Loan or Gift as Income for Support in PA
For complex/high income divorce cases, there are often multiple sources of income to consider. Whether or not these sources are to be considered as income for support can mean a dramatic difference, especially where gifts and loans are involved. In a recent Pennsylvania support case, Suzanne D. v. Stephen W., 65 A3d 965 (2013), the Pennsylvania Supreme Court was to decide if large cash gifts were to be considered eligible income for support purposes.
This PA case involved the receipt of large cash gifts from a grandparent in the amount of about $10,000 per month. In addition to the monthly gift amount, the obligor Father also maintained a monthly income of approximately $12,000 per month. Wife and obligee earned between $2,500 - $4,500 per month. In initial proceedings Father was to pay $1,500 in child support. The amount was also subject to a $500 upward deviation and Father was required to pay off medical bills and counsel fees.
The Father appealed the Master’s decision set forth above and the trial court ultimately affirmed this decision. However, based on 23 Pa.CSA 4302, “income” is defined as wages, salaries, bonuses, commissions, rents, annuities, pensions, unemployment compensation, and other sources which do not include gifts or loans.
Pursuant to this statute, Father appealed the Judge’s decision stating that that the money he received from his grandfather were loans and not gifts. Arguing against the $500 upward deviation from support guidelines, Father claimed the court was not justified in its determination that this amount be based upon gifts. Obligee Mother cross-appealed, arguing in favor of the $10,000 monthly gifts being considered as income for support.
The lower court’s decision was affirmed by the Superior Court, finding that the $10,000 per month were in fact gifts and that the deviation was justified. Further, pursuant to the statutes, it was deemed that the amounts ought not to be considered income for support purposes but that the upward deviation was reasonable. With respect to Father’s obligation to pay medical bills and counsel fees, the initial decision was affirmed in consideration of the disparity in incomes.
Both the initial and final determinations were made in consideration of the hardships that would be placed upon Mother, and ultimately the children, if all debts were to be repaid by Mother. Even though neither party acted in bad faith in causing the counsel fees, the court saw it as a detriment to the best interests of the children that Father be responsible for these costs.
In this Pennsylvania support case, the court upheld the definition of the income pursuant to the statutes; however, it did not reverse the lower court’s decision. This case shows the interesting importance of where the terms, “reasonable” and “best interest of the child” play major roles in support matters. Additionally, an experienced support lawyer to handle complex and high income cases can help with weighing the possible outcomes of litigation in accordance with the facts of the case. The right family lawyer in complex support cases will assist in balancing the predicted costs of all results and advise accordingly.
For complex divorce and support matters, the Law Offices of Michael Kuldiner, P.C. can provide the experience and tenacity to get the best results possible. Call our office at (215) 693-6191 or submit an online inquiry form to schedule your consultation with an experienced Bucks County support attorney.