Including Bonuses for Child Support Awards in Tennessee Child Support

Including or Excluding Bonuses for Child Support Awards in Tennessee Child Support

Simmons v. Simmons – Tennessee Court of Appeals case summary on income determination for child support.

Including or Excluding Bonuses for Child Support Awards in Tennessee Child Support

Including or Excluding Bonuses for Child Support Awards in Tennessee Child Support

Allison Lyn Simmons and Richard Lee Simmons were married for seven years and had three children together.  The children were six, five, and two years old at the time of the divorce hearing.  The Father and Mother previously both worked as flight attendants when they were married, but the Father was the sole provider since the first year of marriage.  During the marriage the parents went deeply into debt, in part due to the Mother’s spending, and filed for bankruptcy. Continue reading

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How many years’ salary should be averaged for child support in TN?

How many years of salary should be averaged to determine parent’s salary for child support purposes in Tennessee?

DAVID L. ADAMS v. NANCY W. ADAMS – Tennessee Child Support Case Summary

How many years of salary should be averaged to determine parent's salary for child support purposes in Tennessee?

How many years of salary should be averaged to determine parent’s salary for child support purposes in Tennessee?

In 1994, Daniel L. Adams (“Father”) sued his wife, Nancy W. Adams (“Mother”) of 12 years for divorce.   Their two children were aged ten and eight years old at the time the divorce request was filed.  The Mother has a high school diploma and at the time of the divorce worked as a teacher’s aide in the local middle school and as the music director for a church.  In 1994, she earned $7,950.  The Father is a lawyer and a sole practitioner since 1988.  From 1988 through 1992, the Father’s income varied between $30,000 to $97,000.  In 1994, his income was $134,300.The couple was divorced on September 25, 1995.  The trial court found that the Father’s  gross monthly income was $4,600 and using this figure, awarded child support in the amount of $ 1,060 per month for both children.   In addition, the trial court ordered the Father to provide medical insurance for the children and to pay any medical costs not covered by insurance.The Mother filed an appeal asking that the child support be increased.  The Mother did not argue that there was a change in circumstances but rather that the trial court made a mistake in setting support at $1,060 based on a calculation of the Father’s gross income at $4,600.   The appellate court found that the trial judge used the income figures for 1992 ($55,824) and 1993 ($52,008) to determine the Father’s income.    The appellate court, however, held that the trial court could have come to a more realistic income figure by averaging the Father’s income over the last five years, including 1995 (no figures are provided for 1995).

The appellate court sent the issue of child support back to the trial court, and asked the trial court to determine the amount of child support using an average of the Father’s net income over the past five years, including 1995. The court was asked to calculate the Father’s  net income according to Rule 1240-2-4-.03 of the Child Support Guidelines, entitled “The Income Shares Model.”

The Tennessee Child Support Guidelines, using the Income Shares Model,  take into account both parents’ income and the needs of the child or children.  Each child’s basic needs – food, housing, transportation, clothing and entertainment – are calculated on a monthly basis.  Gross income is then calculated for each parent.  Gross income is based on many sources of income, including, but not limited to, wages, salaries, bonuses, commissions, overtime, severance payments, interest, dividends, net capital gains, worker’s compensation, disability, prizes and lotteries, just to name a few.  Once the parent’s gross income is determined, deductions may be made based on various types of “credits,” such as self-employment tax, for self-employed parents.  In general, the amount of child support needed is divided by the AGI of each parent, determining the share each parent has to pay monthly.

No. 01-A-01-9606-CH-00281, Court of Appeals of Tennessee, Middle Section, at Nashville, January 8, 1997.

See original opinion for exact language.  Legal citations omitted.

For more information, see Averaging Income in Tennessee Child Support Law and Tennessee Child Support Answers to FAQ’s.  For legal updates, news, analysis, and commentary, visit our Tennessee Family Law Blog and its Child Support category.  A Memphis child support attorney from the Miles Mason Family Law Group can help you with Tennessee child support issues including setting or modifying child support. To schedule your confidential consultation about Tennessee child support, call us today at (901) 683-1850.

In TN Child Support Retained Earnings Must Be Manipulated to Be Income

Tennessee law case summary on income determination. Absent a showing that the retained earnings were excessive or that an obligor was actually manipulating his or her income, the retained earnings of an S corporation should not be imputed as income to the sole or majority shareholder in calculating a child support obligation. Tennessee child support law from the Tennessee Court of Appeals.

Taylor v. Fezell – Tennessee child support case summary on retained earnings as income.

Douglas Fezell and Angela Daniels were married in 1986, and had two children. The couple divorced in 1999.  In their Marital Dissolution Agreement (MDA), Mrs. Fezell was designated as the primary residential custodian of the two minor children. The MDA also provided that Mr. Fezell was to have visitation time greater than the standard amount contemplated by the Tennessee Child Support Guidelines (guidelines).  In consideration of Mr. Fezell’s additional visitation and the establishment of a trust fund for the children, the parties agreed that Mr. Fezell would pay child support in the amount of $1,000 per month until July 31, 1999; after that it would increase to $1,300.  The MDA also provided a method to calculate Mr. Fezell’s contribution to the trust.

Mr. Fezell’s child support obligation was based, in part, on his income from Professional Vending Services (PVS).  At the time of the divorce, Mr. and Mrs. Fezell were the sole shareholders of the company, each owning a 50% interest.  The Fezells agreed in the MDA that Mr. Fezell would continue to run PVS as the sole shareholder and president, and that he would pay his ex-wife $310,000 in exchange for her half of the company.  Mr. Fezell completed the purchase of this stock and was the sole shareholder of the corporation at the time of the appeal to the Tennessee Supreme Court. Continue reading

Tenn. Child Support on Business Owner’s Earnings Less Certain Expenses

Tennessee law case summary on income determination and deductions for income determination of a business owner under Tennessee divorce and family law from the Tennessee Court of Appeals.

Presson v. Presson – Tennessee Child Support Case Summary – forrestry services business

Michael and Joan Presson were married in September of 1974. They had one child.  Mr. Presson sued for divorce in 1991, and the Pressons entered into a Marital Dissolution Agreement (MDA) three days after the divorce complaint was filed.  The MDA set Mr. Presson’s monthly child support obligation at $700.  Mrs. Presson subsequently consulted two attorneys before retaining a third in an attempt to invalidate the MDA.  The parties entered into an Amended and Re-stated MDA in July 1991.  This second Agreement provided that Mr. Presson was to pay monthly child support of $800.

In June 1992, the Mrs. Presson filed a petition to set aside the final decree regarding the child support.  At an evidentiary hearing in the trial court.  Both parties presented expert testimony touching upon Mrs. Presson’s mental and emotional state during the period of negotiations leading up to the execution of the Amended and Restated MDA.  The trial court entered a nine page order on June 18, 1993, in which it denied the Mrs. Presson’s Petition to Set Aside Final Decree, but increased her child support entitlement to $1,000 per month plus $300 per month to be placed in an educational trust fund. Continue reading

Tennessee Child Support Income Not to Include Corp’s Retained Earnings

Tennessee law case summary on reasonable retained earnings not included in income for child support in Tennessee divorce and family law from the Tennessee Court of Appeals.

Piper v. Andrews, 1997 WL 772127 (Tenn.Ct. App., 1997).

Barbara Andrews Piper and Donald Andrews divorced in 1989.  Mrs. Andrews was awarded custody of the couple’s two minor children.  Mr. Andrews was ordered to pay $600 a month in child support.  Mr. Andrews now lives in Texas, and Mrs. Andrews lives in Tennessee.  Mrs. Andrews sought an increase in child support based on her ex-husband’s income from a closely-held corporation of which he was the sole shareholder.  In addition, Mr. Andrews’s visitation was less than the standard under the child support guidelines.

Since the divorce, Mr. Andrews had become the sole shareholder of a closely held corporation.  Mrs. Andrews argued that because all of the corporation’s income would inevitably go to Mr. Andrews, the trial court should set child support based on his increased salary and compensation package, as well as the corporation’s annual income.  The trial court held a hearing on the petition. It heard testimony regarding Mr. Andrews’s income from both parties as well as expert testimony from CPAs for both parties.  The trial court granted Mrs. Andrews increase in an amount of child support, but it was less than the she was seeking. Continue reading

Adequate Income Documentation Required Under Tenn. Child Support Laws

Tennessee law case summary on child support and documentation required for income determination under the Guidelines for Tennessee divorce and family law from the Tennessee Court of Appeals.

Jennifer Ferrari-Bullock v Justin Randall – Tennessee child support laws case summary.

Tennessee Child Support Laws Require Adequate Income Documentation

Tennessee Child Support Laws Require Adequate Income Documentation

Jennifer Bullock, Wife, and Justin Randall, Husband, married in 1992. The parties had four minor children. In September of 2009, the Wife filed for orders of protection on behalf of herself and the children against the Husband. The Wife, in the petition, checked a box that indicated she did not know of any pending actions concerning the custody of the children.

According to the report, the Husband restrained the Wife in the kitchen in February of 2009. This put the children and the Wife in fear. She noted that one of the children expressed fear about the Husband the following day. The court issued an ex parte order of protection as a result. Continue reading