal income available for his own use.
• If you are receiving child support and you remarry, in some states your ex-spouse may be able to get a reduction in child support on the same basis- you and the children have the benefit of your new spouse's income for your personal living expenses.

Some couples write into their agreement what the financial arrangements will be if they remarry. These arrangements are permissible so long as the post-remarriage support meets the guideline's minimums.

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21. My spouse intends to change careers, and the new career will pay much less. Is that allowed, and how will it affect child support?

If your spouse has lost his or her job and must change careers to remain employed, your child support may be lowered, just as your standard of living would be lowered if you were still married. We would suggest a mediation session where you try to plan together so that the impact of the career change would be minimized.

If your spouse is choosing to change careers or take a lower paying job, perhaps you could persuade him or her to wait a few years to make the change, for example, until your child graduates from high school. You should think about whether you are willing to trade something to make that prospect attractive- perhaps in exchange for your spouse postponing the career change, you would be willing to pay a larger share of your child's future college expenses.

If you feel your spouse is making this change irresponsibly or punitively, you may be able to argue against it effectively. Courts vary significantly, but most courts would not limit your spouse's choice to change careers. However, if the reason for the change appeared to be punitive, some judges would order that support payments must continue at the same level.

Sometimes a job change can be beneficial, even if the parent earns less money. Carol worked with a couple who had joint custody and equal time with the children. The father had never had full responsibility for the children, and although he was anxious about it, he wanted to give it a try. He liked the parenting role so much that, since things were slow at his job, he agreed with his wife that he would work part time so he could spend more time with the children. He assumed a larger share of the child care responsibilities which actually decreased the mother's child support obligation.

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22. My spouse gets paid in cash. How can child support be calculated fairly?

In this type of situation, mediation can be a big advantage. Discussions about finances in mediation are private, and as such, do not require documentation of income if both you and your spouse agree on what is fair. You probably have an idea of what your spouse's earnings are, and you can agree on an amount of child support which will meet your child's needs and which will provide the standard of living to which your child is accustomed.

If your spouse refuses to agree on an amount of child support which you feel is in line with his or her income, you may be forced to litigate. If you litigate, you both will be required to produce all financial records. Then, you can have a forensic accountant reconstruct more realistic income figures from additional information based on a detailed analysis of checking accounts and charge accounts (to look for items which may have been partially or fully paid for in cash), and a similar evaluation of other personal expenditures, assets, and standard of living.

Mediation allows you to agree on a legally enforceable amount, without having to divulge finances in public court, and without the hassle of complex calculations based on your spending patterns.

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23. My spouse takes so many business deductions that very little income shows up on our personal tax return. How can we figure out the right amount for child support?

Many state child support guidelines provide ways to add back in tax deductions that may be acceptable for income tax purposes, but not for computing child support. If the guidelines don't do so, you can agree to additional guidelines in your mediated agreement.

For example, often the guidelines require that deductions for depreciation of such items as computers and cars, which may have been deducted as depreciation over several years or all in one year, should be added back into the income figure. Similarly, those entertainment and parking expenses which may have been deducted for business, but were also personal expenses, can be added in as income. There are many such examples.

Your accountant, mediator or valuation expert can assist the two of you in determining the appropriate income figure to be used in computing child support.

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24. How will the child support part of our agreement be enforced? I want to be generous when I negotiate my child support payments, but will I get in trouble if I can't pay?

If your child support payments are not made, you could get into trouble. For that reason, prior to agreeing to an amount, it is important that you review your budget, income and liabilities with the mediator so that any child support payments you agree to make, in addition to the amount required by the child support guidelines, are payments you will be able to make.

As of October 1, 1997, the Federal Government established a computerized directory (The National Directory of New Hires) which traces parents who owe child support- even if they have moved to another state. This program is expected to substantially increase the collection of past due child support. Depending on state enforcement laws, the child support obligation may be enforced, for example, through income execution (deduction from your paycheck, unemployment check, or other benefits), or attachment of a tax refund. In New Jersey, for example, a 1998 law allows the state to track child support evaders through cable television bills and bank accounts. Penalties for non-payment may include revocation of your driver's license, denial of Federal loans for your business or property, fines, or possible time in jail.

In the event your circumstances change, rather than failing to pay, you should return to mediation and try to renegotiate the payments. If your ex-spouse is unwilling to renegotiate, you can seek court approval to lower the payments.

In mediation, you may prefer to agree to be responsible for a larger proportion of college expenses or for some of your child's activities not directly considered child support by your state's guidelines. That way, while these obligations would be enforceable as part of a contractual agreement if you couldn't pay them, they wouldn't carry the same penalties as failure to pay child support. See also Chapter three, question 22: What if my former spouse never keeps promises about visiting the children or paying child support?

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25. My spouse is a musician, and his income varies significantly from year to year. How can I be definite about financial arrangements?

You can only be definite about two things: what you actually own jointly (your current marital assets), and the specific method you agree to use for determining future payments. You may be negotiating alimony so that you can become financially independent, but you can't be sure that your former spouse will earn enough in the future to regularly pay a set amount. In this situation, your alternative may be to give up part or all claim to alimony in exchange for a larger share of current assets, such as a house or savings. Remember, alimony depends on the ability to pay, and if earnings are marginal and there are no assets, alimony is not a realistic expectation.

On the other hand, child support is a requirement, sometimes for both of you. Mediators suggest several ways to determine what will be paid for child support, with the goal of establishing a realistic amount so that appropriate plans can be made to meet the child's needs with as much stability as possible.

With an unpredictable future income, you need to agree on an amount to use as a basis for calculations using the child support guidelines. You could agree to either average the last two or three years of net income, or you might use only the net income for the prior or current year. Your former spouse would agree to pay a fixed amount based on those earnings, either for one year or for a specified number of years. If it becomes impossible for him to meet these obligations, you could agree to return to mediation to review the situation.

When future income is unpredictable, creativity is necessary to provide appropriate flexibility. In one of Carol's mediations, the couple agreed to exchange tax returns each year to calculate future child support payments. In one of Dolores' mediations, the couple agreed that if the former spouse earned more than a set amount annually, instead of using the guidelines, child support would be increased for that year according to a specific alternate formula.

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26. Will my spouse's deferred payment arrangement affect our support and property agreement?

You should discuss deferred salary or other kinds of deferred payment arrangements as part of your negotiations in mediation.

Sometimes for tax or other purposes, an employee arranges to defer part of their salary until the following year. You can agree that this deferred sum will be treated as part of the current year's income, or that the calculation of the following year's support obligation include the deferred salary. Deferred income of any kind is always considered for purposes of child support and is subject to the child support guidelines or to whatever child support formula you agree on. In mediation you can negotiate whatever terms you choose regarding this money.

Similarly, when, prior to divorce, some authors, movie stars, and sports figures sign contracts for significant sums in which payment is made over a lengthy period of time, in many instances the money will be treated as marital property to be divided or future income to be shared.

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Reprinted from the Divorce Mediation Answer Book with permission from Kodansha America Ltd.

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ABOUT THE AUTHORS

Dolores D. Walker, M.S.W., J.D. is an attorney and psychotherapist specializing in mediation.

Carol A. Butler, PhD is a mediator and psychotherapist.

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