IMPUTATION OF INCOME IN SPOUSAL SUPPORT OR CHILD CUPPORT CALCUALTIONS

HOW ARE INCOME IMPUTATION DECISIONS MADE BY THE COURT

Presented here by Terry Bankert a Genesee Flint Family Law Attorney 810-235-1970

1. REAL INCOME

A. What is the real income  of the self employed engaged in an underground economy with unreported income?

HEYYUZA VS  HEYZA no 282790 unpublished The court opinionated that even if a party has unreported income, form purpose of calculating support, taxes that would be owed on that income should be taken into account. MCSF 2.02 3

EXAMPLES.

Landscapers

Beauticians

Personal Trainers

Dance Instructor

-BERGER VS BERGER ABility to earn $50,000 per  year as a nurse dance instructor see MSSF 2.01 G 2, a, b, d, h

Manicurists, nail techs

Restaurant business

Bar Business

Party Stores

Construction

Home Improvement

Maintenance

Contractor Generally

Mason

NOVAK VS NOVAK  no. 275267 July 22 208 . no imputed income because of mortgage  application stated income but masonry skills and past employment  imputed at $65,000.

Electricians

Plumbers

anyone doing side jobs

House Cleaners

Commercial Cleaners

Exotic dancers

Escorts

Companions for elderly

Professionals generally

Lawyer

Doctors

Dentist

chiropractors

holistic health people

Truck Driver

MCDOWELL VS MCDOWELL No 273807 May 22 2008 unpublished it Truck driver imputed income when working after  leaving his own company business. okay to subtract operating expenses and taxes. MCSF 2.021 2 G a d e h

b. unexercised ability to earn

STALLWORTH VS STALWORTH 275 Mich App 282 (2007) Criminal sentence is not a voluntary reduction.

b.WIERINGA VS WIERINGA no 288475 June 16 2009 Unpublished. It was not an abuse of discretion to not impute income to a spouse who was a homemaker and home-schooled children, two with special needs MCSF 2.01 G 2 a i ii.

b.MORK VS MORK no 283270 june 23 2009. appropriate to not impute income wife limited work experience, tried to find work, . include husbands employer provided room food, work experience did not warrants an unexercised ability to earn.

b.MYLAND VS MYLAN Court cannot guess but must use imputation factors  MCSF 2.01 G 2 a b.

b.TOAL VS TOAL The Court of Appeals found that it was appropriate to impute income to plaintiff husband in the amount of  $350,000 where he was previously employed as an investment banker and had retained investments. It was appropriate to consider plaintiffs unexercised ability to earn more than he was earning as a teaching coach. The court pointed out  this was not a deviation but  an appropriate imputation of income as permitted  by the Michigan CHild SUpport formula MCSF 2.01 G 2 a b h

b. VANGESTR V VANGEST No. 294427 March 1,2011 [unpublished]

The Court of Appeals upheld  a trial court's decision to award a substantial spousal support to balance the parties income taking into consideration the fact that the defendants income had been reduced by $10,000 per year because of a drunk driving conviction.

b. CARLSON V CARLSON No. 292536 June 26 2011 The COurt of Appeals found  that the trial court abused its discretion in failing to consider the factors enumerated in 2004 MCSF 2.10 (E) or finding that the defendant had the actual ability and likelyhood of earning the imputed income.  MSCF 2.01 (2)(G)(h)

c.The use of forensic accountants for business practices

MORRIS V MORRIS No 301555 January 31 2002 unpublished. The Court of Appeals found no error in imputing income $35,000 per year to plaintiff /payer who flipped houses and an expert was used to present an analysis of plaintiff business income.

d.Lifestyle analysis including support from friends and relatives

BYERS VS BYERS No. 300027 May 5 2011 unpublished

The Court of Appeals  upheld a trial court's child support and spousal support award essentially relying on evidence of defendants “ lifestyle” and ability to pay his bills arriving at imputing income  of $52,000 to him. Specifically refers to Michigan Child SUpport Formula factors MCSF 2.01 (G)(2)(h)

HOSTED V HOSTED  No 299116 December 20, 2011 The COurt of Appeals  remanded the issues of spousal support back to trial court for specific finding as to the alimony factors., but did not reverse the trial court's finding that the defendants business records could not support his lifestyle and imputed income of $61,280 pr year to him. Comparable factors MCSF 2.01 (G)(2)(h)

e. Cash Flow analysis see Cunningham

f. Earning capacity

RIEBSCHLEGER VS RIEBSCHLEGER No 270226 February 21 2008. The court of Appeals differentiates between imputed income and earning capacity. Court can impute additional money to arrive at spousal support award.

GEORGE VS GEORGE  no 277186 August 2008 unpublished . The court held the use of  the Department of labor statistics in determining income attributable to child support payer MSCF 2.01 G 2 a b c

MORRIS V MORRIS No 301555 January 31 2002 unpublished. The COurt of Appeals found no error in imputing income $35,000 per year to plaintiff /payer who flipped hjouses and an expert was used to present an analysis of plaintiff business income.

RUGIERO VS RIEGRO No 301829 June 19 2012 unpublished. The trial Court did not err in treating bank deposits as income. Plaintiff/payer was employed in a family restaurant business. The trial court added bank withdrawals to determine the amount plaintiff needed to cover his expenses and multiplied by 12 to determine plaintiffs yearly income deducted payments related to car expenses and added 25 percent(for taxes) to determine plaintiff had a gross income of $88,000 per year.

2. Voluntary termination versus loss of job

CHIPPS VS CHIPPS No. 291755 February 23, 2012 (unpublished)

The Court of Appeals upheld the trial court’s decision to impute income to defendant of $113,000 per year consistent with his prior employment where defendant voluntarily left his job to work at  his church for $36,000. This was despite the fact that defendant testified he could no longer get his job back. The Court of appeals noted the defendant was free to file a petition to modify  the child support in the future if defendant finds that “due to the economy or some other factor” he was unable to find employment at the imputed level by the trial court. MCSF 2.01 G 2 a b h

WILSON V WILSON No 31719 June 21 , 2011 [unpublished] Imputation to woman payee was found to be appropriate where parties had owned a business neither wanted to continue to operate. The imputed income amount was between what she would earn working full time at minimum wage  and what she would earn as a dental hygienist which she was trained to do. MCSF 2.01 (G)(2)(a)

a. The impact of divorce on someone's income, how skeptical should it be when someone's income goes down.

a. ANDREWS VS ANDREWS No 274338 March 11 2008 unpublished, Signing over interest in income producing partnership voluntary and bad faith reduction in income.

a .ASHBAKER VS ASHBAKER no 296947 October 18 2011 unpublished

The Court affirmed the trial courts decision not to impute income to a 62 year old spousal support payer who elected to retire and receive social security after he sold his business and experienced health problems MCSF 2.01 (G)(2)(a)(c)

b. What income averaging will you use--three years.

b.SPAGNUOLO VS SPAGNUOLO no 275439 May 21 2009 unpublished. The Court of Appeals found no error in income averaging over a three years to determine defendant/payers income when there was a significant variation in defendants yearly income.

c.What about a spouse who has been a stay at home mother or dad and out of the market for more than ten years. Do you impute income?

3. What about the economy since 2008.

A. Look to the Michigan Child Support Formula

B. Applicable Case law and Equivalent Factors under 2008 MCSF 2.01 (G)(2)

C.MICHIGAN OCCUPATIONAL WAGE GUIDELINES

c. LANDON VS SHELTON No. 297064 December 21, 2010 Unpublished.

The Court of Appeals reversed the trial court adoption of the referee's recommendation that the defendant / payers income be imputed at $51,800 based on the Michigan Occupational Wage guidelines for a property and real estate manager because there was no additional findings to support imputation to defendant in this amount.

D.BALANCING OF INCOMES

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Imputation of income by Henry Gornbein, & Betty Lowenthal Presented at  American Academy of Matrimonial Lawyers Michigan CHapter, Advanced - Level Family Law Seminar Thursday May 02 2013 Birmingham Michigan

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(PPO) Personal Protection Orders

When you are in a domestic relationship  a  PPO is appropriate if  you can demonstrate that  you have  been assaulted or threatened with harm by the  your partner  MCL 600.2950.

Presented here by Genesee Flint Divorce Attorney, Lawyer Terry Bankert 810-235-1970

Specifically, the Judge must issue a PPO if it is  found that there is  reasonable cause to believe that  your partner  might commit one of the prohibited acts. MCL 600.2950(4).

When you file a PPO you must include specific incidents of assaults or threats and describe the injuries resulting from the specific incidents of abuse.

We know that Emotional abuse can be as devastating as physical battering; therefore, such incidents should be included in your petition.

In ruling on the motion, your judge  must consider testimony, documents, and other evidence and whether  your partner previously committed or threatened to commit acts of violence. Id.

You should ask for entry of the order ex parte if notice to  your partner  might precipitate additional harm.

To justify a request for an ex parte PPO, the you must clearly allege facts that support the conclusion that “immediate and irreparable injury, loss, or damage will result from the delay required to effectuate notice or that the notice will itself precipitate adverse action before the PPO can be issued.” MCL 600.2950(12).

Most domestic violence survivors can easily meet this standard with specific reference to their partners  past violence and allegations that prior notice will result in the partners further violence or coercion of  you to dismiss the petition.

The ex parte provisions of the PPO statute were declared constitutional in Kampf v Kampf, 237 Mich App 377, 603 NW2d 295 (1999).

The PPO petition should focus on the imminence of the actual or threatened harm and the irreparable injury  you will suffer if the PPO is not granted.

The attorney representing  you must allege facts, not merely generalizations. The petition must give persuasive reasons why  you need the protection of a PPO.

For example, a threatened harm could be a promise to kill  you, to beat  you senseless, or to never allow  you to sleep. A completed harm might be sexual assault, punching, kicking, slapping, choking, or stabbing  you. Especially chilling are the acts designed to defeat criminal detention by inflicting maximum pain with minimal evidence of physical injury, such as pulling hair and squeezing or bending limbs and fingers. Completed harm could also include frequent or late-night telephone calls at home or at work, following the victim, slashing car tires, banging on or breaking into doors and windows at the victim’s home, burning the victim’s house, or torturing or killing pets.

A pattern of past and an expectation of future harm and the degree of seriousness of the harm are essential concepts. To establish such a pattern, the complaint should recite the specific dates that incidents occurred, along with the extent of bodily harm, the extent of property damage, the explicit content of threats, whether medical treatment was necessary, whether any of the couple’s children were present during the assault or were in danger, and whether the police were involved.

Repeated minor offenses or at least one serious incident coupled with indications of continuing trouble may justify issuance of a PPO. By the same token, one isolated incident or a pattern that ended some time ago (without an explanation of why a PPO is needed now) may not be sufficient.

There are few reported appellate decisions that address domestic relationship PPOs and the facts that are sufficient to justify their issuance. In Kampf, allegations of verbal abuse, spousal rape, bruising, pushing, and shoving were sufficient. In Pickering v Pickering, 253 Mich App 694, 702, 659 NW2d 649 (2002), partner’s threats to break down a door that you had braced shut, “rage” in partner’s voice, and partner’s use of a yardstick to probe underneath the braced door were sufficient to authorize a PPO. However, the judge of appeals noted that the facts in Pickering made the issuance and continuation of the PPO a “close call.” 253 Mich App at n3. In Jannaro v Schamp, No 210740, 1999 Mich App LEXIS 2235 (Dec 21, 1999) (unpublished), partner’s use of abusive language, violent behavior, and threats to kill you and her family were sufficient to justify a PPO.

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WHAT DO DO WITH CLOSED SCHOOLS.DIVORCE PROPERTY AND RESTORING CREDIT AFTER BANKUPTCY

GENESEE FLINT .COM

04/23/13

WHAT SHOULD BE DONE WITH CLOSED SCHOOLS

No critical comment is here made about the hard decision to close which schools. That is clearly for the Flint Board of education. But what can be done with the empty building? Assumption, a vacant building with no utilities will end up with plaster, pipes, windows  and water damage. Roofs will leak, vandals will savage the building and further deteriorate the neighborhood. What can be done?

1. put the building for sale for a dollar to any group that will meet strict criteria.

2.What should the criteria be.

a.electrical

b.heat.

c.windows in repair

d.outside lawn and equipment maintained.

e. district gets the first right to repurchase the building at market rate.

f.appropriate bond

http://www.mlive.com/news/flint/index.ssf/2013/04/flint_school_district_cfo_outl.html#incart_river

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GUN CONTROL

It is inescapably ironic that while Boston was under siege last week, the Senate was busy rejecting a measure that would have mandated near-universal background checks for gun purchases nationwide — legislation prompted by the massacre of 20 first-graders and six adults last December at Sandy Hook Elementary School in Newtown, Conn.

Gun violence costs 30,000 lives in this country each year. Other steps proposed after Newtown — such as reimposition of a ban on military-style assault weapons and large-capacity magazines — were deemed too much to hope for. But expanded background checks once had the support of the powerful National Rifle Association, and experts considered them potentially the most effective way of keeping deadly weapons out of the wrong hands. They might not have prevented the last senseless mass shooting, but might prevent the next.

However, the NRA changed its position on background checks to “never” and dug in its heels, threatening to punish senators who voted in favor. And so, despite polls showing that up to 90 percent of Americans support universal background checks, Senate Majority Leader Harry Reid could not muster the 60 votes needed to move the legislation forward.

Some critics say President Obama didn’t push hard enough for action on gun violence, didn’t twist enough arms or slap enough backs. Some say Reid could have done more to keep red-state Democrats in the fold. Some say the barrier arises from the architecture of the Constitution, which gives Montana’s 1 million residents the same number of senators as California’s 38 million.

http://www.washingtonpost.com/opinions/eugene-robinson-guns-and-terrorism-a-double-barreled-standard/2013/04/22/7247571c-ab84-11e2-b6fd-ba6f5f26d70e_story.html

DIVORCE PROPERTY DIVISION

Mandatory Judgment Provisions

Property division must be discussed in the judgment of divorce in a separate paragraph prefaced by an appropriate heading. MCR 3.211(A). The judgment must address these property interests:

• Property division. A division of the real and personal property brought to and acquired during the marriage as well as the parties’ debts. MCL 552.19, .23, .101, .103, .401; MCR 3.211(B)(3); Yeo v Yeo, 214 Mich App 598, 543 NW2d 62 (1995).
• Insurance. A statement confirming that the divorce judgment terminates each spouse’s interest as a beneficiary in life insurance on the other spouse’s life or providing otherwise. MCL 552.101(2)–(3); MCR 3.211(B)(1).
• Dower. A statement that the divorce judgment satisfies the wife’s dower claims in the husband’s property. MCL 552.101(1); MCR 3.211(B)(1).
• Pension, annuity, and retirement benefits. A determination of the rights of both spouses in pension, annuity, or retirement benefits. MCL 552.101(4); MCR 3.211(B)(2).

A consent judgment of divorce provision releasing each party’s rights to the life insurance proceeds of the other party waives a party’s right to a late former spouse’s life insurance proceeds. Sweebe v Sweebe, 474 Mich 151, 712 NW2d 708 (2006); MacInnes v MacInnes, 260 Mich App 280, 677 NW2d 889 (2004).

A divorce or an annulment revokes a will provision naming the former spouse as a beneficiary unless the will specifically provides otherwise. MCL 700.2806–.2809.

SEE

Michigan Family Law Benchbook ch 8 (ICLE 2d ed 2006), at http://www.icle.org/modules/books/chapter.aspx?lib=family&book=2006553550&chapter=08

(last updated 04/05/2013).

CREDIT AFTER BANKRUPTCY

       Obtaining Credit After Discharge

A. How to Rebuild a Credit Score

§3.127 Rebuilding a credit score is often easier than anticipated. According to the major credit reporting agencies, a consumer must take the following steps:

1. Make sure all listings on the report are accurate.
2. Be sure to review all three major credit reports (Equifax, Experian, and TransUnion).
3. Dispute inaccuracies pursuant to the dispute resolution process afforded the consumer by the credit reporting agencies.
4. Be sure to monitor all three credit reports for inaccurate information annually and continuously dispute inaccuracies.
5. Be sure to make payments on all remaining lines of credit in a timely fashion.
6. Make all rent/mortgage payments on time and pay by check.

If the consumer ever wishes to purchase or refinance via HUD, he or she will need proof of timely rent payments. Receipts will not suffice, only cancelled checks. Be sure to advise your client of this subtlety.

B. Monitoring Credit Reports

§3.128 It is a wise idea for your client to obtain a copy of his or her credit report annually to make sure that proper reporting is reflected on the report so as to avoid having improper negative information cause the credit score to be improperly low.

C. Financing a Motor Vehicle

§3.129 As quickly as the day after your client’s Chapter 7 case is discharged, there are lenders who will be willing to lend the debtor sufficient funds to purchase a car. Most major auto dealerships have relationships with finance companies that will provide financing to parties who have just been discharged in a bankruptcy. In purchasing a vehicle, your client should make sure that both the purchase price and monthly payment are within his or her budget. The closer in time to the issuance of the discharge order, the higher the interest rate that will be charged. Unfortunately, this is a factor of the market conditions and the economic situation the client has previously faced.

The key to success with the first car one finances after the filing of a Chapter 7 bankruptcy case is making sure the payment is low and that the debtor stays within realistic financial boundaries.

D. Financing a Home

§3.130 Historically, buying a house after bankruptcy requires that a debtor improve his or her credit score and have a sufficient down payment. With the collapse of the subprime mortgage industry in 2007 and 2008, it has become much harder for a discharged bankruptcy debtor to obtain financing for a home, but it is not impossible. The best suggestions counsel can make to his or her client to obtain financing include

• not doing anything to harm the client’s credit,
• paying current lines of credit on time,
• saving money for a substantial down payment,
• living within the client’s means, and
• making sure the client’s debt-to-income ratio stays low.

In other words, a debtor who presumably will eventually qualify to borrow money for a home purchase should keep other credit lines and new debt limited so that other debt payments will not interfere with the client’s ability to stay current with mortgage payments.

SEE

Handling Consumer and Small Business Bankruptcies in Michigan ch 3 (Richardo I. Kilpatrick et al eds, ICLE 2009), at http://www.icle.org/modules/books/chapter.aspx?lib=bankruptcy&book=2009550820&chapter=03

(last updated 04/12/2013).

 

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