Can Gifts Be Considered Income in Child Support Cases? Part I: Free Housing and recurring Cash Gifts from Family

PART I: FREE HOUSING AND RECURRING CASH GIFTS FROM FAMILY

In many child support cases, a parent often receives some “gift” from either a grandparent, romantic partner, or friend. These gifts can come in many different forms, but some common types are free housing, help with paying bills, or free use of a vehicle. In this two-part installment, we’ll discuss whether free housing and recurring cash gifts from family can be considered income for child support purposes.

FREE HOUSING

Previous cases have established that free housing may not be considered “income” for calculating guideline child support, but it could nonetheless justify an increase in child support payments. In Marriage of Loh1, the trial court found that father had been living for free in a luxurious home with his girlfriend, and imputed him with income based on fair market rent. The appellate court reversed, instructing the lower court to consider free housing benefits under Family Code section 4057. This code section allows courts to adjust child support payments upward in special circumstances. Thus, a parent receiving free housing may not be imputed with income based on the home’s fair market rent, but that parent’s child support payment may be adjusted upward anyway to account for that benefit. Any adjustments would be discretionary by the trial court.

In a similar case, Marriage of Schlafly2, father lived in a home where the mortgage had been paid off. Thus, father did not have rent or mortgage expenses. Mother asked the court to consider father’s free housing in weighing whether to increase father’s child support payments. The appeals court agreed and ordered the family court to consider an upward adjustment of father’s child support in light of his lack of housing expenses.

These cases establish a clear precedent that any free housing benefits may not be considered strictly income per se, but will likely be considered under Family Code section 4057 as a possible special circumstances adjustment to child support.

RECURRING CASH GIFTS FROM FAMILY

In many cases, a party may receive recurring cash gifts from family. For example, in Marriage of Alter3, father had been receiving $6,000 a month from his mother for more than a decade. The reviewing court held that monthly cash payments that had recurred for years constituted income available for child support.

Along the same lines, later appellate courts determined that cash gifts from parents to their adult children may be considered income when deciding whether that adult child has the ability to pay attorney’s fees in a family law proceeding.4 Thus, courts have been consistent about treating regularly recurring cash gifts from family as income for child support purposes.

In our next post, we’ll continue with Part II of this discussion-whether cash gifts from legal strangers, i.e., friends, can be considered income.

For more information about the cases mentioned in this article, please contact Alexander Quan at 415-457-4367 or via email at alex@theshermanlawoffice.com.

Disclaimer: Law Office of Christina Sherman publishes articles about family law cases on its website for informational purposes only. The information contained herein may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Law Office of Christina Sherman or the individual author. This general information is not a substitute for legal advice on any subject matter. For advice pertaining to your specific case, please contact our office to schedule a consultation. No reader of this article should act or refrain from acting on the basis of any information included in, or accessible through, this article without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction. Using this information or sending electronic mail to Law Office of Christina Sherman or its attorneys does not create an attorney-client relationship. Any statements pertaining to past results do not guarantee future results.


1Marriage of Loh, 93 Cal.App.4th 325 (2001).

2Marriage of Schlafly, 149 Cal.App.4th 747 (2007).

3Marriage of Alter, 171 Cal.App.4th 718 (2009).

4Kevin Q v. Laren W., 195 Cal.App.4th 633 (2011); Marriage of Smith, 242 Cal.App.4th 529 (2015).

By |2018-03-27T16:24:48-07:00March 7th, 2017|Child Support|
Go to Top