Variable Income

[Sparrow]

Jurisdiction

Colorado

I am in a situation where I have had some significant events occur in the last few years, including buy out of a partnership, startup of a new company where income was received in the following year the work was done, and then being hired as a w2 employee (inactivating the startup) that has a significant variable bonus depending on how many billable hours I work beyond a certain threshold. Sometimes there are no projects for me to work and I get nothing, and sometimes I go well above it and earn a significant percentage of my base pay. Then my wife files for divorce.

I am at the point where we are about to go into mediation and my lawyer is taking all of these extenuating circumstances and including them in the maintenance calculation for the position statement. My argument is that incomes which cannot be considered as on-going need to be taken into consideration when maintenance is determined.

To make it fair, my suggestion is that we take my base salary only and use that for the base maintenance calculation. Then add a clause stating that any bonus income is subject to the maintenance percentage payable when bonus income is received. Then the courts can do a reconciliation every year or two years to confirm that I am abiding by that clause. I have no issue with being fair to her, but I do take issue when the maintenance is based on income that fluctuates greatly, and in reality will likely be lower for me going forward.

This, in my opinion, eliminates me from being subject to maintenance payments that are unrealistic and are largely out of my control (and even my employer's control to some extent), and also is fair to my wife should I end up receiving bonuses that she gets a fair percentage.

My questions are:

1) Is this a reasonable (and fair) request for our position statement to the mediator?
2) If so, and should my lawyer not want to support this, what are my options?

 

[adjusterjack]

1) Is this a reasonable (and fair) request for our position statement to the mediator?

Fair is where you go on rides and eat cotton candy. Reasonable is in the eye of the beholder. I suspect that your soon to be ex wife will not find it reasonable and want more than you are willing to offer and the court is likely to award her more than you are willing to offer. That's called reality.

2) If so, and should my lawyer not want to support this, what are my options?

If your lawyer doesn't do what you tell him to do your option is to fire him and get another. Though there is no guarantee that the next lawyer will agree with you.

 

[army judge]

1) Is this a reasonable (and fair) request for our position statement to the mediator?
2) If so, and should my lawyer not want to support this, what are my options?

I forgot everything I thought I knew.

Good luck.

 

[adjusterjack]

Colorado is not a community property state and OP is asking about spousal maintenance.

Division of assets in an equity state is likely to depend on much of the information you provided for CA, so thanks for that.

Here are some resources that Sparrow can look to for information and calculators for spousal maintenance in Colorado.

colorado spousal maintenance calculator at DuckDuckGo

 

[army judge]

Colorado is not a community property state and OP is asking about spousal maintenance

Correct you are, sir.

I'll endeavor to read more carefully.

 

[Sparrow]

I am fully aware of both asset division and maintenance laws and guidance that the courts are to use. That is not my question.

My question is around what my attorney uses as a "Position Statement" which is submitted to the mediator for all of us to work through. The position statement he wants to submit specifies what my actual income is, what my monthly expenses are, my deductions etc.

Again the actual income I had this year is not something that will occur going forward. Yes, it is part of the asset division, and for that part I take no issue there. What I take issue with is that same income should not also be used in the maintenance guideline formula. Maintenance should use the income that is actually attainable/reasonable going forward. (that is my argument anyway).

If you sell your busines this year, you can't re-sell it every year to maintain that same level of income that the maintenance calculation uses in the formula. Again, asset division, yes. Maintenance no. And that is what I want my attorney to be very clear about.

That said, if there are concerns that there could be some future income which exceeds that base amount, then simply pay the maintenance percentage (40% for CO) of the amount that exceeds the standard income. This way it is fair and equitable for both parties.

 

[adjusterjack]

And that is what I want my attorney to be very clear about.

Then you write it out and sit down with your attorney and instruct him as to how you want him to present your position to the mediator.

Keep in mind that, even if your lawyer presents your position exactly as you want, there is no guarantee that your wife will accept it.

If she doesn't accept it, the judge will go by the statutory requirements in calculating maintenance.

 

[Sparrow]

Yes, I will write it out, but I just wanted to know if it is a reasonable request. I know it could be contested, but if it is sound, it has the potential to supercede unfounded requests that she and her lawyer could attempt. My defense is based on facts. Nothing more and nothing less.

Case in point, she has put on her SFS that she needs a vacation expense. The number she recorded as such is one we had thought about going into retirement. Not only is the amount equal to a joint expense "desire", when you look at our actual expenditures for vacations over tha last 5 years it doesn't support that level which she claims she needs. These are the types of requests I am trying to defend against with sound, reasonable and factual information.

Will it be sufficient? I dont know, but it seems better to start with a rock solid position than start off with one that makes unsubstantiated claims that we then have to make our case.

Anyway, I do appreciate your guidance here

Thanks

 

[Sparrow]

With regard to your comment

If she doesn't accept it, the judge will go by the statutory requirements in calculating maintenance.

What I am asking IS based on the statutory requirements, but the requirements do not specify whether the income should or should not include one time exceptional incomes nor does it address variability in income. It is structured as if each party makes a steady income and doesn't have any special events occurring in the last 3-5 years. If we fast forward three more years, what I am advocating is that number not the number that I currently find myself in. I am not trying to get out of anything, just state an argument which is true and accurate.

 

[adjusterjack]

I just wanted to know if it is a reasonable request. I know it could be contested, but if it is sound, it has the potential to supercede unfounded requests that she and her lawyer could attempt. My defense is based on facts. Nothing more and nothing less.

Again, reasonable is in the eye of the beholder.

All you can do is submit it and see how it goes.

Personally, I think you are trying to stiff your wife out of money she likely deserves. Seem obvious to me that you have, or will have, a lot more money than she does.

Is that what you want to see? My opinion? For the two cents that it's worth?

.

 

[Sparrow]

I am not. I have no issue giving her 40% of my actual income, and will submit proof of this each year to the courts if need be. But, actual income that I can truly earn, not based on one-time historical events.

Personally, I think you are trying to stiff your wife out of money she likely deserves. Seem obvious to me that you have, or will have, a lot more money than she does.

That being said, I am curious as to how you came to this conclusion? This seems to be what everyone defaults to even before really listening/considering the facts. Why is this the case?

Just because I am the one who earns more? What if the roles were reversed? Would I then be considered someone trying to take advantage of her by requesting maintenance based on expenses which were not actually seen historically?

This is the real issue with our social biases. If they are accepted by the judges/mediators, then "fair and equitable" (as the law states) is ignored.

 

[army judge]

Just because I am the one who earns more? What if the roles were reversed?

Gender has NOTHING to do when it comes to WHICH spouse ends up paying the other spouse.

If your financial positions were reversed, you MIGHT be getting alimony.

So far, all you're doing is discussing alimony or spousal and child support.

Before you are required to DISBURSE one US dollar, you'll have your day in court.

That is, IF you choose to defend your loot and not allow others you don't know to mandate what you end up doling out of your hard earned assets!!!

That said, speculating about outcomes you can't control serves no point.

As suggested, hire a lawyer to protect as much of your loot as lawfully possible.

One final point, mate.

No one is required to be married.

Should you end up divorced, think long and hard before you marry anyone, or even engage in romantic entanglements.

Frankly, I've never faced what you're about to feel.

When it ends, you might be happier alone.

I've always said, should my wife predeceased me, I'd live out my remaining days happily with ME, MYSELF, and I!!!

 

[Sparrow]

Before you are required to DISBURSE one US dollar, you'll have your day in court.

That is, IF you choose to defend your loot and not allow others you don't know to mandate what you end up doling out of your hard earned assets!!!

Thus, why I was asking if my arguments were sound, and sufficient enough to overcome the initial impressions that people assume I am trying to take advantage of her. All I am trying to do is not be taken advantage OF, and it is proving to be an uphill battle because immediately, everyone's eyebrows go up and assumptions are made that I am the one not being truthful and/or accurate.

My current lawyer seems to be also in this boat. So, I am trying to work on something that makes it ultra clear to him that what I am claiming is true and accurate. It is a way to be fair to both parties, let alone try to stiff my wife out of more than she deserves.

No one is required to be married.

Should you end up divorced, think long and hard before you marry anyone, or even engage in romantic entanglements.

Yeah, well....I wasn't smart enough to see the patterns of behavior prior to getting entangled with her to know it would end like this, but I certainly don't regret any of the three kids we had together (that are now all grown up). As painful as it is for me right now, for the sake of my children, I would do it all over again. They are the joy of my life and to see them now having kids, and the joy it brings them, is the most rewarding experience I can imagine.

 

[adjusterjack]

Thus, why I was asking if my arguments were sound, and sufficient enough to overcome the initial impressions that people assume I am trying to take advantage of her. All I am trying to do is not be taken advantage OF, and it is proving to be an uphill battle because immediately, everyone's eyebrows go up and assumptions are made that I am the one not being truthful and/or accurate.

You asked for my opinion and I gave it. You didn't like it. So let's try this another way.

How much alimony does your wife want? Give me a dollar amount.

How much alimony do you want to give your wife? Give me a dollar amount.

If you can't provide those two figures, then you are wasting your time and ours asking about what's fair and reasonable.

 

[welkin]

There are states (Colorado being one of them) that still allow for lifetime alimony if you were married for 20 years or more or your spouse is disabled.

When I was getting divorced (married 25 years in NJ), my wife's attorney asked for lifetime alimony at the last settlement conference before the court date. My attorney asked to speak to me in private.

He said she will get the lifetime alimony if the court decides because of the NJ case law at the time. He told me to buy out the alimony no matter what I had to do to raise the money. He said if you are giving her alimony she will be in your life every year wanting your tax returns looking for a change in circumstances.

So based on actuarial tables my attorney made her an offer of a one time distribution of property (money) instead of the alimony. She and her attorney jumped at the offer. The court approved the entire settlement.

I have never heard from her or paid a single dollar to her since the divorce. That was 36 years ago.

That was the best advise I ever got from a lawyer.

 

[Sparrow]

I couldn't agree more! This is exactly what I am advocating. I know there is a potential should she re-marry or should I become disabled and can't work, that the alimony could be reduced, but the sheer stress and anxiety it delivers with each pay period is far more painful than that potential reduction.

Well, as it turns out, I stated my proposal in a different way to my lawyer, and it worked! He went back and found something he did several years back that was similar. Why he could not bring that up to begin with and save the back and forth, I have no clue, but looks like we are on a good path for a starting position. I know it could change, but at least we are not submitting to numbers that are unreasonable to attain and then trying to explain our way down to reasonable after the fact. That to me seems like a recipe for disaster.

Here is what I wrote to him:

I have been thinking a lot about the position statement and what I would like to state that would be accurate, fair and defensible. Here is what I propose it be based on, and then you can edit it to put in the proper wording for what it needs to contain.

Due to the significant variability of bonus income and also not being within the span of control of the respondent (and to some extent his employer), we propose that on-going maintenance income be based on the on-going base pay of $xxx/year (or $xxx/month) with the stipulation that any bonus pay be subject to 40% (pre-tax) maintenance pay upon receipt of such bonuses. Bonuses are currently paid quarterly. Confirmation of adherence to the additional alimony payment requirements can be accommodated by annual or bi-annual reconciliation submitted to the courts.

If during mediation, an agreement to use assets in lieu of maintenance is desired, our position is to use the target bonus amount, as per respondent's supervisor, as a way to value the amount the buy-out is to cover for the duration of the maintenance. Maintenance duration we propose be set at for the duration for remaining years until retirement in xxxx (xx years).

Furthermore, our position is that the expense levels of each party be based on a 3 year average of actuals divided equally. This represents a true picture of the spending patterns to support their Lifestyles during the term of marriage.

 

[Sparrow]

You asked for my opinion and I gave it. You didn't like it. So let's try this another way.

How much alimony does your wife want? Give me a dollar amount.

How much alimony do you want to give your wife? Give me a dollar amount.

If you can't provide those two figures, then you are wasting your time and ours asking about what's fair and reasonable.

Sorry you feel the amounts are needed to ascertain fairness. Fairness is not relative to the differential (though I will say it is significant). Fairness should be based on the argument(s) at hand.

I sure hope the attitude you are taking on this is not one that the mediator or judge has. If so, I would be judged on the surface, even before I can make any kind of argument for my case. And that is not what our judicial system is trying to achieve.