Q. My husband started a business with his brother as equal owners. They pay themselves a salary, but both families run all possible expenses through the business, cell phones, cars, vacations, tickets to sporting events, a shared ski condo, even an addition on our house.
I am a per diem nurse, only working a few shifts per month. I do work more during the summer when our kids are at sleep away camp because there are more shifts available to cover.
My lawyer says support will only be based on the salary my husband pays himself and that during the year I should work as much as I do in the summer to make up the difference in lifestyle. That just doesn’t seem right to me. My husband has offered to buy me out of his half of the business by giving me his half of the house equity and paying the rest over the next 10 years because he does not have the cash to do it now.
It sounds like I am expected to live on nominal support plus my half of the assets and work more. Meanwhile he keeps his lavish lifestyle on the company dime. Is there a way for me to get more support?
A. In the most simplistic terms, you can increase his income for purposes of paying support by decreasing the value of the business and, therefore, your buyout amount. When business appraisers value a business, they look at what the salary would be if an independent third party was hired to perform the job your husband does. Sometimes that means adjusting or normalizing his salary. The higher his salary is set at, the lower the value of the business because of the impact on the projected cash flow used for determining value.
You will get either a high salary that takes into account the lifestyle spending for purposes of support or a high value for purposes of buying out your share in the business.
Do you want more support or a higher business value? I suspect the answer depends on the value of other assets, including your house. You could try to negotiate a middle scenario where he pays the low support but continues to pay for family cell phone plans, cars, a certain number of tickets to sporting events, etc. until your children are emancipated with only a small reduction in the value of the business.
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