Severance Pay After Ostler & Smith Orders

The definition of income and when support should be paid can become convoluted. The basic issue in In Re Marriage of Samson was whether severance pay was payable in one month or over a year.

FACTUAL BACKGROUND OF THE MODIFICATION OF SUPPORT

The parties were divorced. In their marital agreement they agreed that any compensation in excess of $25,000 per month to the ex-husband would require a payment of 35 percent to the ex-wife. The ex-husband was laid off from his job. He received severance pay from his employer. The severance pay consisted of a year’s salary, a lump sum in lieu of commission, a healthcare component, and a master retirement plan component. After the ex-husband received his net pay, he filed a motion to ask the family court to treat his severance pay as income over a year rather than income in excess of $25,000 for one month.

FAMILY LAW PROCEEDINGS

The ex-wife argued that the lump sum payment should be payable as a lump sum payment in one month. She argued that the ex-husband could not retroactively modify support, and his filing of the request would result in a retroactive application of support. The family law judge agreed with the ex-wife and ordered the ex-husband to pay support based upon the agreement made by the parties. The ex-husband appealed.

APPEAL OF THE MODIFICATION ORDER

The appellate court reversed. It reasoned that this is an Ostler & Smith type order, and Ostler & Smith orders are based on bonus income that fluctuates and is not guaranteed. It held that at the time of entering into the agreement, neither party knew that the ex-husband would receive a lump-sum payment. Therefore, the severance pay would not be subject to an Ostler & Smith type order

DO YOU NEED HELP WITH ISSUES RELATED TO MODIFICATION OF SUPPORT?

If you need legal advice and are looking for a family law lawyer in Orange County to address a dissolution issue such as modification of support or any other divorce matter such as legal separation, annulment, custody, spousal support, child support and/or property division, please consider Treviño Law in your divorce attorney search. We are located in Laguna Hills right off Lake Forest exit to both the 405 and 5 freeway.

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Treviño Law, Inc.
23151 Moulton Parkway
Laguna Hills, California
Phone (949) 716-2102
Visit us at
www.LawintheOC.com

Although the posting of this information can be considered free legal advice for a divorce in Orange County, it does not guarantee that there are other facts which may play a significant part in a dissolution. Circumstances in a divorce case may alter the required action and analysis taken by a family law attorney in California.

Please note that this legal advice does not establish a family law attorney-client relationship. This is a legal advertisement for Treviño Law, Inc.
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