Estate Planning Lawyer in Phoenix, AZ
A trust lawyer assists clients in understanding whether or not a trust fund may affect child support obligations or awards and in what ways. During the divorce process, child support is a primary consideration and is often the basis for conflict between the spouses. Though the best interests of the children may be the priority of both parents, the financial terms can be contentious and even delay the finalization of the divorce.
Taking a proactive approach in preparing for the divorce proceedings can help ensure that the resolution is a positive one. Every case is different with its own set of unique variables which makes it critical to undergo a detailed review with a trust lawyer prior to commencing with the divorce proceedings.
The Determination of Child Support Payments
When minor children are in the picture, decisions must be made that include which spouse should pay child support, and the amount of those awards. The state provides general guidelines for making these determinations, but as a rule, the income of each parent will be the primary consideration. Lesser (but still important) considerations may include daycare costs, the amount of child visitation that the other parent will be granted, and whether or not there are minor children from previous relationships.
Another important consideration is whether or not either parent will receive income from a trust. This information will need to be presented to the Judge at the beginning of the divorce proceedings and prior to their making a ruling on child support. Should an individual not disclose this financial information, they may be fined and be subjected to sanctions.
Types of Income Considered by a Divorce Court Judge When Ruling on Child Support
Though not every form of income is considered by a divorce court judge when ruling on child support, most income sources are fair game. Here are some common examples of income that must be reported to the Court:
- Rental income
- Business income
- Bonuses or incentive income or stock options that are taken
- Lottery or casino winnings
- Overtime earnings
- Inheritance payments
- Retirement benefits
- Social Security payments
- Disability payments
- Worker’s Compensation benefits
- Salary or hourly wages
Trust Funds as Income
If you have established a trust as an estate planning tool, you are already aware of the many benefits in doing so, including the anticipated tax savings for your heirs. However, if you will be receiving money from that trust, then you must report that income to the divorce court judge prior to them making a ruling on child support. This is true whether you receive a monthly payout from the trust, or whether you will receive an annual lump sum payment.
Conversely, if the person who is the recipient of the child support receives trust funds, those funds will be taken into consideration by the Judge. In this way, the person who pays the child support may have to pay less.
Learn more about how a trust can affect child support terms by speaking with a seasoned estate planning lawyer in Phoenix, AZ.
Contact Kamper Estrada, LLP for their insight into estate planning and trusts involving child support.