Pursuing Alimony in Maryland as the Spouse of a Small Business Owner

As a spouse going through a divorce in Maryland, you may face many challenges, including concerning alimony and a monetary award. This challenge can become particularly complicated if your spouse is the owner of a small business, especially one that pays for a substantial chunk of his/her personal expenses. Whatever challenges you’re facing in your divorce, you can enhance your odds of getting a fair and appropriate alimony award by retaining an experienced Maryland divorce lawyer.

Skilled counsel can help you persuade the court to look at more than just your spouse’s W2 income when it comes to setting an alimony amount. Take, for example, this recent divorce case from Montgomery County.

The wife filed for divorce in 2021. At trial, the wife asked the court to award her alimony, so the court made findings regarding the spouses’ earning capacity and income.

When determining the husband’s income, the trial judge stated that “a large majority of [Husband’s] personal expenses such as dining out, golf, groceries, gas, health insurance ($600/ month)… and a myriad of other expenses [were] run through the business.” For that reason, the court included in the husband’s overall income “50% of the meal expenses listed on his tax returns in addition to his officer compensation and the ordinary business income.”

After doing that analysis, the court arrived at an income figure of $111,000. Using that number, the court awarded the wife 24 months of rehabilitative alimony at $2,500 per month in addition to 18 months of retroactive alimony at $2,500 per month.

The Importance of ‘Equitably Sound’ Outcomes

The husband’s appeal contested the inclusion of the meal expenses from his tax return, but the appeals court upheld what the trial judge ordered. The husband’s unsuccessful argument contended that “income” for the purposes of alimony calculation only includes “wages or salary from regular, full-time employment, i.e., money earned during the normal work week as is appropriate to a given occupation.”

The court disagreed, stating that Maryland Family Law requires that trial courts factor in all income and assets when determining alimony. In this case, because the husband was the sole owner of a roofing business and “readily mingled the finances of this business… with his personal expenses,” the trial judge could not “look simply at wage statements.” The husband incurred substantial personal expenses while dining out and ran those expenses through his roofing company. Given that the goal of Family Law Section 11-106 was “to create a statutory mechanism leading to equitably sound alimony determinations by judges,” including this income was only fair, as a failure to consider it would give this husband “a huge advantage over [spouses] who earn the same amount but receive the money as part of their base salary.”

Alimony cases are intensely fact-driven matters in which the trial court has broad discretion. For these reasons, you want to be certain that the trial judge deciding your case has everything he/she needs to make an appropriate alimony award. The knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC are here to help our clients do exactly that in their cases. Contact us today at 301-519-2801 or via our online form to schedule your consultation.

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