What is imputation of income in Virginia family law cases?

Posted on Dec 21, 2020 by Katie Carter

 

Divorce changes things. Though many women are quick to point out to me that the equitable distribution factors cite the standard of living established during the marriage, there’s often no way to maintain that standard post-divorce. Most people live up to their means, and there’s just not room in the average family’s budget to support two separate households in the same manner that just one would be maintained.

There are a lot of factors that affect the amount of support that might be awarded, and to whom. The court will look at the decisions made during the marriage by the parties – whether the children were homeschooled, for example, or whether a special needs child mandated (or, perhaps, continues to mandate?) that one parent stay home to care for and educate the child. The court would also look at whether the parties decided to have one parent stay at home, or whether one parent voluntarily reduced her hours or prospects to support the family.

Military families, for example, often run into this challenge – as a wife moves across the world, supporting her husband’s career, her own takes a backseat. Not only that, but her prospects are permanently limited.

All of these things – and still others that I haven’t mentioned or explored – can impact the choices a family makes, and the ultimate affect on the individuals involved. It can create an imbalance and, when things tend towards divorce, that imbalance has to, in some ways, be adjusted or corrected.

I think it would be naïve to suggest that the imbalance is equalized, or that the law is centered on some abstract (and highly individual) concept of “fairness”. In my experience, the higher earning spouse generally ends up in a better position in the long term – because the spousal support awarded doesn’t result in a complete equalization of incomes. And, in any case, spousal support is only designed to “compensate” for the benefit of what was earned or achieved during the marriage. If the higher earning spouse goes on to earn more – through promotions or bonuses or raises – after the marriage ends, well, that spouse is entitled to that separately.

It’s not entirely fair, of course, because it’s impossible to ignore the fact that that spouse is in that position by virtue of the work that was done during the marriage. But it’s irrelevant for our purposes, because the law doesn’t contemplate that.

Spousal support is designed to adjust the inequality of incomes, and to compensate a lesser earning spouse (at least somewhat) for that disparity.

Imputation is a way that this is achieved. Imputation looks at both parties and ensures that they’re achieving to their potential – because the alternative is that one party could do less and expect the other to pick up the slack indefinitely.

We get this question all the time – will I have to get a job? — and imputation relates directly to that question. While the court can’t force you to get a job, it can hold you accountable for earning a certain level of income. Regardless of the decisions made during the marriage, the court can look at your education, experience, and earning potential and judge that you’re capable of earning a certain amount.

Of course, other factors – like what led you to stay at home or reduce your hours in the first place – will impact that decision, too. If you have a special needs child or you are disabled yourself, that matters. The court won’t automatically assume you can earn money; that is a finding that would have to be established by evidence. Typically, a vocational expert is involved in making this kind of recommendation to the court.

Similarly, he can’t just quit his job and earn less to avoid paying your spousal support. We’ll look at his education, training, his previous earning, etc., and can ultimately determine whether he’s voluntarily underemployed.

We run into this sometimes with military husbands, too. Say they’re retired from active duty, so earning retirement income only. It’s probably not reasonable – though, again, a vocational expert would be involved – for him to choose not to work at all at the age of 40-something. We’ll look at what he can earn, and what he has been earning, to help inform the court.

Voluntary underemployment doesn’t mean, though, that someone who is working as a teacher or police officer will be required to change careers to maximize their earning potential, especially if their job is one that they’ve had for some time, or that they switched to prior to the parties’ separation. You aren’t an underearner just because you work in a field that is underpaid; you’re an underearner if you work in a job earning less than what you earned for seemingly no reason.

Imputation can be used for or against you, depending on the factors involved in your case. You’ll want to talk to an attorney about your individual circumstances, including whether or not you can get a job, what limiting factors might be involved, and so on. Likewise, if your concern is that your husband will make decisions that impact your ability to receive support, you’ll want to discuss those and come up with a plan of action.

For more information, to schedule a consultation, or to learn about our divorce seminars, give our office a call at 757-425-5200 or visit our website at hoflaw.com.