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Setting child support is a major issue, whether it’s in the context of a divorce case, or deciding support and custody issues for unmarried parents. Your finances are the starting point when setting child support. Arriving at a final amount can be complex and a source of conflict. Many people ask how different assets and income sources factor into child support, including gifts, inheritances and trust funds.
Learn about the general rules on how these asset types fit into child support issues. You’ll be better prepared to work with your lawyer and arrive at child support terms that are fair to both parents and meet your child’s needs.
Income, Assets and Initial Child Support Orders
Child support is controlled by state law, usually starting with a formula based on your income. Courts also have leeway and can tailor support to the needs of a given case. Some examples of income sources include:
- Salaries, wages, bonuses and other business income
- Income from assets you own
- Lottery winnings
- Social Security, disability and workers’ compensation benefits
With few exceptions, any money you receive can be treated as income for child support purposes.
Courts also look at a family’s broader financial picture when deciding?child support issues. Factors include your child’s standard of living, your current finances and your assets as a whole. Expected changes can impact the strategy of your case, too. You may want to speed up or slow down your case when you or the other parent expects a big financial change, such as receiving a large bonus from work or an inheritance. Discuss any changes or expected changes with your lawyer.
Changing Child Support
Once a child support order is in place,?modifying it may be a challenge. Generally, a parent must show a change of circumstances, and you may have to show a need for a increase. You’ll also have to show the other parent’s increased ability to pay.
A parent’s improved finances often come from a change in?his or her?earnings such as raises, bonuses or an advancing career or a successful business. Added income and assets from gifts, inheritances and trust funds can also change a parent’s finances and affect child support amounts.
Gifts and Child Support
Most gifts people receive won’t count as income for purposes of child support. Usually gifts are received one a one-time basis, such as marking a special occasion, and the value is relatively low.
However, if you receive large monetary gifts on a regular basis, some courts will count them as part of your income for child support purposes. Once again,?state law controls the answer. The most common example is a large annual money gift you receive from a close relative, such as your parent.
Keep in mind that if a gift
Discuss your state’s laws with your lawyer. Some states view gifts as too speculative since the gift givers don’t have a legal duty to keep giving gifts. They can stop at any time. Other states have a broad definition of income for child support purposes and do include regular monetary gifts.
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