DISCONTINUED TRUST PAYMENTS COUNTED AS INCOME FOR CHILD SUPPORT
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Filing folders with first label reading “trust documents”
When calculating a child support obligation, the party’s net income may include more than their take-home income from their job. Income can include certain disability payments, lottery winnings, and trust income among other sources of income. It can also include the amount of voluntarily reduced income or imputation of earnings.
In Moore v. Hernandez, a non-precedential case filed on July 17, 2023, the court decided whether the calculation of Father’s net income should include $3000 in trust payments made to him during his marriage.
The parties were married in 2009 and separated in September of 2020. Mother/Wife filed for divorce in February of 2021. In January of 2021, Mother filed a complaint for support of their one child. Father also filed for alimony pendente lite (“APL”). The support hearing officer made a recommendation of $954 per month and dismissed the claim for APL.
During the marriage, Father received funds from a multi-million dollar trust that he claimed he was no longer receiving. He argued that his mother controlled the trust and his mother stopped the payments to him after February 2021. The trust documents were not entered into evidence.
Father argued his case was similar to Fennell v. Fennell where income father could receive, but didn’t was not included as part of his net income. The Court distinguishes this case from Fennell v. Fennell, 753 A.2d 866, 868 (Pa. Super. 2000), where they addressed whether the father’s net income for child support purposes would include his proportional share of retained earnings of a subchapter S corporation, although he doesn’t usually take home these earnings. In this case, the court did not include the retained earnings because the father could not control whether the company would issue distributions or retain its earnings. However, “where the individual with the support obligation is able to control the retention or disbursement of fund by the corporation, he or she will bear the burden of proving that such actions were necessary to maintain or preserve the business.” Id.
In Moore v. Hernandez, the Court opined that Father offered only his testimony that his mother controlled the trust and stopped payments to him without addressing whether he actually had the right to receive such payments. It was also noted that the cessation of the payments coincided with the Mother’s complaint in support. This case turns on credibility and the Court adopted the credibility determination of the support Hearing Officer, which were adopted by the trial court. The Court found that Father failed to introduce sufficient evidence to establish that the trust income he received was no longer available to him.