Child Support: He's Hiding Assets

Two weeks ago one of my clients came in with a child support problem. She and her ex-husband divorced four years ago and had two minor children (10 and 12 years old). My client was awarded custody of the children and her ex-husband was ordered to pay child support. The family had substantial assets and my client felt at the time that the child support ordered by the court would be enough to cover the children's needs in the future.

During the past four years my client's ex-husband has been very successful. Prior to the divorce he had made a number of real estate purchases which skyrocketed in value over the past four years. He continues to hold onto the real estate. During that same period of time my client has discovered that raising teenagers is much more expensive than raising young children. She has appealed to her ex-husband to voluntarily increase the child support without having to go back to court. He has refused.

Most states have statutes which set uniform guidelines for awarding child support and allow the court to periodically increase or decrease a child support award when the finances of the paying parent change. We petitioned the court to reassess her ex-husband's finances. The problem we ran into is that the statute setting the uniform guidelines primarily bases an award of child support on the parent's monthly income. In this case, her ex-husband's records showed that his net taxable income per month had not changed. This is so because he had not sold any of the now extremely valuable property. The statute also prohibits placing any type of lien on the property should he sell the property in the future. This will allow him to wait until the children are over the age of 18 before selling the property. If he does this, the children will not be entitled to any portion of the sales proceeds.

A Plea for Equity
My client is now forced to apply to the court for an equitable adjustment to the child support based on the increased value of her ex-husband's assets. It is not likely that the petition will be granted. This could have been avoided had the original divorce decree provided for an increase of the child support based on a net increase in her ex-husband's assets. Remember, although state statutes provide a set of guidelines for establishing child support you are not limited by the guidelines. In most cases, a divorce attorney will anticipate the future needs of the children and the potential for the paying spouse to "hide" income.
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