Wealthy Child Support Pre-Tax Profits Lawyers at MacLean Law understand how to determine proper income for spousal and child support cases when incomes are in the millions. The number one mistake people make when they have a case involving business owners is using the personal tax returns of the paying and receiving spouses. Don’t leave hundreds of thousands on the table that you and your children deserve and don’t foolishly overpay either. Many lawyers have a limited working knowledge of company financial statements, general ledgers, capital dividend and shareholder accounts and often overlook “statements of changes in cash flow”. Make sure your lawyer handles these huge cases on a daily basis like the high net worth family and divorce lawyers lawyers at MacLean Law do.
High Net Worth Family Lawyers In Vancouver Tel: 604 602 9000
MacLean Law’s Wealthy Child Support Pre-Tax Profits Lawyers set records for the highest spousal support and child support awards of over $120,000 a month, and this week we just helped a paying spouse who is growing his company pay proper support based on no available pre-tax profits being added to what he withdrew annually. The key for any business is for courts not to kill the goose that lays the golden egg and to be respectful of legitimate business decisions. Profits needed to maintain and grow the business are not properly AVAILABLE for extra payments of spousal or child support under section 18 of the Child Support Guidelines.
See our latest win here set out in cogent reasons from Justice Murray of the BC Supreme Court.
Our client successfully defended a claim to have him pay thousands more per month of child support and received costs from his ex-spouse for his successful outcome.
Justice Murray held that key factors for fair child support involving this construction and crane company’s pre-tax profits included:
[18] The experts agree on how to calculate available income. More specifically, they agree that the following factors must be considered in determining available cash:
a) The company’s ability to distribute cash to its shareholders is key;
b) Covenants from the banks require significant funds to be maintained in the Companies;
c) Surety bonding requires that a certain level of working capital must be maintained;
d) Capital expenditures were made by the Companies in an effort to stay viable and competitive;
e) The Companies must keep working capital in the Companies in order to weather upcoming financial challenges, including the cyclical nature of the industry, delayed payment of receivables, increased competition in the market, increased wages, and overhead costs;
f) The Companies are experiencing an increased collection rate for accounts receivable and repayment of long-term debt which leads to issues with cash flow.
Wealthy Child Support Pre-Tax Profits Lawyers Synopsis Tel: 604 602 9000
MacLean Law’s MacLean and Bartholomew, Wealthy Child Support Pre-Tax Profits Lawyers just had a huge win for their delighted client on a child support “Section 18 pretax profits success for business owner” case where the company profits were in the $8 million range annually but were prudently used to grow the young company company. The Court found none of the pretax profits above a draw of $137,500 were found available. The mother argued the father payor, who owned 50% of a business with his civil engineer spouse should have 100% of the profits attributed to him in the range of up to $8 million. They later admitted perhaps only 50% should be used. We cross examined their expert and obtained key admissions from the mother’s expert showing none of the extra profits of up to $8 million a year above the father’s draw of $137,500 were available for extra child support.
Some payors tell us they think support is like Robin Hood versus the Sheriff, and they may not be wrong. Some lawyers may be tempted to mediate or split the difference to lower their stress of spending 24/7 to win a case that grows the “tree of justice”. What happens when the “Sheriff” acting for the payor says the demands for spousal or child support are unjust when a company is being grown and the owners are killing themselves to pass on their hard earned wealth to the next generation? Call our high net worth child support lawyers to understand your rights and obligations.
Vancouver Wealthy Child Support Pre-Tax Profits Lawyers
Critically, what happens when the pretax profits are in the millions but needed to sustain and grow the company and hundreds of alleged thousands of dollars of arrears are at stake?
Here is the law you and your family lawyer need to know:
[54] Whether to use any, part or all of a corporation’s pre-tax earnings depends on the circumstances of each case. The case law provides the following principles to guide the assessment:
a) It is not necessary for the claimant to show bad faith or an intent by the payor spouse to defeat the Guidelines to demonstrate that all or part of the corporation’s pre-tax income is available for distribution: Kowalewich, at para. 40;
b) The onus is on the payor spouse to “present clear evidence showing that part of the pre-tax income is not available”: Namdarpour, para. 124; Quinton v. Kehler, 2020 BCCA 254, at para. 83-84;
c) However, there is no requirement for the payor spouse to demonstrate “that the business could not be run in a fashion that generates more available income”: McKenziev. McKenzie, 2014 BCCA 381, at para. 102 [McKenzie];
d) In assessing whether to include corporate income in Guideline income, the court is not required to “second guess business decisions”; nor is it required to “place the largest available shovel in the company store”: Kowalewich, at para. 44;
e) Instead, the court must assess “a spouse’s allocation of pre-tax income between business and family purposes for fairness … on priorities as [parents] would in an intact family”: Kowalewich, at para. 44.
f) In doing so, the court “must have regard to the evidence of legitimate business needs in determining what portion of pre-tax corporate income to include in annual income”: Kowalewich, at para. 58-59;
[55] In the end, the quantification of a payor’s income for support purposes is a question of common sense in which “a court might ask what an objective well-informed parent would make available for child support in the circumstances of a particular business … having regard to the objectives of [the Guidelines and] the underlying parental obligation to support children”: McKenzie, at para. 102, quoting Kowalewich, at para. 45.
Winning BC Wealthy Child Support Pre-Tax Profits Lawyers Tel: 604 602 9000
In this case the MacLean Law “Sheriffs” obtained a key new case for justice for payors using a guideline income of $137,500 not the several millions of guideline income for child support the mother asked the Court to use.
It is critical your high net worth child support lawyers know the law to ensure payors, recipients and their children receive the proper amount of support and receive their fair share from their parents in the future. If you are a wealthy business owner or their supportive co-owner or spouse, a professional, a movie star or athlete or entrepreneur, it is key you call us fast to maximize your results.
Our high net worth child support lawyers are here to help both the paying and receiving spouse.
