Spousal support, also known as alimony, helps a lower-earning spouse maintain financial stability after a divorce. However, spousal support can become more complex when one or both spouses are self-employed.
Self-employment can make it harder to determine true income, which is a key factor in support decisions. Understanding how courts evaluate income will help you know what to expect when planning alimony arrangements.
How do courts determine spousal support?
California courts look closely at each spouse’s incomes, assets and earning abilities. When a spouse is self-employed, reported income may not tell the full story. For example, a business owner might deduct expenses from income that also provide personal benefits. Judges will often examine bank statements, tax returns, profit and loss statements or business records to get a clearer picture of actual earnings.
Courts also consider the stability of self-employment income. A person who earns a steady income from a long-running business may receive different treatment than someone with seasonal or inconsistent earnings. Judges want to know if the self-employed spouse has the ability to pay support and if the supported spouse has a financial need.
A self-employed spouse may face scrutiny if income appears artificially low. For example, reporting a loss while continuing to live a high-cost lifestyle may raise questions. Courts in California want to ensure that support decisions reflect reality, not just what appears on paper.
What options should you consider as a self-employed spouse?
California law allows either spouse to request temporary or long-term spousal support. Temporary support helps during the divorce process, while long-term support may continue for months or years afterward. The court will set the amount based on several factors, including the length of the marriage, the standard of living during the marriage and each spouse’s earning capacity.
If income changes after the court sets the support order, either party can request a modification. This often happens when business earnings rise or fall. The court will need evidence of the change before making adjustments.
In self-employment cases, clear and accurate financial records matter. The court needs those records to make fair decisions about spousal support. A self-employed person should prepare to show full and honest documentation when support becomes part of the divorce process. This ensures that the court bases its decision on facts rather than estimates or assumptions.
