As examples of annual gross income, Family Code section 4058 lists more than a dozen possible income sources. The list includes wages, rents, workers’ compensation benefits, disability insurance benefits, and business income. The section gives the court discretion to include employee benefits as income, and even allows courts to consider a parent’s earning capacity in lieu of actual income for purposes of calculating support.
In the most recent decision of In re Marriage of Alter, the Court has decided that gifts are income as well, despite the fact that gifts are not mentioned in the section at all.
After judgment of dissolution was entered, Mr. Alter commenced proceedings to modify his child support obligation. At the time of trial, he admitted that his mother covered many of his expenses, regularly giving him $3,000 per month for many years.
When the court designated the nature of the money Mr. Alter received from his mother as “income,” he objected, arguing that the money was a loan, or a gift, and loan proceeds are not income for child support purposes. The court did not buy that argument as there was no evidence Jack had ever repaid any of the money. Relying on section 4058, the court concluded that although the section does not explicitly list “gifts” among its examples of income, it does say that annual gross income is “income” from “whatever source derived,” which easily includes some types of gifts.
While it is settled that the principal amount of a one-time, lump sum, gift or inheritance is not income, gifts have been considered as income available for support, so long as the gifts bear a reasonable relationship to the traditional meaning of income as a recurrent monetary benefit. It is irrelevant, according to the court, that there is no legal obligation on the part of the donor to continue making the gifts or that the flow of cash does not appear on the income tax return.
To ensure that the court views an accurate picture of your income, be sure to consult with a family law attorney to find out which of your benefits can be considered as income for purposes of child support calculation.
The Reape – Rickett Law Firm is located at 25152 Springfield Court, Suite 100 in Valencia. For more information, please call 661-288-1000, or log on to divorcedigest.com .