Court Reviews Whether Gifts Represent “Income” for Purposes of Calculating Child Support

money-4-1290133-m.jpgParents who decide to divorce are typically concerned with preserving the well being of their children. Ideally, a couple can make it a priority to ensure that the transition for the kids is as easy as possible under the circumstances – by working together to achieve an arrangement that serves the children’s best interests. Unfortunately, because divorce can elicit many intense emotions and opinions, the parties may not always agree to the settlement terms. But there are many ways to move the process along efficiently and amicably and a local family law attorney with knowledge of the laws and procedures in San Diego can help make the process as smooth as possible for everyone involved.

It is especially important to consult a family law attorney when there are children involved in the dissolution of marriage. The outcome of the case will likely impact the family’s standard of living as a court will be expected to calculate child support under section 4055 of the California Family Code in accordance with state regulated guidelines. When determining the amount of child support, the court will look at (among other things) the extent of the parents’ gross annual income. The statute identifies numerous sources of possible income for the court to review when deciding on the amount of support.

Calculating child support can sometimes become complicated. For instance, in a recent divorce case, the couple lived a high society, lavish lifestyle at the expense of the husband’s parents and extended family. When they decided to divorce after 20 years of marriage, the parties’ monthly expenses averaged $45,000, but they had no income. They had three children. During the marriage, the husband received income from his grandmother’s trust, his parents’ annual gifts to the family totaling approximately $130,000, and other large advances from his parents to purchase homes and other real estate from time to time. The wife considered the advances of money to be gifts.

After the parties separated, the husband got a job earning $60,000 a year. He also continued to receive an annual sum of $26,000 from his parents and $13,000 from his grandmother’s trust. At trial, the wife sought child support (among other things) based on the husband’s estimated monthly cash flow between $57,800 and $64,793. The court concluded, however, that the child support order must reflect the financial standing of the parties, as it existed at the time of trial. In doing so, the court refused to include the “loans” or “gifts” from the husband’s parents when calculating that amount and awarded the wife $1,235 in child support per month. The court noted that their lavish lifestyle was sustained by loans and gifts and that there was no guarantee that it would be sustained. The wife appealed.

The court of appeals reviewed whether the parental advances, if viewed as gifts, may be treated as income under the state family code. According to the court, gifts may be treated as income for purposes of child support if it bears a reasonable relationship to the traditional meaning of income as a recurrent monetary benefit. It is within the trial court’s discretion to decide whether regular gifts fairly represent income. Here, the court upheld the trial court’s decision to exclude the historical parental cash advances as income, pointing out that they were made upon request, depending on the family’s needs. Further, and more importantly, the husband’s father ceased making the advances, now that his son is employed.

This case illustrates the complicated nature of child support matters and the issues parents can face in divorce. An experienced family law attorney could help sort through the challenging moments to adequately represent and protect your interests.

Roy M. Doppelt has been representing parties in divorce matters for more than 20 years. Doppelt & Forney serves clients throughout Southern California, including San Diego, Encinitas, La Jolla, and Chula Vista. For a free consultation, contact Doppelt & Forney through our website, or give us a call toll-free at (800) ROY IS IT (769-4748).

Related Blog Posts:

California Law Governs Request for Spousal Support in Divorce Proceedings

Court Determined Whether Separate Property Has Been “Transmuted” to Community Property

Appeal of an Order Modifying Child Custody and Support Must Include Adequate Appellate Record