Facts: Husband and Wife divorced after a 16-year marriage. They had three children, ages 14, 12, and 10.

Husband worked as a business manager for a masonry company. He consistently earned much more than Wife. Wife was primarily a stay-at-home parent during the marriage while Husband’s career flourished.

Around the time of separation, Wife obtained two part-time jobs. She worked as a teacher’s assistant and in retail. Her earnings remained modest.

Husband’s income included a base salary and annual performance bonuses. During the five years before Wife filed for divorce, Husband’s base salary increased from about $97,000 to about $137,000. His bonuses ranged from $80,000 to $250,000.

Husband reported the bonuses as income on his tax returns. But in the divorce, he argued the bonuses should not count as income for child support or alimony.

In 2024, Husband received a $250,000 bonus, which he deposited into a separate account without informing Wife. At trial, he admitted this bonus brought his total 2024 earnings to nearly $400,000. Nevertheless, he insisted that his gross monthly income for child-support and alimony purposes was only about $12,000, essentially his salary without bonuses.

On the first day of trial, Husband surprised Wife by revealing an alleged change in his employment. He claimed his company had recently been sold and presented an unsigned letter indicating a new job offer with a $150,000 salary and a significantly smaller bonus going forward. Husband had not disclosed this potential change during pretrial discovery. Wife’s attorney objected that the letter was unauthenticated, constituted hearsay, and had been withheld in violation of Husband’s duty to supplement discovery responses.

The trial court excluded the letter. It found Husband knew about the potential sale and bonus changes months earlier but failed to disclose them to Wife or even his own attorney.

The trial court allowed Husband to testify about the alleged new compensation plan but said it would give that testimony only the weight it deserved. When trial resumed later, Husband still had no signed employment contract to corroborate his testimony.

The trial court found Wife highly credible. It found Husband was not credible, noting that he often gave evasive and less-than-forthcoming answers.

Because Husband’s income was variable, the trial court averaged his salary and bonuses over six years. It disregarded his above-average deposits in early 2025 as an outlier. The court found Husband’s gross monthly income was about $20,083. It found his claimed income of about $12,000 per month was unreasonably low.

Wife’s average gross monthly earning capacity from her two jobs was about $2,949.

After considering the statutory factors, the trial court concluded that Wife could not fully support herself. It awarded Wife transitional alimony of $6,000 per month for 36 months, then $4,000 per month for the next 36 months, and thereafter $2,000 per month as alimony in futuro.

This step-down schedule was designed to coincide with the oldest child’s emancipation after three years and the youngest child’s emancipation after six years.

The trial court also ordered Husband to pay Wife’s attorney’s fees of $59,559.60 as alimony in solido, given Husband’s far superior ability to pay.

Husband appealed.

On Appeal: The Court of Appeals affirmed the trial court.

Variable income. Tennessee’s Child Support Guidelines define gross income broadly to include income from any source, including bonuses. Tennessee’s alimony statute likewise requires courts to consider each spouse’s earning capacity and income from all sources.

When income varies, Tennessee courts often average the income over a reasonable period. This is especially true when bonuses or other incentive compensation are a regular part of the spouse’s earnings.

Tennessee courts generally favor long-term averaging to smooth out fluctuations in pay, and trial courts have broad discretion in how to treat variable income.

The Court of Appeals explained:

Trial courts have discretion, based on the particular facts of a case, to determine the most appropriate way to average variable income. Tennessee courts have tended toward a preference for long-term averaging as the most appropriate method for calculating income that is variable in nature. This Court has regularly upheld averages calculated over the course of years. Such averaging may even, at times, result in a finding that a parent’s average monthly income is slightly greater than the amount that the parent is earning at the time of trial. Here, Husband’s income actually appeared to be increasing and was higher at the time of trial.

The Court found no error in the trial court’s use of a six-year average. Husband’s bonuses were not speculative windfalls. They were a recurring part of his compensation.

Alimony. The Court found that the trial court properly weighed Wife’s need an Husband’s ability to pay, which are the two most important alimony factors.

Among these findings, the court found that the parties had drastically different capacities to earn income. Husband had been continuously employed throughout the marriage, whereas Wife had been out of the work force for more than a decade. Wife had demonstrated a commendable work ethic, working at two jobs during the pendency of the divorce.

The Court also noted that much of Wife’s financial need related to expenses for the parties’ children, which the trial court accounted for by reducing the alimony as the children were emancipated.

Based on the parties’ circumstances and the findings regarding the statutory factors, the trial court determined that a combination of transitional alimony and alimony in futuro was most appropriate. The court tied this award to the emancipation of the children: Wife would receive $6,000 per month in transitional alimony until the emancipation of the oldest child, $4,000 per month in transitional alimony until emancipation of the youngest child, and thereafter $2,000 in alimony in futuro.

The Court found no error in the trial court’s analysis.

The Court affirmed the trial court’s judgment in its entirety, including the attorney’s fee award.

K.O.’s Comment: This case is a good reminder that bonuses usually count when they are part of the regular compensation package. A spouse cannot report bonuses as income to the IRS, enjoy the benefit of those bonuses during the marriage, and then argue they are too speculative to count for support. That argument works better when bonuses are rare, small, or truly unpredictable. It does not work well when they arrive year after year and make up a large part of the household income.

However, compare this with Velez v. Velez, where the Court of Appeals declined to include small, one-time bonuses in income because they were too speculative. That is a very different situation from recurring six-figure bonuses here.

Source: Thompson v. Thompson (Tennessee Court of Appeals, Middle Section, May 29, 2026).

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