Cash Gifts, Inheritances, and Child Support

How Cash Gifts and Inheritances Impact Child Support Calculations in California

Posted September 4, 2024

When calculating child support in California, the court considers both parents’ income to ensure children benefit from their parents’ standard of living. But what happens when one parent receives a cash gift or inheritance? Are these funds included in the child support calculation? This article breaks down how California law views these financial windfalls and their effect on child support obligations.

What Are Cash Gifts and Inheritances in Child Support Cases?

Cash gifts and inheritances may sometimes appear as income due to deposits and withdrawals in bank accounts. However, it’s the recipient’s responsibility to prove that these funds are, in fact, gifts or inheritances, not part of their “annual gross income” as defined by the California Family Code.

Are Cash Gifts Considered Income for Child Support in California?

Even if the court decides that cash gifts or inheritances don’t count as part of a parent’s gross income, this doesn’t mean that the parent can avoid their child support obligations. California law ensures that both parents continue to provide financial support for their children, regardless of how they receive money. Courts are cautious not to allow any parent to manipulate the form in which they receive funds to reduce their child support responsibilities.

Proving Cash Gifts or Inheritances Are Not Regular Income

If a parent receives a one-time cash gift or inheritance, they should provide evidence showing it is a sporadic occurrence. This is critical because the court has the authority to “impute” income based on the potential interest earnings of a lump-sum gift if it were invested. Imputation of income prevents the entire amount from being treated as income for child support purposes, favoring the parent who receives the funds.

Further Reading » Child Custody And Visitation: Efforts In The Best Interest Of The Children

Impact of Regular Cash Gifts on Child Support

In contrast, a pattern of regular cash gifts may lead to a different outcome. If one parent can show that cash gifts are received consistently—such as a yearly deposit of the same amount—the court may consider this a recurring benefit. When these gifts significantly improve the recipient parent’s standard of living, the court could include them in child support calculations to ensure the children share in the financial benefits.

Seeking Legal Guidance for Child Support Issues

Navigating the complexities of how cash gifts and inheritances impact child support in California can be difficult. Every case is unique, and it’s important to seek professional advice. Consulting an experienced family law attorney can help you understand your rights and obligations and guide you through the intricacies of California child support regulations.

Protect Your Financial Future and Your Child’s Well-Being

Accurately calculating child support is essential to avoid long-term financial consequences for both parents. Understanding how gifts and inheritances are treated in these calculations ensures a fair outcome. To protect your financial future and ensure your children receive the support they are entitled to, consult with our experienced family law team at Naimish & Lewis. Schedule an initial consultation today.

Robert J. Allison, Esq.

Mr. Allison is a resolution-oriented associate attorney in our Family Law Practice. Even-keeled and fact focused, he is able to assist our clients understand their rights and obligations through the stress and smoke and mirrors presented in their divorce, custody, and domestic violence matters. During the initial consultation, and again once facts and evidence have been collected, Mr. Allison provides various strategies to help clients present their cases, considering cost, time, and client needs. He prides himself in not making false promises to his clients and is unafraid to speak the raw and sometimes harsh reality of how a Court will decide a matter given a specific set of facts and circumstances, both to his clients and to opposing parties. Many potential clients share that they are unhappy with their previous attorneys because they felt a lack of communication, an uncertainty about the family law process and timeline, and they do not understand the strategy in their case or the invoices they receive. While the legal process is complex, Mr. Allison attempts to reduce the confusion through a reasonable case management process involving client participation, because a family law case is often the most difficult period of time in a client’s life.