Saturday, February 17, 2007

Exchanging Income Information - a proposed best practice

Many years ago I made a motion at a Final Hearing that the parties be ordered to exchange income information at least yearly when tax returns were filed. The Commissioner hearing the case looked at me as if I were speaking in tongues and denied the motion.

Since then, I incorporated this idea into my uncontested property settlement agreements. I also found more success with younger lawyers agreeing to this type of provision.

Looking back, I have came to two conclusions about my rejection. The charitable one is that the Commissioner confused the idea of exchanging income information with an automatic increase in child support. Case law forbids automatic increases of child support. Automatic increases violate due process because they omit the ability of the payor to have his/her day in court.

With the increasing numbers of people online and with Indiana's Child Support Calculator online, people can review their child support obligations on their own. They lack accurate information to perform these calculations. Exchanging income information whenever either party changes employment and when filing tax returns provides the clients with the accurate information necessary to perform an accurate child support calculation.

Currently, a client comes to me about a support modification and has a suspicion that support ought to change. They pay me to prepare a Petition to Modify Support, prepare discovery, respond to the other side's discovery, calculate child support, and go to a hearing. In essence, they have to bid into the pot before they know if they have anything to modify. One case I had in recent years showed a ten dollar increase in support after a ten year hiatus. I was very unhappy that the client had to pay what she did to find out she got almost nothing but we had no alternative. In support modification cases the major cost lies in discovery.

My modest proposal should eliminate a major cost in support modification cases. In turn, it ought to let us weed out the cases where modification is not yet ripe. Which might mean judges less annoyed with cases that ought not to have been filed and clients less disappointed when an anticipated increase disappears in the face of the facts. On the hand, it would mean less discovery and smaller fees for us lawyers. Which lead to my other, more uncharitable conclusion about that long ago decision.

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