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Law Pro
Law Pro, Lawyer
Category: Family Law
Satisfied Customers: 23751
Experience:  20 years practicing family law from divorce, custody, support, alimony to equitable distribution
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I have a question on Osthler Smith bonus table. If me and my

Customer Question

I have a question on Osthler Smith bonus table. If me and my ex both bonus how is it run? Do we put in his income and my income or the difference ? Please explain how it should be run in this case.
Submitted: 3 years ago.
Category: Family Law
Expert:  Law Pro replied 3 years ago.
In 1990 the California Court of Appeal in Marriage of Ostler and Smith upheld a trial court that, rather than setting a fixed monthly amount of child support, ordered a base monthly amount of child support plus a flat percentage of the payor's bonus income.

In the years following Ostler and Smith, ordering a percentage of future variable income as additional support became a commonly used tool for family law attorneys and judges to deal with cash bonuses and other types of compensation including stock options, restricted stock and Employee Stock Ownership Plans.

It is easy to see why --- "Ostler/Smith orders" eliminate the risk that a payor will be ordered to pay child support on income the payor may never receive.

Such orders also insure that the children receive a share of the variable income if it is, in fact, received by the payor. The method also reduces the need to have successive modification proceedings due to fluctuations in a payor's income.

The logical way to deal with bonus or fluctuating income is to do so as the court did
in Ostler/Smith -- to make a base child support level and award a percentage of any “bonus” income as additional child support.

The following paragraphs contain a proposal as to how the court can continue to make these orders.

Attorneys must first overcome the skepticism of many family law judicial officers that a
deviation from the guidelines, however negligible, would be automatically reversed on appeal.

Fortunately, language in Hall suggests that the trial court’s Ostler/Smith order would have been upheld had the trial court followed the statutory procedure for deviating from the guidelines.

Similarly, the Court of Appeal in Kerr held that a percentage award based on the realized income from the exercise of stock options would be permissible.

Next, courts should be guided through the deviation procedure set forth in Family Code
section 4056. This can be accomplished by including attachments to memoranda of points and authorities that set forth the requested written findings for deviation. The following five findings should be made by the court:
1) A calculation as to what the guideline support should be. The court may
use past income history based on pay-stubs, tax returns and etc. to calculate the child support.
The computer-generated printout of the guideline calculation should be part of the court’s findings.
2) A finding that the support differs from the guideline formula because the
guideline amount would be unjust or inappropriate. It is advisable to suggest the following language: “Because of the compensation scheme of the payor, past income history may not be indicative of future income and would therefore be unjust or inappropriate. Accordingly, a deviation from the guidelines pursuant to Family Code section 4064 for ‘seasonal or fluctuating income’ is appropriate.”
3) An explanation of how this “deviation” is consistent with the best interest
of the child. A reference to the principles behind the child support guidelines is helpful in this regard because, ironically, by deviating from the guideline for the Oster/Smith order, the court is actually upholding the principles set forth in Family Code section 4053. One of the principles is that “the guideline seeks to encourage fair and efficient settlements of conflicts between parents and seeks to minimize the need for litigation.” None of the principles set forth in section 4053 are violated by making an Ostler/Smith order.

4) A calculation showing that the “deviation” is consistent with the guidelines. This can be accomplished by using a child support computer program to determinethe percentage to be paid as additional support. First, calculate a base support using a base salary. Then, calculate what support would be if the base salary was increased $10,000 per year (or $833.33 per month). (By increasing income by $833.33 per month and determining that the actual $10,000/year equals an increase of $833.33 per month in support, the percentage of the bonus income may be measured by subtracting the higher child support figure from the base support figure and moving the decimal point.) For example, if the father increases his income by $10,000 annually, the annual support will change by $900, or 9 percent of $10,000. Thus father would pay nine percent of each bonus dollar to Mother as additional child support.

The deviation between an Ostler/Smith order (using the guideline to form a basis for the appropriate percentage) and the actual guideline amount is unlikely to be significant so long as the future variable income of the payor can be roughly estimated.
Law Pro, Lawyer
Category: Family Law
Satisfied Customers: 23751
Experience: 20 years practicing family law from divorce, custody, support, alimony to equitable distribution
Law Pro and 10 other Family Law Specialists are ready to help you
Customer: replied 3 years ago.
Hi.. ..I have seen atorneys using a computer program to calculate on bonus. They run the disomaster and there itself there is a tab to put in bonus min -max bonus range and it calculates a table . This looks quite odd. IN my case I am getting paid in child support $700 . when we put bonus for my ex in the table i shows some child supprt and no supposal support. The stange thing is when they run my table I am asked to pay him supposal support as well and it is approx 1/3 of my bonus income. Nowhere in the table we are mentioning what the bonus is ..I am all lost also the judge could not make any sense on why I should be ordered to pay supposal support and that too 1/3 of my bonus. Please help and explain how and what should be done. I'm, all lost.
Expert:  Law Pro replied 3 years ago.
When was the last support order - what was the date?
Customer: replied 3 years ago.
on 12/7/2010 my ex was ordered to pay me $735 in support .there was no supposal support in this dissomaster and no supposal support was ordered on the base dissomaster. but for the bonus the judge has ordered child and supposal support to both of us . In 2010 he got bonus 14800 but with the computer prgram they run he is not to pay any supposal support to me. I got bonus in 2011 19,000 and my ex is to still get bonus in 2011 but the table they run they ask me to pay him 700 in child suppport and 4800 in supposal support on my bonus income. I am all confused. Please help.
Customer: replied 3 years ago.
I have not heard back on this and the status shows as closed.?Can you please help me with this.
Customer: replied 2 years ago.
if court orders to use ostlersmith table for support calculation on bonus income how i can prove that it is wrongly calculating &what are exact fallacies.
Expert:  JerrySJD replied 2 years ago.
You run both bonuses. Once you see the amounts due, you can offset the two, which is easier than writing two checks for the full amount. Your ex should agree to the offet since there is no net loss.
Customer: replied 2 years ago.
Can you Pl ellaborate on running both bonuses. How do you calculate spousal on bonus income. Do we put bonus income in disso. On base salary there are no spousal orders.
Expert:  JerrySJD replied 2 years ago.
The bonuses are entered after they are received.
Customer: replied 2 years ago.
Where do u enter bonuses..... and how. What abt the base income.
Expert:  JerrySJD replied 2 years ago.

You enter the bonus on the income line. Do you have the DissoMaster program? You can get one at:

http://www.childsupportca.com/dissomaster.htm

Remember, you put monthly figures, so the bonus is divided by 12 for the year. If you put the full bonus you will get a huge number, which is incorrect. Hope this helps. Thank you for the opportunity to serve you.

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