Truing Up Support Obligations: Best Practices and Remedies for Variable Income and Bonus Tables
/In family law cases where support obligations are based on variable income, such as bonuses or commissions, it's important to establish a process for "truing up" those obligations. Truing up refers to periodically reassessing and adjusting support payments to accurately reflect the actual income of the supporting party. This post will explore best practices for truing up support obligations and the potential remedies for failure to do so.
1. Establish Clear Truing Up Mechanisms:
To ensure a fair and transparent process, parties should consider the following practices when establishing truing up mechanisms:
Define Truing Up Periods: Determine the frequency of truing up, such as annually or biannually, to account for changes in variable income.
Specify Calculation Method: Clearly outline how the truing up calculations will be performed. This may involve using bonus tables or percentage-based adjustments, as determined by applicable guidelines or court orders.
Require Timely Disclosure: Establish a requirement for the supporting party to promptly disclose their variable income, including bonuses, commissions, or other sources, to the supported party.
Document the Process: Maintain detailed records of income fluctuations, calculations, and any adjustments made during the truing up process.
2. Collaborative Approach:
Truing up is most effective when both parties adopt a collaborative mindset. Consider the following practices:
Open Communication: Encourage ongoing and transparent communication between the parties to share information about changes in income or financial circumstances.
Exchange Documentation: Require the supporting party to provide supporting documentation, such as pay stubs, bonus statements, or tax returns, to substantiate their variable income.
Mediation or Negotiation: If disagreements arise during the truing up process, consider involving a mediator or engaging in negotiations to reach a fair resolution.
3. Remedies for Failure to True Up:
In situations where a party fails to fulfill their truing up obligations, potential remedies can include:
Court Enforcement: Seek court intervention to enforce compliance with truing up obligations, possibly through enforcement orders or contempt proceedings.
Modification of Support Orders: Request a modification of the support order based on the supporting party's failure to true up, seeking adjustments to reflect the actual income.
Arbitration or Mediation: If both parties agree, consider alternative dispute resolution methods, such as arbitration or mediation, to resolve disputes regarding truing up.
Truing up support obligations based on variable income is crucial to maintaining fairness and accuracy in family law cases. Establishing clear mechanisms, fostering collaboration, and pursuing appropriate remedies for non-compliance are key elements in ensuring the ongoing accuracy of support payments.