Understanding the Income and Expense Declaration in California Family Law Cases

When dealing with child support, spousal support, or attorney fees and costs in California family law cases, it's essential to understand the importance of the Income and Expense Declaration (Judicial Council Form FL-150) or Financial Statement (Simplified) (Judicial Council Form FL-155). These forms provide the court with crucial information to assess a party's earning capacity and make appropriate support orders.

A completed Income and Expense Declaration should include the party's current employment details, age, and educational history. It must be attached to any application for support orders and filed on time, as an untimely declaration may be disregarded by the court (Marriage of Kahan & Diamond (2021) 72 CA5th 595, 601).

The declaration should have the party's three most recent pay stubs attached, and self-employed individuals must include a current federal income tax Schedule C and a profit-and-loss statement. Always check local court rules for any additional required attachments.

It's important to note that in proceedings involving child, family, or spousal support, parties cannot refuse to submit their state and federal income tax returns to the court (Fam C §3552(a)).

Post-judgment, either party may serve a request for a current Income and Expense Declaration (Fam C §3664), allowing them to assess whether a modification of support orders is necessary. For a declaration to be considered current, it must have been completed within three months before a hearing, with no significant changes in circumstances (Cal Rules of Ct 5.260(a)(3)).

By understanding the Income and Expense Declaration and its role in California family law cases, parties can ensure they provide the necessary information for the court to make informed decisions on support orders.

Will support be reduced when my ex retires at age 65?

Experienced Bay Area Family Law clients will tell their clients that retirement constitutes a change in circumstances. 

A supporting spouse's attainment of retirement age typically constitutes a material change of circumstances for purposes of a motion to modify a spousal support order, depending on the circumstances of a given case..

It has been found that there is no material change in circumstances occurred when the obligee became old enough to access a retirement fund without penalty, where the accessibility and possible increase in value of the obligee's share of the retirement accounts were part of the parties' expressed reasonable expectations in entering the stipulated judgment, the retirement accounts were divided equally between obligor and obligee, and by the time of the hearing the obligor was also old enough to access his account without penalty; since the marital settlement agreement, the obligee had become unable to work due to illness, and the obligor's income had increased. In re Marriage of Dietz, 176 Cal. App. 4th 387, 97 Cal. Rptr. 3d 616 (4th Dist. 2009), as modified, (Sept. 2, 2009)

Can you impute income from assets?

Maybe. The court's ability to impute income from assets derives from section 4058, which defines "annual gross income" as "income from whatever source derived," and states that "[t]he court may, in its discretion, consider the earning capacity of a parent in lieu of the parent's income . . . ." (Id. at subds. (a) & (b).) The provision has been consistently interpreted to include the supporting party's ability to earn income from non-income producing or underperforming assets. 

You can contact me at Amanda@gordonfamilylaw.com for more information.

What is a Gavron warning?

If you are paying spousal support you may want to ask the Court to make a Gavron warning. 

A Gavron warning is when making a spousal support order, the court may advise the supported party that he or she should make reasonable efforts to assist in providing for his or her support needs, taking into account the particular circumstances considered by the court under Fam C §4320, unless, in the case of a marriage of long duration as provided for in Fam C §4336 the court decides this warning is inadvisable. Fam C §4330(b). The warning may be provided before trial as part of a temporary support order, or by stipulation, or possibly by notice from the supporting party. If the court issues the order, it should be reflected in the order or Judgment.  

You can contact me at Amanda@gordonfamilylaw.com for more information.

Is rental income included in a support calculation?

Rental income where the income only covers the property expenses generally would not be included in a support calculation.

This is because the “cash flow” is the amount received in rent less what is being paid out, which includes mortgage principal and interest, taxes, insurance, and repairs among other real costs that equals the net income for support purposes before tax.  Only the net income is considered as part of income.  

What we recommend is to go to the rental property schedule of the tax return and add back the depreciation and subtract principal paid down not he mortgaged since only the interest part of the mortgage payment is an allowable deduction for the IRS.  Only if a party had remaining income AFTER paying the mortgage and such, that would be included in the support calculation.

Contact amanda@gordonfamilylaw.com to speak about your specific child support issues.