What Does it Mean to Impute Income During a Divorce?
Florida divorces can carry many financial complications and often, those seeking divorce are entirely unaware of these hugely influential concerns until they experience them personally. Such is the case when income is imputed or even when the imputing of income is mentioned as a possibility. This terminology is unfamiliar to most people even as they embark on the divorce process — but many become all too familiar with this concept before long.
The term “impute” is actually quite simple: this is another word for “assign” and, in the context of a divorce, it essentially means that a particular income level is assigned to one party, regardless of what that person actual earns at that time. This, in turn, may influence how much that person will be expected to pay in child support or alimony — and generally speaking, the person with the imputed income will need to pay more as a result.
This concept is far from straightforward, and during a Florida divorce, the process of imputing income can prove incredibly complicated. Therein lies the need for legal guidance, which can improve divorce-related financial outcomes as they relate not only to the imputing of income, but also to the bigger picture of child support or alimony.
Not sure whether the imputing of income is a realistic risk or how it might play out? A little understanding can spark a more nuanced and strategic approach to all aspects of the divorce process, including imputed income and associated concerns. Keep reading to discover what it means to impute income during a divorce and why the potential for the imputing of income must be carefully considered when navigating the Florida divorce process.
Why Do Florida Courts Impute Income?
There is no one situation in which Florida courts can reliably be expected to impute income. This strategy is highly variable and is often not necessary. Many spouses enter divorce with straightforward information about their income and financial status, along with clear expectations as to how alimony or child support negotiations will play out.
Some cases are more complicated, however, and, sometimes, changes in employment make it more difficult to achieve the overarching goals of alimony or child support: to provide necessary financial assistance and help the recipients maintain their standard of living.
In Florida, the imputing of income may occur if courts suspect that one of the parties seeking the divorce is not being entirely honest about current financial concerns. In this way, imputing income may be regarded as a key solution for restoring fairness or even punishing the person suspected of obfuscating their real income.
Another situation that increases the chances of courts imputing income? Voluntary unemployment or underemployment. In these cases, courts may assume that one party is capable of earning a particular income but has, for some reason, declined to do so.
How Does Imputing of Income Work?
In Florida, the process of imputing income may be initiated by the court if there is suspicion regarding one of the divorcing individuals’ financial background — and especially if there is doubt as to the voluntary nature of unemployment or underemployment.
Once the imputing of income is considered as a possibility, evidence (including sources of potential income) should be gathered. Often, this means delving into employment records or even college transcripts.
Courts may consider a variety of factors while making imputing-related decisions. These could include work history, health concerns, local conditions in the job market, or general earning capacity.
The person who hopes that the other party’s income will be imputed maintains the burden of proof for demonstrating that income is available to be imputed in the first place. Both sides may provide evidence supporting their arguments, however. This is carefully analyzed by the court before a final decision is made.
Should the court determine that imputing income is justified and necessary, the next step involves determining the extent to which income should be imputed. The factors identified above may play not only into the decision of whether to impute income, but also how much.
How Much Are Courts Authorized to Impute?
Florida courts hold a great deal of discretion over how — and to what extent — they impute income during divorce. This can bring a lot of confusion to cases involving the imputing of income, as no two situations that call for imputing will look exactly alike. Typically, however, courts avoid imputing more than the person in question has earned in the past.
When determining the extent to which income should be imputed, courts examine pay stubs, tax returns, and other forms of income documentation to demonstrate how much the person in question is currently earning — and how much is assumed that person could earn by working on a full-time basis.
Perceptions regarding the reason for the person’s unemployment or underemployment may also be considered, particularly if that person seems to be making a good-faith effort to seek better work opportunities. There is no one-size-fits-all approach, however.
How Can Imputed Income Be Avoided?
While imputing of income generally comes down to the court’s discretion, there are a few steps that can be taken to limit the likelihood of this occurring. A proactive approach is always preferable, as the imputing of income can have a significant impact on the divorce process — and may make already difficult alimony or child support negotiations that much more stressful.
In many cases, the effort to impute income begins with demonstrating that current unemployment or underemployment issues have been entirely non-voluntary. Similarly, those thinking of scaling back on work obligations during the divorce process may want to reconsider in light of the risks of imputing.
Finally, it is important to get equipped with evidence regardless of whether this process proves necessary. After all, much of the documentation that plays into decisions regarding the imputing of income will also be relevant when determining child support or alimony obligations.
How Does Legal Representation Impact Efforts to Impute?
A Florida divorce lawyer can be a valuable resource when courts aim to impute income. For those who wish to avoid imputed income, attorneys can help to demonstrate that these individuals are earning at their full capacity and therefore inclined to meet divorce-related financial obligations. Clients who believe that imputing income is necessary may look to divorce attorneys to help demonstrate that unemployment or underemployment are relevant issues.
Regardless of whether courts seek to impute income, it is worthwhile to work closely with a Florida divorce lawyer while dealing with child support or alimony concerns. Divorce attorneys can provide valuable insight and strong advocacy throughout the duration of the divorce process. Simply put, there is no substitute for in-depth legal advice and assertive representation.