Anita from Kirkland writes:
“I have been divorced from my ex-husband since early 2010. We have two minor children together. Our divorce judgment provides that my ex-husband must pay child support, as I have full custody of our two children. The child support was based on the salary declared in his 2009 income tax return and assessment.
Last week, I was served a motion where my ex-husband is now asking the Court to reduce child support, as he claims he is now making far less money now, as opposed to his 2009 income.
I was appalled, to say the least, when I read his allegations, as I am fully aware that not only has my ex-husband continued to live a lavish lifestyle, but he is now a majority shareholder of the lucrative company he works for. In fact, I have been made aware that my ex-husband has simply decided to reduce his declared income, leaving a larger part of the equity in the company.
Can the court establish a “deemed” income for my ex-husband or will I necessarily be penalized by the fact that my ex-husband now declares much less revenue on his income tax returns?”
The fact that your husband has now become a majority shareholder means you are entitled to a copy of the company’s financial statements.
In fact, according to the case law, the Court could decide to add roughly 5% of the company’s retained earnings to your ex’s declared income. Furthermore, your ex-husband’s assets and liabilities, general financial portrait, expenses, etc. will all be the object of an analysis. In fact, the Court has the discretionary power to determine and impute for your ex-husband a more realistic revenue calculation, depending on the circumstances.
Sonia Rotondo, Attorney-at-Law
Alepin Gauthier avocats inc.