2. What happens if my spouse reduces his income and increases his business expenses prior to separation?
If a spouse who owns or controls a business reduces income, delays invoices, increases expenses,
pays excessive management fees, retains income in the corporation, or shifts revenue to another
entity before separation, the issue may affect both:
1. support, because income may be imputed or adjusted; and
2. property equalization, because the value of the business and retained corporate assets
may be relevant.
A business interest may require a professional valuation, and disputes about true income may
require an income determination report or forensic accounting. In family litigation, orders may
be sought for business valuation reports, income determination reports, forensic accounting,
corporate records, bank records, and related financial disclosure where corporate income or asset
values are disputed.
The court may examine whether expenses are legitimate business expenses or whether they are
personal expenses, inflated expenses, non-recurring deductions, shareholder benefits, or income
diversion.
