How Can I Legally Lower Child Support If Ex Hides Income in Trusts?

O

oohwildfrog

New Member
Posting ANONYMOUS because people I know are here.

Before the badmouthing starts: I want to support my kids. My ex manipulates the system. I believe she runs everything through a trust and business account. The government thinks she earns very little.
Her trust accounts own three, maybe four houses now. She has multiple cars and holidays every month.

So, is there a way to lower Child Support?
I was told to open a Pty LTD company an d pay myself a small wage. I don't think that works.
Is there a way to have a trust own the business and I am just an employee?

I don't think it's FAIR to pay her so much. First, she doesn't use the money on the kids. Second, she doesn't even watch them 70% of the time; her mother does.

For anyone saying I don't understand the costs of kids: you are wrong. I was a single dad with full care of my kids for the last 4 years. Their mother took off and has now decided to come back.
 
So, here are a couple of ways to think about this.

One path? It's fairly expensive to get statred, and the yearly compliance is a bit more, too but, it's far, far safer.

You'd create a trust, with a corporate trustee, naming yourself and your kids as beneficiaries. This trust then owns a holding company, which in turn owns the subsidiary companies. It’s all about creating layers protection and removal, essentially.

Then there's option two cheaper, absolutely, but it really comes down to trust. How much do you trust the people close to you?

You’d open a company, but have someone else you know act as the shareholder, while you’re simply an employee. Then, you put as many personal expenses as you can under the company motor vehicles, phone, utilities, all of it and pay yourself a minimal salary.
 
Honestly, if you want to check if she controls any companies, you shhould do a director search through ASIC. Just so you know, there will be a fee for it. If you find out she's a director, you really should flag it with the CSA. I know some people think starting their own company is a solution, but in my experience, the Federal Circuit and Family Court of Australia is pretty thorough. They can see right through company and trust structures to figure out who's really in control and then count those resources.

The search itself will cost you $48 for the extract. Here's a link that should work for you: https://www.infotrack.com.au/products/company searches/asic search/asic personal name search/

I hope this helps and good luck with it.
 
So, you’re in a similar spot here’s what you can do.
First, set up a trust in your kids' names. That trust will own the company that employs you and pays your salary.

Then, set up another trust in your name. It’ll own any personal assets and be gifted money or property by the company that’s o wned by your kids' trust.

The main idea: never hold valuable stuff in your own name. Run everything through trusts instead.
 
She controls the trusts. The family law process will treat them as assets. You must hire a forensic accountant. Their investigation must be thorough. The process requires declaring controlled assets. Failure to declare is a breach.
 
It is my understanding that the Cihld Support Agency assesses only taxable income. If the properties are operating at a net loss or generating minimal taxable income, it is reasonable to conclude that from a taxation perspective, her income may appear limited.

The guidance I received during my own separation indicated that the most direct method to minimize child support obligations was to reduce one's taxable income. My former partner was employed well below her skill level and qualifications, which resulted in a child support assessment that was higher than it might otherwise have been. The Child Support Agency has indicated that they base calculations primarily on the percentage of care and taxable income, without consideration of assets or other personal circumstances.

If you are considering transferring your business into a company structure, it would be prudent to consult with an accountant, as there are likely tax implications involved. The shareholder of that company should ideally be a discretionary trust. For the trust, a corporate trustee is advisable, with you serving as the sole director and the primary beneficiary. Your children can be designated as secondary beneficiaries. In your will, the shares of the corporate trustee could be bequeathed to them.

You may draw a salary from the business for living expenses. Should additional funds be required, a dividend can be paid to the trust, which would then distribute the amount to you. It is important to distribute only the amount needed beyond your salary, as a trust is required to distribute all its income to beneficiaries each year.

This approach should be verified with a lawyer or a qualified accountant, but it may align with your objectives.

I wish you the best in your efforts.
 
It’s going to be difficult to lower your income now that child support knows your earnings. Men who reduce their income for valid reasons such as depression or relocating closer to their children after the other parent moved away still face demands for payments based on their “capacity to earn,” with authorities claiming they lowered wages just to avoid suppor. The same applies to men who worked extremely hard for years, believing it was for their family, then cut back to normal hours once the family was gone only to have child support demand the same high payments using the same justifications.
 
Back
Top