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A Divorce Court Cannot Determine a Child Support Order Based on Including Prior Cash Advances as Current Income

Frederick Williamson and Mary Kate Williamson were married in 1989, lived in Orange County, and had three children during the course of their 20-year marriage. Husband’s parents supported the family’s lavish life style. Husband and wife separated and calculated their monthly expenses to be at $45,000 per month despite having no employment income. Husband declared his annual post-separation income at $99,000. The court agreed with wife’s Orange County divorce lawyer and ordered husband to pay a permanent spousal support of $2,000 per month, and a child support order of $1,235 per month for their minor son. Also, the Orange County divorce court ordered husband to pay wife $10,000 in attorneys fees. In determining husband’s income for child and spousal support purposes, the Orange County divorce court did not treat historical cash advances from husband’s parents as income. The divorce court determined that the cash advances were loans, and thus excluded from income. Additionally, the divorce court explained that in determining a child support order, the court could only look at the husband’s current earnings and income. Further, it could not order husband’s parents to make further cash advances or gifts thus it could not factor the cash advances or gifts into the calculation of income for support purposes.

The Court of Appeal in Orange County, determined that the large sums of money received by husband from parents were not characteristic of “loans” but instead amounted to gifts. However, husband’s father adjusted the trust agreement to state that the sums of money received by husband would be deducted from his inheritance. The Court of Appeal in Orange County determined that by definition advancement on inheritance is a gift by its very nature. The Court of Appeal in Orange County explained that the re-occurring annual tax-free gift of $26,000 from husband’s father correctly constituted a portion of his total annual income, calculated at $99,000. However, the Court of Appeal agreed with Husband’s Orange County divorce lawyer and held that the other cash advances were too speculative or uncertain to be considered income. Thus, the Court of Appeal in Orange County held that it could not calculate husband’s parent’s sporadic gifts of cash as income in determining the child support orders. The Court also held, since husband’s parents were no longer providing the husband with cash support the Orange County divorce court had appropriately determined the spousal support order based on husband’s calculated income and ability to pay. Consequently, whether the parent’s cash advances were considered loans or gifts, was irrelevant in determining child support and spousal support orders in this Orange County case. Recurring gifts from family members may constitute income depending on the facts.

In re Marriage of Williamson (2014) 226 Cal. App. 4th 1303