The purpose of child support is to ensure that the children of a divorcing couple are not financially penalized due to the separation of their parents. Although each state has strict guidelines to determine the amount of child support that each parent is responsible for, as a general rule, the final amount is based on a formula that includes:
Each parent’s salary after the divorce
Number and ages of children
For example, a spouse who earns more than the custodial parent will normally be assigned a higher percentage of responsibility for child support. Since the children are not residing with this parent, the payments will have to be sent to the custodial parent.
However, questions often arise when the payor (the person paying child support) inherits property or money. Many assume that this counts as additional income, and that the child support payments should be recalculated to accommodate this increase.
Although this is possible, an inheritance usually does not count as income and does not directly affect the amount of child support.
However, there are several situations where an inheritance can indirectly affect child support obligations.
Inheritance as Income
Although an inheritance is not normally considered to be part of a parent’s income, if a parent refuses to work, the courts may use the value of the inheritance to determine what percent of support they are responsible for.
However, a large inheritance could lead to the generation of substantial additional income. For example:
Monthly cash installments
Regular dividends from stocks and bonds
Although properties like homes or cars are not normally counted as additional income, should an ex-spouse rent out a home that was inherited, any profits generated could be deemed as an increase of income, and may be means to request a modification to the support arrangement.
Quality of Life
It certainly is no surprise that a large inheritance can substantially increase a person’s quality of life. Although a court may not consider one large lump sum payment an income, if this money changes the circumstances of the parent, a support modification may be necessary.
For example, an ex-spouse may inherit enough money to allow them to pay off their mortgage. As such, having less debt could ultimately increase that parent’s financial responsibility to their children.
Before someone can receive an inheritance, the executor of the will or a child support lawyer must check to see if the recipients of that money have any outstanding judgments. If a parent is behind on child support payments, this amount will need to be satisfied before any inheritance can be distributed.
It may also be important to note that other than income tax, a child support judgment has priority over any other judgments. What this essentially means is that any past-due child support is satisfied first, and any other judgments will be paid if there are any remaining funds.