California is a state full of performers, athletes, and others with unusual employment. Actors and musicians, in particular, have uneven incomes. If you’re a performer, you may make a large amount of income for contracts on an irregular basis. For example, Hollywood actors can make millions for a movie but only make one or two movies a year.
That uneven income is part of the industry, but it’s not always easy, financially. It gets even more complicated if something happens to change the performer’s financial outlook. For performers going through a divorce, for instance, the uneven nature of their income makes considerations like alimony much more complex.
Things get even more complicated for performers who have been active for years. Many actors and musicians have been earning money in their industries since they were minors. This can leave performers with significant assets that aren’t necessarily income. However, they still benefit from them every day.
So how does alimony get decided for performers? That depends a lot on how they structure their finances. Here’s what you need to know about how alimony is determined for people with uneven income and their partners and how to manage your assets as a performer to make your divorce go more smoothly.
How Alimony Is Determined in California
Alimony, or spousal support, is a type of financial support California has determined some spouses should receive after a divorce. It’s intended to help lower-earning partners support themselves after their split from the higher-earning person. Alimony isn’t awarded in every divorce, but it’s common in separations where one party earns significantly more on average than the other.
Courts determine the amount and length of alimony payments by considering many factors, such as:
- The length of the marriage
- The lower-earning partner’s responsibilities in the relationship
- Sacrifices made by the lower-earning partner
- The financial needs of both parties
- The financial resources of both parties
The last factor is the one that includes income and property. Both partners’ separate assets will be considered by the court as financial resources they can use to support themselves, along with the marital property they will receive after their split.
Meanwhile, when you don’t have a regular income, it’s harder for a judge to accurately determine your future financial resources. The judge will need to choose a method to compare earnings between the two partners. This is usually accomplished in one of two ways:
- Averaging out past income: If someone receives semi-regular large lump sums, judges may average that out. Instead of comparing monthly income between spouses, for example, the judge may look at the annual average income for each partner. This provides a more accurate understanding of how the financial situation of someone with a salary compares to someone who’s paid on a contract basis.
- Considering current assets: If someone doesn’t receive regular contracts, judges will still consider their existing resources. If a performer has a significant nest egg of separate assets, that will be taken into account. A spouse with a regular income won’t automatically have to pay alimony to their ex-partner if they have trust funds or investments that can support them at a similar quality of life.
Spousal support is easiest to determine after the couple’s assets have been divided. That’s why it’s valuable to understand whether or not your assets are separate.
What Are Separate Assets?
Separate assets are possesions that one partner owns alone, without the other having a claim. Unless there’s a prenuptial agreement in place, anything you own before you get married is considered separate. This includes things like investments, past income, homes, and vehicles.
However, this can change. In some cases, courts will determine that assets have been “commingled” during a marriage. In this case, even if you earned an asset well before you got married, it can still be considered during divorce proceedings for things like property division or alimony.
Assets are considered commingled if they have been combined with marital property. Examples of commingling include:
- Pre-marital funds added to a shared bank account
- Inheritances added to a shared account
- Property bought with both separate and marital assets
- Homes purchased with separate funds but lived in by both parties
- Cars used by both parties
Keeping and Proving Separate Assets
As you can see, assets can be considered commingled just by using them normally. If you’re concerned about your or your spouse’s separate property affecting alimony payments, you need to be careful. Here’s how you can keep your property truly separate and prove it during your divorce.
Use a prenuptial agreement
The simplest way to keep assets separate and figure out alimony in advance is to set up a prenuptial agreement before you get married. A prenuptial agreement can cover many different topics, spousal support and property included. You can use the agreement to clarify whether either party expects alimony and which assets should remain separate after marriage.
Implement a post-nuptial agreement
If you’re already married, then it’s too late to get a prenuptialagreement. However, you can get a similar contract, known as a post-nuptial agreement. A well-written post-nuptial agreement can cover all the same topics as a prenuptial agreement, down to whether either person cedes their right to spousal support.
Don’t share assets
When it comes to money , the best way to keep assets truly separate is to keep them in specific, unshared accounts. Ideally, keep these funds in the accounts you had before marriage, and open new accounts for anything you’ll share with your spouse. For anything that can’t be kept in an account, avoid sharing them with your spouse. Sharing them with your partner makes them a regular part of your marriage, which will lead most judges to consider them “commingled” unless there’s a specific contract in place stating otherwise.
Spousal Support for Performers and Partners Can Be Easy
There’s a lot that goes into the spousal support determination process. Whether you’re a performer or you’re considering a divorce from a performer, the assets involved will play a major role in if and how much alimony is ordered. You can make your divorce and alimony process flow more smoothly by working with an experienced divorce attorney. Schedule your consultation today to learn how to streamline the alimony process and keep the assets you care about.