Cash Flow

When determining an alimony award, New Jersey courts look at a variety of factors that are listed under N.J.S.A. 2A:34-23(b).  At the very top of that list is "The actual need and ability of the parties to pay."  Similarly, when determining child support, one factor that courts in this State consider is "All sources of income and assets of each parent."  When determining a payor spouse’s income, courts will consider both the supporting spouse’s present earnings and potential earning capacity.

The question becomes more complicated when the payor spouse owns his or her own business.  Oftentimes tax returns do not tell the whole story and cannot be relied upon as the sole source for rendering an income determination.  For instance, that spouse may have a bank account under the business name, but uses it nevertheless for personal expenses.  Oftentimes such personal expenses are not accounted for on a tax return as income and it then becomes a matter of determining what the actual income level is.  Another example may involve the spouse being reimbursed through the business for personal travel expenses. Continue Reading Appellate Division Examines a Spouse’s Ability To Pay Support