Determining Child Support in Washington

 
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Determining Child Support in Washington
Written By: Josh Lowell ~ 11/28/2022

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In Washington, child support is mandatory. No matter how amicable the parties, how old the children, or the disparity in income, every divorce with children must include a Child Support Order. While Spousal Maintenance (Alimony) may be more of an art based on vague factors and general discretion, child support is a science based on calculations and spreadsheets.

Determining Income to Determine Child Support

The net income of each party is the most important factor to consider while determining child support. The first step is to establish each party’s net income. Once you have this vital information, the remaining steps are laid out with more specificity. Washington’s legislature passed RCW 26.19.071 to provide guidance in this regard. Courts require each parent to fully disclose all income and will consider most income-sources including most commonly: salary, wages, commissions, deferred compensation, restricted stock units, bonuses, capital gains, dividends, unemployment and workers compensation benefits, social security, etc. A few sources including gifts, child support, prizes, disability benefits, are not included.

Reviewing pay stubs, W2s, 1099s, and tax returns are the best place to start for determining income. The Courts will often average out income as best as possible while reducing annual net income by up to $5,000 for voluntary retirement contributions. Once income tax, FICA, and state taxes are removed, the net income is calculated.

Using the Economic Support Table

Once the parties agree on net income, the figures are compared to RCW 26.19.020, which provides the Child Support Economic Support Table. Essentially, you add up both net incomes and compare that to the number of children between the parties. This creates the total child support payment owed between both parents. This figure is then prorated based on the net incomes of the parties creating the child support transfer payment for each.

Who pays child support?

If a parent maintains primary custody over the children, it is likely they will be paid child support by the other parent using the support transfer payment determined through the support table’s proration. Here’s where the Courts have a bit of discretion. At the request of one or both parties, the Court may choose to deviate from this standard payment. The most common reason to deviate is because the parents share substantial custody of the children. In this case, neither parent will often be responsible for child support. Other common reasons include extraordinary income, debts, or needs of one party, substantial income from a child of the parties, special medical, educational, or psychological needs of the child, or unusual costs to be incurred.

Calculating Final Child Support

Given the support provided by Washington state in determining income the child support figures seem simple to determine, but unfortunately, that is not the case. There are many small caveats and exceptions to each rule that require experience or knowledge to properly interpret. The experienced family law attorneys at the law offices of Magnuson Lowell PS are ready to answer your questions about child support. Call today for a free case evaluation.


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Powers of Attorney - Quick, Simple, Important
Written By: Josh Lowell ~ 11/21/2022

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Estate Planning is an all-compassing term that includes the preparation of documents and strategies to manage your life and help your loved ones in the event of your death or incapacity. The Power of Attorney is a well-known and often used document that rivals the Last Will and Testament as the most critical part of the estate plan. While the will handles what happens in the event of your death, the Power of Attorney helps manage your life in the event of incapacity while you are alive.

Why are Powers of Attorney so important?

Estate Planning documents, including the POA, are like insurance. You pay a premium – in this case the cost of producing the documents with an attorney – to ensure that your loved ones are protected in the event something happens to you. The Power of Attorney outlines what should happen to you if you become incapacitated and cannot make decisions on your own behalf while you’re alive. This includes decision-making for your healthcare and regarding your property and finances.

If you start suffering from dementia or enter into a coma, etc. your life still moves forward. Your bills need to be paid. Investments need to be managed. Properties may need to be sold. Medical treatment needs to be authorized. If you can’t speak for yourself, who is going to make those decisions on your behalf. The Power of Attorney nominates a primary attorney-in-fact to make those decisions and manage your accounts. You can choose more than once or choose subsequent back-up attorneys-in-fact to protect yourself in the future.

Without a Power of Attorney in place, your family will not be able to access financial accounts in your name or help pay bills. They may struggle to deal with your medical care with HIPAA providing both protections and barriers in these instances. Without proper Estate Planning, your loved ones would be forced to file for a guardianship to ask the Court for these protections. The cost of a guardianship and the time involved is far greater than just preparing a Power of Attorney before it is needed.

Working with an attorney to prepare your Estate Planning is simple. The Power of Attorney especially does not require substantial time or effort to ensure you are properly protected. At a minimum, knowing who you would want to be your attorney-in-fact, your decision-maker, in the event of incapacity is necessary. This is most often your spouse or domestic partner followed by adult children, siblings, or even long-term friends or neighbors that can be trusted.

At the law offices of Magnuson Lowell, PS, we are able to quickly and efficiently consult with our clients to help determine if a general durable power of attorney and healthcare power of attorney are appropriate. Our experienced team will answer questions and ensure you understand these important decisions. Finally, the attorneys at Magnuson Lowell PS, will quickly set your appointments to move these issues forward, so they do not linger longer than necessary. Call today for a free case evaluation.


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Dividing a Business During a Divorce
Written By: Josh Lowell ~ 11/14/2022

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Owning a small business can be exciting, profitable, and stressful. Just like a car, stock account, or couch, however, a business created during a marriage is typically considered a community asset all the same. In the event of divorce, a business owned by one (or both) spouses should be disbursed equitably amongst the remaining community assets. How do the Courts look to divide small businesses in a divorce?

Assuming the business is a community asset, it should be dealt with like all community assets. The Courts will seek to divide the property fairly and equitably. Most of the time, that means distributed the assets and debts equally amongst the parties. The 50-50 split can be different depending on the circumstances of the parties, but only in unusual or rare situations.

The first question before dividing a business is valuing the business. While not exhaustive, here are several different aspects that the Court will look to while dividing a business:

  • Checking and savings
  • Business investments
  • Real estate
  • Vehicles and equipment
  • Accounts receivable and pending contracts
  • Goodwill

A forensic CPA may be involved to help determine the true value of your business. While costly, a Court will often require this type of approach if the parties cannot agree on the reasonable value of the asset. The accountant will review important documents like Profit and Loss reports, cash flow ledgers, inventory lists, tax returns, and bookkeeping files to establish their estimated valuation. The parties may even jointly retain a CPA to reach an agreed value without dispute. A CPA may also project a businesses income as part of their analysis. This income approach can be favorable to understand the true value of the asset but can be more complicated than a simple review of the assets.

In the end, a distinct and complicated financial analysis can be expensive, but it may be the only way for the parties to agree on a business’ value. If hiring a CPA can avoid substantial litigation or trial, then that cost may be worth incurring. Your legal team can help ensure your questions are answered about forensic accounting. Knowing whether it’s worth it to fight about business value or seek an informal agreement takes understanding the pros and cons to divorce lawsuits.

If you own your own business or are married to an entrepreneur, you must understand your rights and obligations as part of a divorce. Without proper counsel, you may be allowing your significant other the opportunity to take advantage of the business for their benefit. The experienced litigators at the law offices of Magnuson Lowell PS are ready and willing to help you fight for your rights. Call today for a free case evaluation.


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