Can my ex sue my company for child support?

Anonymous Asked:

I have an incorporated company in which I have saved money over the years for my retirement. The company pays me $40 000 per year as I am now on early retirement. My ex says that even though I get only $40 000 a year from the company there is a lot more in the company and I need to pay more child support because of that. Can my ex somehow force me to pay child support based on the total investments my company owns? The money in my company is all I have to live off for the rest of my years.

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Andrew Heft

11 years ago

If you are sole owner of your company then it will be expected that some of the yearly retained earnings of the company be declared revenue for yourself. If the retained earnings are there for purposes foreign to the development or survival of the company then they technically shouldn’t be there and should be distributed to the shareholder.

You mention that you leave the money there as savings for your retirement. It is perfectly legal to do so and there is an obvious tax advantage to doing so also. Contrary to tax authorities however, your obligation towards the child will most likely cease before you reach retirement.

When it comes to child support, maintaining unjustified amounts of retained earnings is considered a way to defer revenue and reduce support which is unfair to the child insofar as the child’s needs are in the immediate.

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