The Recurring Gift That Pays Child Support

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The ability to take down a deadbeat dad seems to get easier with every appellate court decision in California. In Marriage of Alter (2009) 171 Cal.App.4th 718, the court decimated the type of dead beat dad that many of us previously believed were bullet proof.
The type of deadbeat I'm talking about is the father who sits at the pool all day working on his tan, while his children live with mom in a one bedroom apartment on the wrong side of the tracks. The type of guy who drives a fancy car, takes nice trips, and lives in a large house, while paying little to no child support, because the only money he receives is a recurring gift from his parents, which was once considered to be non income for the purpose of calculating child support.
In Alter, the man of the hour was named Jack. Jack was divorced to a woman named Cindie. Jack and Cindie had two children named Samantha and Alexandra. A couple of years after their divorce, Jack and Cindie found themselves back in court, dealing with a motion that Jack filed for modification of his child support obligation. During the hearing, Cindie argued that Jack's claim to have little to no income was bogus, since she knew that Jack's mother had given him a regular stipend for years.
To the trial judge, Jack admitted that his mother covered many of his expenses. She had been regularly giving him $3,000 per month for many years. For a time after the divorce, Jack lived with her, rent free. In 2005, she purchased a house and Jack moved into it. She then increased Jack's monthly stipend to $6,000, $3,000 of which Jack used to pay the rent his mother charged. Jack's mother also paid for Jack's daughter's schools, tutoring, and summer camp. Jack used his mother's credit card to buy clothes and other things for the girls. His mother paid for transportation and lodging for Jack to visit his daughters in Georgia several times a year. She gave him money from time to time when he needed it. She paid his attorney's fees in California and Georgia. And, although Jack had declined the offer, his mother had also volunteered to pay the difference between the court-ordered support and that which Jack was able to pay himself.
On appeal Jack tried to convince the court that gifts should never be considered income for the purpose of calculating child support, since the federal government does not consider gifts as income for income tax purposes. Unfortunately for Jack, the court was not persuaded with his argument. When ruling in favor of Cindie the court stated:
"We conclude that nothing in the law prohibits considering gifts to be income for purposes of child support so long as the gifts bear a reasonable relationship to the traditional concept of income as a recurrent monetary benefit... Jack has been receiving regular cash payments from his mother for over a decade. The periodic and regular nature of the payments means that the money is available to Jack for the support of his children."
Obviously this decision should be considered a big victory for a lot of custodial parents. However, a couple of cautionary notes needs to be made. First, the Alter court made it clear that not all gifts will be considered income for the purpose of calculating child support, especially if the gift is not recurring. Furthermore, the question of whether gifts should be considered income for purposes of the child support calculation is one that is left to the discretion of the trial court.
Finally, it is always possible that mommy and daddy will quit giving money to the deadbeat dad, in which case he can file a request for a downward modification of child support.

Written by: Donald P. Schweitzer