Attorney
It’s been said that numbers don’t lie. And in a narrow sense, that’s true. A number is a number. But anyone who has ever run a business knows that different numbers tell very different stories. Net income on a tax return is not the same as cash in the bank. Owner distributions are not the same as salary. A down year followed by a strong one doesn’t average out the way a calculator suggests.
This becomes a problem when Albuquerque area business owners — sole proprietors, partners, physicians with their own practices, entrepreneurs with complex equity structures — file for divorce. Family law in New Mexico was written with W-2 employees in mind. Couples with irregular income have to jump through a few extra hoops to make sure each partner walks away on equal footing. This is especially true if one partner will be making spousal or child support payments.
Thanks to his business background, Bob Matteucci is well-suited to helping divorcees with these calculations. For much of his life he was the one putting financial statements together, so he understands them a lot better than a lawyer who saw their first one during discovery. That distinction matters when your case turns on what the numbers say versus what they mean.
The System’s Blind Spot
New Mexico divorce law requires courts to determine income for purposes of calculating spousal support and child support. The statutes define income broadly and include self-employment income, business revenue, and distributions. But the statutes cannot tell attorneys or judges how to read a Schedule C, how to evaluate whether an owner’s salary reflects actual earning capacity, or how to distinguish a genuine business loss from a paper one.
That interpretive gap is where business owner divorces get complicated. Numbers don’t lie, but financial documents can tell a very different story depending on how well the person reading them understands what they are seeing. Depreciation, retained earnings, personal expenses run through the business, deferred compensation, one-time revenue events — each of these can shift the income calculation meaningfully.
Your attorney needs to know what the numbers actually mean, especially if you are asking for or paying spousal support (aka alimony) or child support.
Calculating Spousal Support Under New Mexico Law
New Mexico courts consider a range of factors when determining if spousal support (often called alimony) is appropriate, and if so, how much should be paid. Judges look at each spouse’s current and future earning capacity, the length of the marriage, and the standard of living established during the marriage. For business owners, “earning capacity” is the operative phrase, and it’s rarely answered by a single tax return.
A business owner who had a difficult year, reduced their own salary to reinvest in the company, or structured compensation to minimize taxable income may show reported income that bears little resemblance to their actual financial capacity. Courts are aware of this dynamic. The analysis often goes beyond the return to look at cash flow, lifestyle, and the couple’s finances over several years.
This can be further complicated by the fact that many high-net-worth couples in the Albuquerque area use spousal support as a way to balance the scale when dividing their marital estate 50/50. When there are certain assets whose value is hard to split in half up front (think businesses, retirement accounts, a real estate portfolio) allowing one partner to retain full ownership while making spousal support payments to the other is often necessary.
Bob knows how important it is to look at the big picture when calculating income is not straightforward.
When the Child Support Worksheet Doesn’t Work Well
The vast majority of parents in the Albuquerque area calculate their child support obligations using New Mexico’s statutory guidelines and accompanying worksheets. The guidelines are supposed to make things simple by applying a standardized formula based on objective factors.
This system works really well for W-2 employees, but business owners with variable income often complain that the worksheets fail to paint an accurate picture of their family’s finances. Once again, this is due to the nature of business ownership and financial choices that are made for tax purposes or the health of the business.
While deviation from the worksheets is rare, it is often necessary in order to ensure the parent with primary custody has the financial resources necessary to care for the couple’s children.
Serving Families with Dignity & Compassion
If you and your soon-to-be-ex spouse are business owners, your divorce is a financial puzzle as much as a legal one. The outcome depends heavily on how the numbers are framed and whether the attorney on your side of the table actually understands what they are looking at.
Bob Matteucci built and ran a business. He went through a divorce himself. He then earned a law degree specifically to help business owning families navigate the divorce process. He knows how to make sure the numbers tell the right story when spousal support or child support payments are on the line. Please contact him today to set up a meeting and discuss your case.