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How Earning Capacity is Imputed will Affect your Divorce Settlement

If you lose your job or are looking to go back into the workforce while going through a divorce your earning capacity will be evaluated and imputed based on what is learned about your earning potential.

In this video, Anthony Karls sits down with Sterling Lawyers' Managing Attorney Holly Mullin and discusses your options. They also discuss how a fair result will be calculated. The newly imputed, or assigned, earning capacity, or income one should earn, will affect the amount of child support and maintenance or alimony that one would be required to pay.

What happens when your earning capacity changes due to loss or required change of job? How is your earning capacity determined, if you are looking to return to the workforce after years of not having a source of income?

There will be an expectation that people are self-supported when possible. What will it take to get you or your soon to be ex-spouse back up to their earning expectations? If there are minor children at home, likely there will be a cost to benefit analysis. What will it cost to put children in daycare versus what can be earned by returning to the workforce?

Other questions that must be addressed: What is cost-effective for the family? What is in the best interest of the children? What does the individual going through a career change want to do and what can they do to move forward? And how much time will it take for them to reach these goals?

Sometimes this analysis will be a conversation or negotiation between the parties. Often this will require that a vocational expert is brought in to evaluate the options for the individual that will be going through career changes. This step will allow an earning capacity to be assigned or imputed. The earning capacity will affect the amount of child support and, or maintenance or alimony in some states that will be paid by the individual.

In summary, it is important to have an attorney while going through this process. There will always be an expectation that each party is self-supported when possible.

Case Law Friday is a Sterling series focused on communicating in layman's terms cases of precedent, statutes that guide decisions, and court procedures important to getting results in family law.

We hope these deep-dive conversations create clarity, enabling you to better understand the rules that govern how decisions get made in family court.

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