Missouri Divorce and Family Law Blog : Kansas City Divorce Lawyer & Attorney : Wortman Law Firm

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Recent ruling:
TC A Minor Child, by and through JC, Next Friend and JC, Individually v SI
Missouri Court of Appeals, Western District - WD7455

Father appeals from a judgment entered in the Circuit Court of Clay County in an action to establish the paternity of his daughter, T.C.C. Father challenges the trial court's decisions related to custody, visitation, and child support.

AFFIRMED AS MODIFIED.

Where Father was awarded parenting time starting 7:15 a.m. Wednesday with an ending time alternating between 4:45 p.m. Thursday and 4:45 p.m. Friday, half of holidays, and an additional five consecutive days over the summer, the trial court erred in declaring Mother to have sole physical custody in light of the significant parenting time awarded to Father.
 

Though the trial court mislabeled the physical custody awarded in its judgment, it is unnecessary to remand for correction of the decree where this court can simply recognize and clarify that he is a joint physical custodian. 

The question of whether or not a sole custody award to one parent with parenting time to the other parent is truly a sole physical custody award, the question is whether or not the parenting time awarded to the other parent is "significant".  It has been held that a typical every other weekend with one evening per week schedule is "significant".

It is this author's belief that in most situations where the parents share parenting time on some sort of schedule, it is a joint physical custody arrangement rather than "sole custody with visitation"   Care should be taken in the drafting of the parenting plan and the judgment to reflect the proper terminology, as sole custody and joint custody are clearly  very different It would be only in the most restrictive of parenting plans where "sole custody with visitation" could legally exist.

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The following post was contributed by guest author Grant Webb, an accounting and accounting law writer for Bisk Education and Villanova University.

Forensic Accountants Fill a Unique Niche

Family law and divorce cases are often quite complex. Depending on the number of family members involved, the amount of assets at stake, and the specific circumstances of the case, even the most experienced attorney might need to acquire additional expertise to achieve the best results for the client. In cases where assets may have been hidden, misrepresented, under-valued or mysteriously liquidated, an experienced forensic accountant may provide the expertise necessary to uncover the facts needed so that the case can move forward in an effective manner.

With the increase in sophisticated technology over the past decade also comes the dawn of more sophisticated investigative power tools. At the same time, people who intend on hiding assets have also become stealthier. When a marriage with significant assets needs to be evaluated for net worth, the assets are often spread across many different areas. Property, businesses, savings accounts, mutual funds, municipal bonds, antiques, jewelry, and recreation items like watercrafts for example are all items that need to be documented and valued. Anticipating the divorce or other family litigation, one of the involved parties may begin to re-title items, sell off or give away valuable possessions to a close friend or relative for later retrieval, and in general hide investments. While the family or divorce attorney is building the case with a general understanding of these facts and other related details, a forensic accountant can usually retrieve highly detailed evidence to make the case stronger. Drawing connections to see the whole picture is a forensic accountant’s fortè. Working together with a family or divorce attorney, a forensic accountant presents a formidable partner on a legal team where financial wrong-doing is an important topic of the investigation.

A complex case requires the expert knowledge of professionals who can secure the best possible outcome for a client. Hiring an attorney who is accustomed to bringing in and working effectively with other expert professionals such as a forensic accountant could mean a more favorable outcome. While cost is always a concern when pursuing legal solutions to disputes, many settlements or court decisions will have long-lasting effects on family members so it is important to be as effective and thorough a possible as the case proceeds. A Certified Forensic Accountant offers a unique skill set to the legal professional and can help provide the experience necessary to help secure critical financial evidence. When choosing a family or divorce attorney to help resolve a complicated dispute, savvy clients make sure that they can keep the option open to bring in other experts, like a forensic accountant or CPA, in order to secure the best outcome possible despite stressful circumstances. There are countless justifications for hiring legal representation of this type but for clients that may not know the upside to hiring a forensic accountant or even know how to hire the right CPA, it's always a good practice to interview or even research these industry professionals to determine the best hire or fit for a client’s needs.

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New Case Law: CB v. DB Missouri Court of Appeals, Southern District - SD31614

Notwithstanding the fact that the Missouri case law generally states that tax benefits must go to the custodial spouse unless the trial court expressly finds it unjust or inappropriate to do so, our western district has held that noncompliance with Form 14 directions is not reversible error unless the appellant is prejudiced thereby. Sarwar v. Sarwar, 117 S.W.3d at 171.  Appellate review is for prejudice, not mere error Pruett v. Pruett, 280 S.W.3d 749, 751 (Mo.App. 2009).

“Here, Wife does not argue or suggest any prejudice, nor could [the Court] glean any from the scant record that she has provided. In fact, the indication is otherwise. In her post-trial motion, Wife represented to the trial court that her only income during the two-year history of litigation was unemployment benefits, which had expired; that she had been unable to obtain employment; and that her gross income was “zero.” By contrast, Husband was earning an income, and apparently could benefit from the tax exemption, while Wife seemingly could not. A judgment will not be reversed unless an appellant is prejudiced by an error that materially affected the merits of an action. Rule 84.13(b).”

Wife did not meet her obligation to show that she was entitled to appellate relief and the judgment was affirmed.

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Value of a closely-held corporation must be as fair market value and application of a calculation of value via a buy-sell agreement not related to fair market value is error. Wood v. Wood, No. 96218 (Mo. App. W.D., November 29, 2011), Romines, J.

This was an appeal from a dissolution of marriage action. The Husband appealed the decision on several grounds, but it comes down to his challenge of the valuation of his 30% interest in a closely-held corporation. Both parties had an expert testify as to the value. Wife’s expert testified as to value based upon a buy-sell agreement formula that existed between the shareholders. Husband’s expert testified as to his opinion of the fair market value thereof. The trial court concluded that the Wife’s expert had properly assessed value $1.062 million versus $325,000 by Husband’s expert.

Held: Reversed. “Wife’s calculation failed to comply with [the rule that fair market value at time of trial is required because Wife’s expert] does not seek a fair market value or fair market value of [Husband’s interest in corporation.]”

“Furthermore, the formula does not even employ a current appraisal of [Husband’s interest in corporation.] As part of the calculation of present share value, and instead uses the historical value of company in 2007 at $3,000,000 as the starting point.”

“[W]here an expert’s testimony does not attempt to determine fair market value, the trial court simply cannot find it more persuasive and credible than another and rely on such testimony in valuing those shares.”

Dissent: The dissent is based upon the technical failure of the Husband’s point relied on to preserve the issue for review on the basis found to be dispositive by the majority opinion. Consequently, the dissent would deem the claimed error not reviewable.

Source For Post:  Missouri Bar December Edition of Courts Bulletin - Mobar.org

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Under Missouri Law, certain property is considered to be non-marital, and not part of the division of the marital estate in a divorce proceeding.  Non-marital property includes property:

1. Acquired before the marriage;
2. Acquired by gift or inheritance;
3. Acquired in exchange for property acquired by 1 and 2 above;
4. Acquired after a decree of legal separation;
5. excluded by written agreement (pre or post nup)

In the case of an increase in value of a non-marital asset described above, the general rule is that the increase in value is also non-marital.  The exception to the rule occurs when marital assets, including labor or marital income, contribute to the increase in value.  The Court of Appeals has said that marital effort, labor , or services, will entitle a spouse to a proportionate share of the increase in value of the separate property, but only after "comprehensive substantiation", including proof of:

1. a contribution of substantial services;
2. a direct correlation between those services and the increase in value;
3. the amount of the increase in value;
4. performance of services during the marriage; and
5. the value of the services, the lack of compensation, or inadequate compensation received.

There must more than just services provided, but a connection between valuable services provided and the increase in value of the asset.  Note that income received during the marriage by either spouse is considered a marital asset, so if any income of either spouse is contributed to the asset, it is considered a marital contribution.  Likewise, in terms of a non-marital business, employment or labor for no or reduced salary is also considered a marital contribution.

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There are many ways that the income tax dependency for children in divorce can be handled, although most of them are not supported by the law.  If the parties are in agreement, then nearly any method of claiming the children can be used, including alternating years, splitting the deductions between the parents (in the case of multiple children), allowing the non-custodial parent to claim the children provided that child support is current, a combination of these, or any other method that the parties can come up with.

However, under Missouri law,  the custodial parent is entitled to claim the children for tax purposes each and every year, period.  So unless there is an agreement otherwise, this is what the Court will order.  However, regardless of any agreement or Missouri court order, federal income tax law requires a child to reside with a parent at least 50% of the time to be claimed as a dependent. So, if the parties have agreed to something else, such as alternating years, and the non-custodial parent has the children less than 50% of the time, the Internal Revenue Service (or Department of Revenue) can reject the claimed dependency notwithstanding the court order, as Missouri family courts do not have jurisdiction over the IRS or the power to alter federal law.  The only remedy would then would be for the parties to return to state court to seek reimbursement for the dollar value of the claimed dependency from the other parent, which the Court may not even entertain. 

So the general rule would be that the custodial parent gets to claim the children each year, unless an agreement is reached otherwise. But the word of caution on agreements (particularly for the non-custodial parent), is that both parties have to follow it, or it can be rejected by the taxing authority with the only possible remedy being a return to state court.

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The Circuit Court does not have authority to divide assets that are not owned by either spouse in a dissolution of marriage.  In a recent Missouri case, the trial court entered a judgment that divided certain trusts where the children were the sole beneficiaries.  Since the parties to the case did not have any interest in these assets (as they belonged to the children), the Court could not make any division.  The same would also hold true for property titled in the children's (or another persons) name, such as a vehicle or bank account. 

To view this recent opinion, click here.

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While Missouri courts normally follow the “American Rule” regarding legal fees – that each party is responsible for his or her own costs – Missouri dissolution of Marriage statutes give the court the discretion to order one party to contribute to the other party’s fees. Specifically, Section 452.355.1 provides:

Unless otherwise indicated, the court from time to time after considering all relevant factors including the financial resources of both parties, the merits of the case and the actions of the parties during the pendency of the action, may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding pursuant to sections 452.300 to 452.415 and for attorney's fees, including sums for legal services rendered and costs incurred prior to the commencement of the proceeding and after entry of a final judgment. The court may order that the amount be paid directly to the attorney, who may enforce the order in the attorney's name.

The court is always required to consider the financial resources of each party before deciding on a request for attorney’s fees.  While the court must consider the financial resources of each party, a spouse is not required to forego a claim for attorney's fees merely because assets on hand are available to make payment.

In most cases, attorney fees are not an issue, and usually judges are reluctant to award attorney fees. However, when the issue does arise, the conduct of the parties during the litigation and how the judge perceives the parties are usually just as important as financial resources in determining the award.

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In a recent decision by the Missouri Court of Appeals, clear, cogent and convincing evidence supported a finding of neglect in protecting the child, maintaining the household, and supervising the child.  "If a parent is unable to pay for all of a child's financial needs, he or she has a duty to provide as much as he or she reasonably can." A Father’s occasional support for child does not outweigh clear, cogent and convincing evidence of financial neglect through reluctance to work. The Circuit court’s determination of child’s best interests is subject to review for abuse of discretion. The Guardian ad Litem’s opinion is not controlling but merits “respectful consideration."

Missouri Court of Appeals, Southern District - SD30632

Source for Post:  Missouri Bar

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Similar to other states, Missouri is a modified no-fault divorce state. However, there is some misconception out there about what this actually means for divorcing parties in Missouri. Modified no-fault divorce means that a party does not have to prove that their spouse committed some kind of misconduct, such as adultery, abandonment, financial, etc., in order for the court to grant the divorce. All that has to be proven, with regards to grounds, is that there is “no reasonable likelihood that the marriage can be preserved, and that the marriage is irretrievably broken”, which is basically the familiar “irreconcilable differences”.  If that is proven, or as is often the case, agreed to in the filings, the court will grant the divorce (assuming jurisdictional and procedural requirements are also met). 

However, no fault does not mean that conduct is not relevant.  Although conduct does not need to be proven to actually get the divorce, conduct, or misconduct, can have a bearing on all aspects of the case.   Conduct can affect how the court divides the property, awards spousal maintenance, awards attorney’s fees, awards custody, parenting time, and to some extent child support. Although there is usually a preference for joint custody and equal property division, “no fault” does not mean that that will be the case, and “no-fault” does not mean that everything will end up equal.  The court has to look at other standards for each particular issue in the case, and will make orders accordingly as to those issues.

It is also not required that a spouse “grant” the other spouse the divorce, however it is possible that a party could try to prove that the marriage was not actually broken and could be preserved. My thought is that if spouses are actually to the point of litigating in court, the court is probably going to find that the marriage is broken. So, modified no fault may in reality mean actual no fault, but there is still that standard of proof in all cases.

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In a recent ruling by the Missouri Court of Appeals for the Southern District, a division of property and debt where the Wife received 93% of the assets and 27% of the debts, and the Husband received 7% of the assets and 73% of the debt was reversed and remanded to the trial court for further proceedings.

It is typical in a majority of cases for the trial court to divide property and debt equally. However, the Court is not required to follow a rigid formula for property division and is not required to divide the property equally. The division must be “fair and equitable” to the parties. This means that the court has a great deal of discretion when dividing property and debts, but there must be sufficient evidence to support a disproportionate division as being fair and equitable. In determining the property division, the court must consider the economic circumstances of the parties, contributions during the marriage, the value of non-marital property, conduct during the marriage, the custodial arrangement for the children, and other factors.

In the recent case, the Court looked primarily at the conduct during the marriage, and the trial court had found that physical abuse and verbal threats had occurred which supported the disproportionate division. However, there must be evidence to show the additional financial, emotional, or other burdens placed on the aggrieved spouse due to the conduct. It is not appropriate to “punish” a spouse’s marital conduct by way of disproportionate property division, and conduct is the only factor that must be considered.

In this case, there was evidence of the misconduct, but no evidence as to how it caused additional burdens or stress on the other spouse or the marriage, financial or otherwise to support the grossly disproportionate division. The case was remanded to the trial court for further proceedings to make those findings.

SD29991-  Missouri Court of Appeals for the Southern District of Missouri

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In today’s turbulent economic climate, where job losses or reductions in income are frequent, it is critical to immediately deal with a child support order upon any significant change in income. Failure to act quickly can lead to an even greater financial disaster.  Here’s why:

• In Missouri, a child support order, regardless of whether it is administrative (Family Support Division “FSD”) or judicial (through the Courts), remains in effect until modified. This means that even if income is reduced or lost, the obligor is liable for the child support under the order, regardless of income, until a formal modification proceeding takes place. 
• It is critical to file a motion to modify immediately upon an income change as the Court only has jurisdiction to go back and adjust child support back to the date of filing. Once it is filed, the obligor can then seek temporary immediate relief from the original order, and avoid the accumulation of child support arrearages.
• Failure to modify quickly can lead to the accumulation of child support arrearages that cannot be erased, which in turn can result in civil contempt, criminal non-support, suspension of driver licenses, interception of income tax refunds, additional payments to cover the past due child support, and other unpleasant results.
• It is not required that a person wait three years to modify the child support order, even if it is an administrative order. That is just the time interval in which the FSD may, on its own, review an order for modification. A child support order is modifiable at any time by either party.
•  It is always better to consult an attorney for a judicial modification rather than going to the FSD for an administrative modification. The court has power over the FSD and can modify any administrative or judicial order much more quickly, and can issue temporary orders for relief.
•  Once a judicial motion to modify is filed, even if the obligor stops paying child support or reduces the amount paid, the party will avoid contempt charges and administrative enforcement issues, and the Court can sort out what the new child support amount should be and adjust it accordingly back to the date the motion was filed. This may result in some child support arrearages, but nowhere near what there could be without the modification on file. At this stage of the game, damage control is crucial.
• The modification action can result in attorney fees and case costs, but those typically are minimal in comparison to the savings in child support, and are almost always a wise investment.
• Care should always be taken, however, before engaging in a child support modification, and it is not a good idea to do so without consulting an attorney. Modification cases can be full of possible land mines, so care and experience are required to keep a bad situation from getting worse.

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In a recent decision by the Supreme Court of Missouri, the Court held that a spouses contribution to otherwise separate property creates a marital interest that can be divided by the Court.  In Missouri, property that was owned prior to the marriage is generally considered to be separate, non-marital property.  Separate property is awarded to the spouse who owns the property, and marital property is divided by the court in some ratio, very commonly 50/50.  There are exceptions to this rule of course, including, but not limited to, source of funds, transmutation, and marital contributions.

In the recent decision, one spouse owned a business with a value of $20,000 at the time of the marriage, and during the course of the marriage the value of the business increased to around $500,000.  The other spouse never had legal title or a legal interest in the business, but made contributions to the business, including reducing a substantial amount of debt, acting as a guarantor and corporate officer, conducting all bookkeeping and corporate banking, managing the office, introducing new products, making capital improvements, and working as an employee. 

The trial court found that these contributions created a marital interest in the property, and the Supreme Court agreed and affirmed the equal division of the equity in the business under the rationale that marital labor, effort, or services result in a marital interest in the increased value of a spouse's separate property if there is proof of: (1) a contribution of substantial services; (2) a direct correlation between those services and the increase in value; (3) the amount of the increase in value; (4) performance of the services during the marriage; and (5) the value of the services, the lack of compensation, or inadequate compensation. 

The court found that all these requirements were met and upheld the decision of the trial court.  The full opinion can be read here.

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Generally, in Missouri child support terminates when a child dies, marries, enters the military, becomes self supporting, or turns 18. However, child support can continue after age 18, and all the way to age 21, if the following requirements are met:

If the child is enrolled in and attending high school when he or she turns 18, then child support will continue through the completion of the high school program or age 21, whichever first occurs.

If the child is enrolls in an institution of vocational or higher education (college) by October 1 following graduation from high school (or completion of a GED program), the obligation for child support can continue until the child completes the program or turns 21, whichever occurs first. However, the child must enroll for and complete (pass) at least twelve hours of credit each semester, not including the summer semester, and achieve grades sufficient to re enroll.  The credit hour requirement is reduced to 9 if the child is employed and working at least 15 hours per week.

To remain eligible for continued child support, at the beginning of each semester the child must submit to each parent a transcript which includes the courses enrolled in and completed for each term, the grades and credits received for each such course, and an official document from the institution listing the courses which the child is enrolled in for the upcoming term and the number of credits for each such course. If the child fails to comply with this requirement, the paying parent can motion the court for an abatement (temporary termination) for the particular semester. However, if the non-custodial parent makes a formal request for the required documents, the child must produce them within 30 days or the child support can be permanently terminated.  Also, either parent or the child can ask the court for support to be paid directly to the child.

Under the law, an "institution of vocational education" means any post-secondary training or schooling for which the student is assessed a fee and attends classes regularly. "Higher education" means any community college, college, or university at which the child attends classes regularly.

Note that a modification or termination of child support under any of the above scenarios is not automatic, and the parent wishing to modify or terminate must do so by filing a motion with the Court.

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As a practicing family and bankruptcy attorney, I consistently run into cases where people are dealing with both a divorce (or other family law related matter), as well as a bankruptcy.  This is because, many times, one is the cause of the other (this works both ways), and the cases often go hand in hand. That is probably no surprise considering the current economic climate, and if this applies to you, believe me, you are far from alone. Check out the numbers:  

Bankruptcy filings in the federal courts rose 31.9 percent in calendar year 2009, according to data released by the Administrative Office of the U.S. Courts. The number of bankruptcies filed in the twelve-month period ending December 31, 2009, totaled 1,473,675, up from 1,117,641 bankruptcies filed in 2008.

Filings have grown steadily since 2006, when bankruptcy filings totaled 617,660, in the first full 12-month period after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) took effect. An historic high in the number of bankruptcy filings was seen in 2005, when over 2 million bankruptcies were filed just before BAPCPA took effect.

Filings by Chapter
In 2009, filings rose under Chapters 7, 11, 12 and 13 of the U.S. bankruptcy code.

·       Chapter 7 filings totaled 1,050,832 up 41 percent from the 744,364, Chapter 7 filings reported in 2008.

·       Chapter 11 filings rose 50 percent to 15,189, up from the 10,147 filings in 2008.

·       Chapter 13 filings were 406,962, up 12 percent from the 362,705 filings in 2008.

·       Chapter 12 filings totaled 544, up 58 percent in 2009, compared to 345 Chapter 12 bankruptcy filings in CY 2008.

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In a recent termination of parental rights case, the Court stated that statutory grounds of abandonment, neglect, and unfitness require clear, cogent, and convincing evidence. The Incarcerated parent’s diligent efforts at maintaining contact with child refuted such allegations. The “Child may suffer from Father’s absence, but getting in trouble before he knew about Child is no proof that Father now wants no relationship with her.” Failure to send money from 28¢ per day wages was de minimis. Incarceration does not raise the presumption of unfitness. The child’s best interests require only preponderance of evidence, but the issue never arises until statutory grounds are established. 

The entire opinion can be read here.

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I can’t think of how many times that I have had a client tell me, regardless of what the issue is that is in dispute, that the opposing party is “just worried about money” or that it is “all about the money” for him or her, and that is their sole motivation in the case. Or maybe it is the other way around. My usual response is “isn’t it always?” There are so many financial aspects of divorce that have to be balanced that if parties aren’t careful, they can end up in a big money mess. Here are a few of the big ones:

1.       2 households instead of one: Before a couple or family divorces, they live in one residence with one set of bills and expenses, paid by however much money the couple/parents bring in. Upon divorce, the same level of income still exists, but now there are two mortgages/rent, two sets of utilities, two sets of grocery bills, two car payments, relocation expenses, first and last month’s rent, and so on. Basically, double or so the expenses on the same income.  It is not hard to see how difficult this is in and of itself.

2.       Debts. These days, many families are just a paycheck or two away from real trouble with credit cards and other unsecured debts, and if there are significant debts involved in the divorce, a real challenge exists. Sure the court can divide the debts and assign liability to each spouse, but it doesn’t do much good if the net marital estate is significantly reduced or eliminated by the debt. A divorce is a separation of financial livelihoods, and when possible, it is a good idea to use assets in the marital estate to reduce or eliminate debt before dividing assets. The less debt after the divorce the better for both parties, even if on paper one spouse is supposed to be responsible for it. It is a future fight or bankruptcy filing waiting to happen.

3.       Child Support: Quite simply, nobody is happy with it. If you have to pay it, it is going to be perceived to be too much, and if you are receiving it, it is perceived to not be enough.  In Missouri child support is largely a mathematical calculation based on incomes and other expenses, and to some degree it is what it is.   But regardless, it another factor affecting the same level of income pre-divorce, and it will never make a party “whole” or maintain a pre-divorce standard of living.

4.       Maintenance: Although there is no mathematical formula the same holds true as does for child support, it is probably both too much and not enough,  and it is still going to have to come out of the same pot of money.  Unless the parties are very well off financially to begin with, to expect the same standard of living pre-divorce is usually unrealistic. Although appropriate in some cases of long marriage, large disparities in income, or other factors, maintenance in Missouri is awarded in a small percentage of cases.

5.       Health Insurance: Regardless of your politics on the issue, health insurance is expensive and upon divorce usually a former spouse cannot remain on the other spouse’s health insurance. So, unless both parties can get affordable health insurance, if such a thing exists, then this can be a big financial factor that likely may only have a handful of undesirable solutions.

6.       Attorney fees and case costs: On top of all of this, the divorce is a direct expense in terms of attorney fees and costs associated with the case. If the case is contested, then the total cost on the family is the sum of both spouses total investment in the case. Attorney fees are not usually awarded, which is all the more reason to try to approach the case in an informed and rational way, and try to keep costs and conflict down. The higher the conflict, the higher the cost every single time.

There are of course, other issues particular to certain cases, but regardless of how extensive the list may be, the bottom line is that divorcing spouses need to be smart and rational about how to separate financially and view their situation in a realistic way. Otherwise,  financial disaster in one form or another, certainly awaits.

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With so many people facing bankruptcy in the current climate, it may be good news to know (depending on which side you are on, of course) that the bankruptcy does not allow a person owing a domestic support obligation to use bankruptcy as a way to avoid payment of the debt. In fact, virtually any obligation that is domestic in nature cannot be discharged in bankruptcy. Here are a few facts:

• A domestic support obligation is not dischargeable in a Chapter 7 or Chapter 13 consumer bankruptcy proceeding. 
• “Domestic Support Obligation” is a debt that is owed to or recoverable by a spouse, ex-spouse, or child of the debtor or their guardian or representative, or a governmental unit (such as the Children’s division or the Court). This includes alimony, maintenance, child support, state assistance, even if the debt is not titled exactly in that manner. Also included is a debt arising out of a separation agreement, divorce decree, or property settlement agreement.
• Also non-dischargeable in a Chapter 7 is any debt to a spouse, former spouse, or child not described above that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree, or other order of a court of record. Any debt that falling under this section may be dischargeable in a Chapter 13 debt adjustment, however.
• Domestic Support Obligations receive the number 1 priority for repayment in a Chapter 13 plan or when funds are available in a Chapter 7 bankruptcy estate.
• To summarize, if it is domestic in nature, it is going to have to be paid. This includes not only child support or maintenance, but also property and debt divisions, such as: marital estate equalization payments, payments in settlement, qualified domestic relations orders, contempt payments, divisions of debts, vehicle debts, mortgages, credit cards, lines of credit, personal loans, medical insurance, costs for non-covered medical care, retirement plan divisions, military retirement divisions, attorney fee awards, and the kitchen sink.
• No special language is necessary in the divorce settlement or decree to make these provisions apply, although it may be a good idea just to drive the point home.

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For the purposes of calculating child support in Missouri, the Form 14 calculation is used.  The starting point is the Gross Income of the parties.  So, what does that include and what exactly does it mean?  The following is a summary of the official comments and relatively recent court rulings on the definition.

“Gross income" includes, but is not limited to, salaries, wages, commissions, dividends, severance pay, pensions, interest, trust income, annuities, partnership distributions, social security benefits, retirement benefits, workers' compensation benefits, unemployment compensation benefits, disability insurance benefits, veterans' disability benefits, and military allowances for subsistence and quarters.

Overtime compensation, bonuses, earnings from secondary employment, recurring capital gains, prizes, retained earnings and significant employment-related benefits maybe included, in whole or in part, in "gross income" in appropriate circumstances.

Excluded from "gross income" is temporary assistance for needy families (TANF) payments, Medicaid benefits, supplemental security income (SSI) benefits, food stamps, general assistance benefits, other public assistance benefits having eligibility based on income, and child support received for children not the subject of this proceeding.

If a parent receives rents or royalties or is self-employed, in a sole proprietorship, or business with joint ownership, "gross income" is gross receipts minus the ordinary and necessary expenses incurred to produce such receipts.  

"Income" for purposes of computing the presumed child support amount consists of a financial benefit or money received by a parent that could have a positive impact on the parent's ability to support the parent's children.

Overtime Compensation

When determining whether to include overtime compensation, the Court must consider (1) Periods of temporary child custody, (2) The motivation of the parent working the overtime over the last three years. (3) The amount of the overtime. (4) The expectation that the overtime will continue, (5) additional dependents.

Overtime may be included in a parent’s yearly gross income in appropriate circumstances.  The Court must consider all relevant factors, including the realistic expectation that a parent who receives a bonus or overtime will continue to do so.  The court can ignore income history and look at a single year's income figure if it finds that figure to be the most accurate predictor of a parent’s income

Bonus and Significant Employment Related Benefits:

The same 5 factors listed above apply to bonus income. Additionally:

Bonuses are discretionary, and the court may accept or reject the reliability and pattern of bonus income. 

Expense reimbursements should not be included in monthly gross income on Form 14 because such reimbursements are a repayment or indemnification, which is compensation for loss or damage, as opposed to a benefit, which is profit or gain.

Next Installment:  Imputed income

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Under a federal law called the Uniformed Services Former Spouse Protection Act (USFSPA for short), Missouri courts are empowered to divide a service members disposable retired pay in the same manner as property.  Since disposable retired pay is a federal government entitlement and not a pension plan, the rules under ERISA do not apply,  and the entitlement does not require a Qualified Relations Domestic Order.  However, certain restrictions and requirements do apply for a spouse to receive a portion of the retired pay.

In all cases where a member is on active duty at the time of divorce, the member's rights under the Soldiers and Sailors Civil Relief Act must be observed.  Also, a member must be married for 10 years during which the member performed at least 10 years of creditable military service.  This is called the10/10 rule.  It is important to note, however, that a service member is not even eligible to receive disposable retired pay unless he or she has served for at least 20 years.  A spouse or former spouse cannot receive something that the service member is not entitled to receive.

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