How will the sell of my business affect my current child support order?
The sale of your business only affects your current child support order if it constitutes income or earnings under Texas Family Code Chapter 154. I am unsure whether it fits into resources at all. You should consult family law counsel in person. See the following statute:
SUBCHAPTER B. COMPUTING NET RESOURCES AVAILABLE FOR PAYMENT OF CHILD SUPPORT
Sec. 154.061. COMPUTING NET MONTHLY INCOME. (a) Whenever feasible, gross income should first be computed on an annual basis and then should be recalculated to determine average monthly gross income.
(b) The Title IV-D agency shall annually promulgate tax charts to compute net monthly income, subtracting from gross income social security taxes and federal income tax withholding for a single person claiming one personal exemption and the standard deduction.
Sec. 154.062. NET RESOURCES. (a) The court shall calculate net resources for the purpose of determining child support liability as provided by this section.
(b) Resources include:
(1) 100 percent of all wage and salary income and other compensation for personal services (including commissions, overtime pay, tips, and bonuses);
(2) interest, dividends, and royalty income;
(3) self-employment income;
(4) net rental income (defined as rent after deducting operating expenses and mortgage payments, but not including noncash items such as depreciation); and
(5) all other income actually being received, including severance pay, retirement benefits, pensions, trust income, annuities, capital gains, social security benefits other than supplemental security income, United States Department of Veterans Affairs disability benefits other than non-service-connected disability pension benefits, as defined by 38 U.S.C. Section 101(17), unemployment benefits, disability and workers' compensation benefits, interest income from notes regardless of the source, gifts and prizes, spousal maintenance, and alimony.
(c) Resources do not include:
(1) return of principal or capital;
(2) accounts receivable;
(3) benefits paid in accordance with the Temporary Assistance for Needy Families program or another federal public assistance program; or
(4) payments for foster care of a child.
(d) The court shall deduct the following items from resources to determine the net resources available for child support:
(1) social security taxes;
(2) federal income tax based on the tax rate for a single person claiming one personal exemption and the standard deduction;
(3) state income tax;
(4) union dues;
(5) expenses for the cost of health insurance or cash medical support for the obligor's child ordered by the court under Section 154.182; and
(6) if the obligor does not pay social security taxes, nondiscretionary retirement plan contributions.
Thomas J. Baker of Baker & Tisdale PLLC principally practices in the Central Texas area, including Bell, Coryell, McLennan, Milam and Williamson counties. The advice given here is not and ahould not be taken as a substitute for in-personal consultation with counsel, particularly where legal documents, such as court orders need to be reviewed. I am Board-Certified in Family Law but not in any other areas of practice.
The quick answer is it depends. Your child support is calculated based on your net income. So depending upon the terms of the sale of your business, your new income could change. But keep in mind that there is a cap on guideline support. That cap is cure entry the first $8550 a month. You really should talk to a family lawyer for further information before you complete that sale.
Although I am a lawyer, I am not your lawyer. The site is an excellent resource for locating legal counsel, but posting answers to questions does not create an attorney/client relationship.
I think the Court would certainly consider the income from the funds from the sale of the business going into the future. For example, if you put the money in a cd savings account, the Court would consider the interest payments you receive as part of your income. However, if the Court considers all the proceeds from the sale and sets child support based on that as additional income, your child support would exceed guideline support based on your income moving forward and you would request a downward modification in the near future. I think the Court would want to refrain from putting an order in place that causes you to return to Court within a year. There may be a more definitive answer in judicial opinions, but the family code appears to fail to answer this question on its own.
This answer does not constitute legal advice. An attorney should be consulted to provide legal advice to your specific situation based on a fuller understanding of the facts.
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