Title: James H. Cameron v. Jane P. Cameron
Citation: N/A
Docket Number: 1995AP000311
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 22, 1997

SUPREME COURT OF WISCONSIN 
 
                                                              
 
Case No.: 
 
95-0311 
                                                              
 
Complete Title 
of Case: 
 
 
James H. Cameron, 
 
 
 
 
Petitioner-Respondent, 
 
 
 
 
v. 
 
 
 
Jane P. Cameron, n/k/a Jane Wise, 
 
 
 
 
Defendant-Appellant-Petitioner, 
 
 
 
______________________________________ 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
 
 
 
Reported at:  197 Wis.2d 618, 541 N.W.2d 164 
 
 
 
 
 
 
(Ct. Apps. 1995) 
 
 
 
 
 
 
PUBLISHED 
 
 
                                                              
 
Opinion Filed:  
April 22, 1997 
Submitted on Briefs: 
 
Oral Argument:  
December 3, 1996 
 
                                                              
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Sawyer 
 
JUDGE: 
 
NORMAN L. YACKEL 
 
                                                              
 
JUSTICES: 
 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating: 
 
                                                              
 
ATTORNEYS:  
For the defendant-appellant-petitioner there was a 
brief by Timothy M. Doyle and Thrasher, Doyle, Pelish & Franti, 
Ltd., Rice Lake and oral argument by Timothy M. Doyle. 
 
 
For the petitioner-respondent there was a brief by Donald L. 
Hoeft, Steven E. Antolak and London, Anderson, Antolak & Hoeft, 
Ltd., Minneapolis, MN and oral argument by Steven E. Antolak. 
 
 
No. 95-0311 
 
1
 
NOTICE 
This opinion is subject to further editing 
and modification.  The final version will 
appear in the bound volume of the official 
reports. 
 
 
No. 95-0311 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
James H. Cameron, 
 
  
 
Petitioner-Respondent, 
 
 
v. 
 
Jane P. Cameron n/k/a Jane Wise, 
 
 
 
Defendant-Appellant-Petitioner. 
 
FILED 
 
APR 22, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded. 
 
¶1 
JANINE P. GESKE, J.   Jane Wise ("Wise") asks us to 
reverse the decision of the court of appeals affirming an order 
of the circuit court imposing a trust on child support 
arrearages 
owed 
by 
her 
former 
husband, 
James 
Cameron 
("Cameron").1  Pursuant to that order, Cameron and Wise jointly 
own the trust, but disbursements are controlled by the circuit 
court.  The question presented is whether the circuit court 
erred by imposing a trust on past due child support owed by 
Cameron when it made no finding that Wise was unable or 
unwilling to wisely manage the child support money owed.2  We 
hold that in this case, the circuit court erred when it imposed 
                     
1 Cameron v. Cameron, 197 Wis. 2d 618, 541 N.W.2d 164 (1995). 
2  Wise also asks us to decide whether a trust is in the best 
interest of the children if at its inception the trust does not 
provide for a disposition of trust funds once the youngest child 
reaches the age of majority.  Because we reverse the order 
creating the trust, we need not decide this second question.  
 
 
No. 95-0311 
 
2
a trust on child support arrearages without the consent of Wise, 
the primary custodian, or without any evidence to support a 
finding that Wise was unable or unwilling to wisely manage that 
support money.  Our holding is limited to the facts of this case 
which concern support arrearages stemming from a support order 
entered before August 1, 1987.  We therefore reverse the order 
of the circuit court creating the trust and remand for further 
proceedings consistent with this opinion. 
¶2 
The Sawyer County circuit court, Norman L. Yackel, 
granted a divorce to Wise and Cameron in the spring of 1987.  
The divorce judgment included an order for joint custody and 
gave Wise primary physical placement of the couple's three minor 
children.  Under the terms of the divorce judgment, Cameron was 
to pay as child support the greater of 29% of his gross monthly 
income from all sources, or the sum of $4,640.00 per year.  The 
court imposed interest at the statutory rate of 1.5% per month 
on any amount of child support unpaid.  At that time the parties 
did not ask that any of the child support money be placed in a 
trust for the benefit of the children.  The record indicates 
that Cameron made some payments toward his child support 
obligation.  
¶3 
On December 15, 1993, Wise moved the circuit court for 
an order requiring Cameron to immediately pay all past due child 
support and to determine the appropriate amount of current child 
support.3  Cameron filed a cross-motion on April 18, 1994, 
seeking, among other things, a "fair and equitable disposition 
                     
3  Wise's motion also included a motion to find Cameron in 
contempt for his failure to pay child support as previously 
ordered by the court, and for implementation of an immediate 
income assignment for enforcement of child support.  
 
 
No. 95-0311 
 
3
of all amounts claimed due as child support" and a modification 
of the existing child support order.  In his memorandum 
addressing those motions, Cameron urged the circuit court to 
place any existing arrearages into a separate trust for the 
support, education and welfare of the children, citing Wis. 
Stat. § 767.25(2) (1993-94).4 
¶4 
On September 1, 1994, the circuit court held a hearing 
on the parties' motions.  In a written decision filed December 
27, 1994, the circuit court found that Cameron owed $118,140, 
including interest, in past-due child support through year-end 
1993.5  The court refused to retroactively reduce Cameron's child 
support obligation, and also denied Cameron's cross-motion for 
equitable credit for items he purchased for the children in the 
years between the divorce and these motions.  The court set 
Cameron's prospective support payments at a flat rate of 
$2,500.00 per month, instead of maintaining the prior percentage 
formula.  The $2,500 was determined to be the approximate 
equivalent of 29% of Cameron's current income, but an amount 
more easily calculated.  The prospective support amount is not 
at issue in this review. 
¶5 
Cameron argued that the court could retroactively 
reduce the child support order, based on our holding in Schulz 
                     
4  Wis. Stat. § 767.25 (2) The court may protect and promote 
the best interests of the minor children by setting aside a 
portion of the child support which either party is ordered 
to pay in a separate fund or trust for the support, 
education and welfare of such children. 
All future statutory references are to the 1993-94 volume unless 
otherwise noted. 
5  The circuit court also determined that Cameron's child support 
obligation for 1994 would be calculated consistent with its 
decision based on $30,000.00 per year.  It is not clear from the 
circuit court's decision whether any 1994 arrearages were to be 
placed in the trust or paid to Wise outright.  
 
 
No. 95-0311 
 
4
v. Ystad, 155 Wis. 2d 574, 456 N.W.2d 312 (1990), as applied to 
support orders entered before August 1, 1987.  See Wis. Stat. 
§ 767.32(1m)(1985-86).  The circuit court found that Cameron 
failed to meet the Schulz criteria for retroactive reduction. 
¶6 
Finally, the circuit court addressed disposition of 
the arrearages owed.  The court's solution, originally proposed 
by Cameron, was to create a trust funded by the arrearages, 
including interest, owed by Cameron.  The funds were to be 
placed in the trust for the benefit of the children.  The 
circuit court provided that Wise and Cameron would own the 
trust, but the court would control the disbursements. 
¶7 
Before deciding to impose the trust, the court found 
that Cameron's business was continuing to operate profitably.  
The court went on to say that it had "no way of knowing how 
profitable the corporation will be in the future."  The court 
specifically found "that the specialty coffee business is 
volatile.  Mr. Cameron's income could change substantially.  
There is no certainty that his income will continue to 
increase."  The court concluded that "[a] trust assures the 
children, as best can be expected, sufficient resources for 
their support in the event James Cameron is unable to provide 
for the children" at the rate of $2,500.00 per month.   
¶8 
Wise appealed.  The court of appeals upheld the lower 
court's authority to establish the trust, citing Resong v. Vier, 
157 Wis. 2d 382, 391-92, 459 N.W.2d 591 (Ct. App. 1990).  The 
court of appeals concluded that once support has been awarded 
absent a trust, the circuit court must apply a "necessary to the 
best interest of the child" standard before imposing a trust 
under Wis. Stat. § 767.25(2).  197 Wis. 2d at 625.  The 
 
 
No. 95-0311 
 
5
appellate court further held that a circuit court may impose a 
trust on support arrearages if it makes the proper factual 
findings.  Id. at 626.  Such findings are those which 
demonstrate 
that 
the 
trust 
is 
necessary 
to 
protect 
the 
children's best interests.  Id. 
¶9 
When the circuit court set up the trust here, it 
considered factors set out in Wis. Stat. § 767.25(1m),6 but 
                     
6  Wis. Stat. § 767.25(1m)(1993-94) provides: 
Upon request by a party, the court may modify the amount of 
child support payments determined under sub. (1j) if, after 
considering the following factors, the court finds by the 
greater weight of the credible evidence that use of the 
percentage standard is unfair to the child or to any of the 
parties: 
(a) The financial resources of the child. 
 
(b) The financial resources of both parents as 
determined under s. 767.255. 
 
(bj) Maintenance received by either party. 
 
(bp) The needs of each party in order to support 
himself or herself at a level equal to or greater than that 
established under 42 USC 9902(2). 
 
(bz) The needs of any person, other than the child, 
whom either party is legally obligated to support. 
 
(c) The standard of living the child would have enjoyed 
had the marriage not ended in annulment, divorce or legal 
separation. 
 
(d) The desirability that the custodian remain in the home 
as a full-time parent. 
(e) The cost of day care if the custodian works outside the 
home, or the value of custodial services performed by the 
custodian if the custodian remains in the home. 
(ej) The award of substantial periods of physical placement 
to both parents. 
(em) Extraordinary travel expenses incurred in exercising 
the right to periods of physical placement under s. 767.24. 
(f) The physical, mental and emotional health needs of the 
child, including any costs for health insurance as provided 
for under sub. (4m). 
 
(g) The child's educational needs. 
 
(h) The tax consequences to each party. 
 
(hm) The best interests of the child. 
 
(hs) The earning capacity of each parent, based on each 
parent's education, training and work experience and the 
availability of work in or near the parent's community. 
 
(i) Any other factors which the court in each case 
determines are relevant. 
Although the circuit court here did not specifically cite Wis. 
Stat. § 767.32(2m) (1993-94), that statute authorizes the court 
to consider the factors set out in Wis. Stat. § 767.25(1m) when 
considering a request for modification of support. 
 
 
No. 95-0311 
 
6
essentially based its decision to impose a trust on a single 
finding.  Specifically, the circuit court found that there was a 
potential for Cameron's income from his coffee business to 
change substantially over the remaining years of his children's 
minority.  The court of appeals acknowledged that the circuit 
court did not explicitly find that the trust imposed on 
Cameron's arrearages was "necessary to the best interest of the 
children."  Nevertheless, the appellate court affirmed the lower 
court by concluding that the circuit court's reasoning satisfied 
that standard, and that imposition of the trust on Cameron's 
arrearages was a reasonable exercise of the court's discretion.7  
¶10 The question before us is under what circumstances a 
circuit court can impose a trust on child support arrearages 
stemming from a support order entered before August 1, 1987.  
See Wis. Stat. § 767.32(1m), Schulz, 155 Wis. 2d 574.  We do not 
address the propriety of imposing a trust on arrearages stemming 
from a child support order entered after that date.  Neither 
party contends that the circuit court lacked authority to find 
that Cameron owed arrearages under the original support order.  
The question is whether the imposition of a trust on those 
arrearages is appropriate in the absence of any evidence to 
support a finding that Wise either consented to the trust, or 
was unable or unwilling to wisely manage those arrearages. 
¶11 Placing support arrearages in a trust jointly owned by 
the parents and controlled by the court is a substantial 
                     
7  Wise also appealed the circuit court's decision to permit 
Cameron's $6,000.00 contribution toward her attorney's fees to be 
taken from the trust.  The court of appeals reversed this part of 
the lower court order, Cameron v. Cameron, 197 Wis. 2d 618, 630, 
541 N.W.2d 164 (Ct. App. 1995), and Cameron does not raise it as 
an issue here. 
 
 
No. 95-0311 
 
7
alteration of the custodial parent's decision making authority. 
 After a review of the statutes and cases concerning child 
support and child custody matters, we conclude that statutory 
and case law do not directly control our answer to this 
question.  However, we discern from those sources a legislative 
scheme focusing on the best interests of the children, and also 
taking into consideration the needs and abilities of the 
custodial parent, and the financial circumstances of both 
parents.   
¶12 The circuit court has discretion to determine and 
adjudge the amount a person should reasonably contribute to the 
support of his or her child, and shall also determine how that 
sum should be paid.  Wis. Stat. §§ 767.25, 767.08(2)(b).  The 
court properly exercises its discretion when it considers the 
needs of the primary custodian and the children, as well as the 
ability of the other parent to pay.  Jacquart v. Jacquart, 183 
Wis. 2d 372, 381, 515 N.W.2d 539 (Ct. App. 1994). 
¶13 As in the case of a modification of a support order, 
we will uphold the circuit court's imposition of a trust on 
arrearages stemming from a support order entered before August 
1, 1987 if the court examined the relevant facts, made the 
proper findings, applied a proper standard of law and reached a 
conclusion that a reasonable judge could reach.  See Mary L.O. 
v. Tommy R.B., Jr., 199 Wis. 2d 186, 193, 544 N.W.2d 417 (1996). 
 Absent the required findings, we may independently review the 
record.  See Kastelic v. Kastelic, 119 Wis. 2d 280, 285, 350 
N.W.2d 714 (Ct. App. 1984).  When there is a failure to make 
findings of fact, we may affirm the judgment if it is clearly 
supported by a preponderance of the evidence, reverse the 
 
 
No. 95-0311 
 
8
judgment if it is not so supported, or remand for the making of 
findings and conclusions.  State v. Williams, 104 Wis. 2d 15, 
22, 310 N.W.2d 601 (1981). 
¶14 Finally, if an exercise of discretion is based upon an 
error of law, the circuit court has acted beyond the limits of 
its discretion and its decision will not stand.  Resong, 157 
Wis. 2d at 387. Our decision in Schulz requires us to consider 
whether the circuit court erroneously exercised its discretion 
by ordering that the arrearages be placed in a trust available 
for the future needs of the minor Cameron children, instead of 
regarding the arrearages as presently due and owing.  155 Wis. 
2d at 583. 
¶15 We first consider the statutory scheme for child 
support and custody.  When the court grants a divorce, it may 
order either or both parents to pay an amount reasonable or 
necessary to fulfill a duty to support a child.  Wis. Stat. 
§ 767.25(1)(1987-88).8  Except as otherwise provided, the court 
shall determine child support payments by using a percentage 
standard set by the department of health and social services.  
Wis. Stat. § 767.25(1j).  A party ordered to pay child support 
under ch. 767, Stats., shall pay simple interest at the rate of 
1.5% per month on any amount unpaid.  Wis. Stat. § 767.25(6).  
                     
8  
767.25  Child support. (1) Whenever the court approves 
a stipulation for child support under s. 767.10, enters a 
judgment of annulment, divorce or legal separation, or 
enters an order or a judgment in an action under s. 
767.02(1)(f) or (j) or 767.08, the court shall do all of the 
following: 
(a) Order either or both parents to pay an amount reasonable 
or necessary to fulfill a duty to support a child.  The 
support amount may be expressed as a percentage of parental 
income or as a fixed sum, or as a combination of both in the 
alternative by requiring payment of the greater or lesser of 
either a percentage of parental income or a fixed sum. 
 
 
No. 95-0311 
 
9
In Wisconsin, there is an expectation that the primary custodian 
shares his or her income directly with the children.  Wis. Adm. 
Code ch. HSS 80 Preface (1995); Cook v. Cook, 560 N.W.2d 246, 
253, n.13, __ Wis. 2d ___ (1997).  When a court initially orders 
support payments, it may protect the minor children's best 
interests by establishing a separate fund or trust for the 
support, education and welfare of the children.  Wis. Stat. 
§ 767.25(2).  
¶16 A circuit court may modify the amount of child support 
due under an order or judgment providing for child support 
pursuant to  Wis. Stat. § 767.32(1).  Schulz, 155 Wis. 2d at 
593.  Prior to August 1, 1987, circuit courts could in their 
discretion 
retroactively 
modify, 
reduce, 
or 
eliminate 
an 
accumulated child support arrearage upon a showing of cause or 
justification.  Schulz, 155 Wis. 2d at 593-94, citing Anderson 
v. Anderson, 82 Wis. 2d 115, 119, 261 N.W.2d 817 (1978); Rust v. 
Rust, 47 Wis. 2d 565, 570, 177 N.W.2d 888 (1970).  Under prior 
statutory provisions, the retroactive modification of child 
support arrearages was a discretionary remedy calculated to 
provide a just result in light of all the circumstances.  
Schulz, 155 Wis. 2d at 599.  The question before us does not 
concern a modification of the current support order.  If that 
were the case, we would follow the support modification statute, 
Wis. Stat. § 767.32(1). 
¶17 A trust is permissible when it meets the best interest 
of the child.  Wis. Stat. § 767.25(2).  It is not clear from the 
language of Wis. Stat. § 767.25(2) whether it applies only to 
trusts established by the original order for support.  The 
placement of this provision in the section entitled Child 
 
 
No. 95-0311 
 
10
support, and not within Wis. Stat. § 767.32, Revision of certain 
judgments, suggests a legislative approval of trusts established 
as part of the original support scheme.  The statutes, however, 
do not explicitly preclude the imposition of a trust as a 
repository for support arrearages. 
¶18 Concluding that no statute controls the parameters for 
imposition of such a trust, we next consider relevant common 
law.  Schulz did not address the use of a trust as a 
discretionary 
remedy 
for 
disposition 
of 
child 
support 
arrearages.  One month after our decision in Schulz, the court 
of appeals considered the imposition of a trust on child support 
arrearages in Resong, 157 Wis. 2d 382. 
¶19 In Resong the plaintiff and defendant divorced after 
24 years of marriage.  The court ordered the husband to pay a 
set monthly amount in child support for their three minor 
children.  He failed to remain current in those payments and the 
wife later sought to collect the arrearages.  At that point the 
husband moved to reduce his child support obligation from 17% of 
his gross income to 17% of his salary only.  Alternatively, he 
asked that some of the support money be placed in a trust for 
the post-majority education of the couple's remaining minor 
child.  157 Wis. 2d at 385. 
¶20 The circuit court determined that the existing support 
order of $900 month was not necessary for the last child's 
support, but declined to reduce the husband's obligation.  
Instead, the court ordered all monthly payments over $600 placed 
in a trust for the child's college education.  Id. at 385-86. 
¶21 The Resong court of appeals held that the lower court 
erred in considering the child's post-majority expenses when it 
 
 
No. 95-0311 
 
11
set the current child support.  157 Wis. 2d at 385.  On that 
basis, the court of appeals reversed the order and remanded for 
further proceedings.  Id.  The Resong court then turned to the 
establishment of the trust.  Id. at 391. 
¶22 The Resong court cautioned that imposition of a trust 
should not be undertaken lightly.  Resong drew a parallel 
between eliminating a custodial parent's right to make spending 
decisions and the gravity of altering the parent's custodial 
power.  Id. at 391-92.  In dicta, the Resong court concluded 
that once support has been awarded absent a trust, the circuit 
court must apply the "necessary to the best interest of the 
child" standard of the custody modification statute if it wishes 
to establish a child support trust.  Id. at 392.  We draw from 
Resong the admonition that when such a substantial alteration in 
the decision making authority of a parent is proposed, a court 
should exercise restraint.  
¶23 Two cases decided after Resong considered imposition 
of a trust as part of the original support order. In Hubert v. 
Hubert, 159 Wis. 2d 803, 811, 465 N.W.2d 252 (Ct. App. 1990), 
the trust was designated for the post-majority education needs 
of the children.  There, the former husband was a highly paid 
cardiac surgeon and the custodial parent sought a percentage of 
her former husband's gross income as child support.  She also 
asked that part of that percentage be placed in a trust for 
their children's post-majority education.  Hubert, 159 Wis. 2d 
at 813.  The circuit court set support at $4,000 per month, 
ruling that application of the percentage formula would be 
unfair to the payor.  The court also held that it lacked 
 
 
No. 95-0311 
 
12
authority to impose a trust for post-majority needs.  Id. at 
813. 
¶24 The Hubert court of appeals first criticized the lower 
court's imposition of a flat monthly support amount.  According 
to the court of appeals, the circuit court in Hubert failed to 
consider certain statutory factors when it deviated from the 
percentage standard.  159 Wis. 2d at 815.  The circuit court 
gave no explanation as to why the children should not be 
supported at the economic level they would have enjoyed had 
there been no divorce, only stating that it "would be absurd" to 
continue to maintain the children at that same standard of 
living.  Id. at 815.  Instead, the circuit court established 
child support in the amount the father volunteered to pay, 
without an independent examination of all of the relevant 
statutory factors.  This determination, according to the court 
of appeals, was arbitrary and not reasoned from the facts in the 
record.  Id. 
¶25 The Hubert court next addressed the custodial parent's 
request for imposition of a trust.  The court of appeals held 
that a court has discretion under Wis. Stat. § 767.25(2) to 
create a trust for post-majority needs, as long as the funds are 
paid to the trust during the children's minority.  Id. at 817.  
Unlike the facts in Resong, in Hubert it was the primary care 
giver who requested the trust.  Thus there arose no "specter of 
the court altering the authority of the custodial parent or 
stripping her of her decision-making authority."  Id. 
¶26 Similarly, in the most recent case affirming a trust 
as part of the original support order, we were not asked to 
strip the custodial parent of decision-making authority.  Mary 
 
 
No. 95-0311 
 
13
L.O., 199 Wis. 2d 186.  There we focused on use of the 
percentage standard of Wis. Stat. § 767.51(4m) when a court 
orders child support in a paternity action.  The child's father 
was a professional football player with an exceptionally high 
current income but a limited career span expectancy.  Id. at 
190.  Because the funds might not be available later, the lower 
court ruled that the child's best interests were served by 
ordering the father to pay child support according to the 
percentage guidelines.  On review we concluded that the 
application of the percentage standard in Mary L.O. was not an 
erroneous exercise of the circuit court's discretion to fashion 
a child support order serving the child's best interests.  Id. 
at 199. 
¶27 The second issue in Mary L.O. was whether the circuit 
erred by imposing a trust on the monthly support payments in 
excess of $1,500.00. Id. at 200.  We held there that the trust 
was permissible under Wis. Stat. § 767.51(5)(e), a paternity 
statute, but that any trust payments must be made from child 
support paid while the child is still a minor.  Id. at 201. 
¶28 Among the key distinctions between Mary L.O., Hubert, 
and this case is that in Mary L.O. and Hubert the custodial 
parent did not object to the trust.  In Mary L.O. and Hubert, 
the trust was imposed solely on prospective support money and 
not on arrears.  Moreover, part of the Mary L.O. trust fund was 
a liquid "discretionary fund" from which the custodial parent 
could make the decision to withdraw money without prior approval 
of the non-custodial parent.  199 Wis. 2d at 192.  Finally, in 
Mary L.O. the circuit court found that the father's high income 
as a professional football player was for a limited duration.  
 
 
No. 95-0311 
 
14
The father's ability to continue to support his child, based on 
his education and prior work experience, was questionable.  Id. 
at 195-96.  Based on all of the above distinctions, affirmance 
of the trusts established in Mary L.O. and Hubert does not 
require affirmance of the trust here. 
¶29 We conclude that no statute or prior case law directly 
controls the question before us.  We are persuaded, however, 
that the standard articulated in Resong, as we modify it here, 
is appropriate for assessing the limited circumstances under 
which a trust may be imposed on child support arrearages 
stemming from a support order entered before August 1, 1987.  
The Resong standard involves determining whether the trust is 
necessary to the best interests of the child, parallel to the 
statutory scheme for child custody matters.  Today we modify 
that standard, to require a determination only that the trust is 
in the best interests of the child.  We draw upon another 
principle from the statutes governing revision of custody orders 
to establish the required burden of proof.9  When a non-custodial 
parent seeks imposition of a trust on arrearages owed, that 
parent must demonstrate by substantial evidence that the trust, 
which substantially alters the custodial parent's decision 
making authority, is in the best interests of the children.  See 
Wis. Stat. § 767.325(1).10 
                     
9  Although here we draw upon principles identified in the 
revision of custody and placement statute, Wis. Stat. § 767.325, 
we do not transplant its requirements governing the timing and 
manner of custody modifications to the imposition of trusts on 
child support arrearages.  
10  Wis. Stat. § 767.325 Revision of legal custody and physical 
placement orders. 
(1) SUBSTANTIAL MODIFICATIONS. (a) Within 2 years after 
initial order.  Except as provided under sub. (2), a court 
may not modify any of the following orders before 2 years 
after the initial order is entered under s. 767.24, unless a 
 
 
No. 95-0311 
 
15
¶30 The Resong standard which we adopt as modified also 
requires, when the primary custodian does not consent to the 
trust, a factual finding as to whether the primary custodian was 
incapable or unwilling to wisely manage the child support money. 
 Without such a finding, a court may not strip the primary 
custodian of his or her decision-making authority.   
¶31 There are several reasons for our conclusion that the 
circuit court erred when it imposed a trust on the arrearages 
owed by Cameron.  First, unlike the custodial parents in Mary 
L.O. and Hubert, Wise did not consent to imposition of a trust 
on the support money owed. 
                                                                  
party seeking the modification, upon petition, motion, or 
order to show cause shows by substantial evidence that the 
modification is necessary because the current custodial 
conditions are physically or emotionally harmful to the best 
interest of the child: 
 
1. An order of legal custody. 
 
2. An order of physical placement if the modification 
would substantially alter the time a parent may spend with 
his or her child. 
 
(b) After 2-year period.  1. Except as provided under 
par. (a) and sub. (2), upon petition, motion or order to 
show cause by a party, a court may modify an order of legal 
custody or an order of physical placement where the 
modification would substantially alter the time a parent may 
spend with his or her child if the court finds all of the 
following: 
a. The modification is in the best interest of the 
child. 
b. b. There has been a substantial change of 
circumstances since the entry of the last order 
affecting legal custody or in the last order 
substantially affecting physical placement. 
2. With respect to subd. 1, there is a rebuttable 
presumption that: 
a. Continuing the current allocation of decision making 
under a legal custody order is in the best interest of the 
child. 
b. Continuing the child's physical placement with the parent 
with whom the child resides for the greater period of time 
is in the best interest of the child. 
3. A change in the economic circumstances or marital status 
of either party is not sufficient to meet the standards for 
modification under subd. 1. 
 
 
No. 95-0311 
 
16
¶32 Second, the circuit court failed to make, and the 
court of appeals failed to require, any factual findings 
suggesting that Wise was incapable or unwilling to wisely manage 
the child support money.  Resong, 157 Wis. 2d at 392.  To the 
contrary, the circuit court found that Wise was running her own 
business successfully and appeared to be an astute business 
person 
when 
testifying. 
 
Despite 
Cameron's 
significant 
underpayment of his child support obligation, the minor Cameron 
children "got along" under Wise's management of the $7,000 or 
$8,000 per year Cameron  supplied, and her own resources. 
¶33 Third, Cameron requested the trust, but failed to show 
by substantial evidence that a trust substantially altering the 
decision making authority of the primary custodial parent, was 
in the best interests of the children. 
¶34 Thus, under the Resong standard that we modify here, 
it was an erroneous exercise of discretion for the circuit court 
to dictate how the arrearages owed by Cameron should be 
controlled.  In the absence of any findings that Wise consented 
to the trust, or was unable or unwilling to wisely manage the 
support money, it is in the best interest of the children to 
leave the decision-making authority over the support arrearages 
solely to Wise, the primary custodian. 
¶35 Cameron argues that the children have "gotten along" 
over the years and thus he should not be forced to pay the 
arrearages.  This argument flies in the face of the original 
support order and also disregards the standard of living to 
which children of divorced parents are entitled.  When a court 
sets an amount of child support, it is bound to consider the 
needs of the children, the needs of the parent with primary 
 
 
No. 95-0311 
 
17
physical placement, and the ability of the other parent to pay. 
 Edwards v. Edwards, 97 Wis. 2d 111, 116, 293 N.W.2d 160 (1980). 
 The court also considers the level of subsistence and comfort 
in everyday life that was enjoyed by the children because of 
their parents' financial resources.  Hubert, 159 Wis. 2d at 815 
n.2. 
¶36 The standard of living for children of divorced 
parents is not capped at the standard of living enjoyed at the 
time of divorce.  It accomodates the parents' subsequent 
financial prosperity or adversity.  The standard is simply that 
which 
the 
children 
would 
have 
enjoyed 
had 
the 
marriage 
continued.  Wis. Stat. § 767.25(1m)(c).  See also Sommer v. 
Sommer, 108 Wis. 2d 586, 590, 323 N.W.2d 144 (Ct. App. 
1982)(children are entitled to share in the "fruits of post-
divorce economic improvements" of their parents). 
¶37 The interests of children of divorced parents are at 
the heart of our child support system. Greenwood v. Greenwood, 
129 Wis. 2d 388, 392, 385 N.W.2d 213 (Ct. App. 1986).   While 
the children's interests are the focus, parents have cognizable 
interests too.  For example, the purpose of imposing interest on 
unpaid child support obligations is to encourage prompt payment 
of current support "for the benefit of the child and the 
custodial parent."  Greenwood, 129 Wis. 2d at 392-93 (emphasis 
added).  Another purpose of the interest requirement is to 
provide some compensation for "recipients" who do not receive 
timely payments.  See Greenwood, 129 Wis. 2d at 393.  There are 
important policy reasons for the legislature's encouragement of 
timely support payments.  "Payment of past due arrearages is ... 
to be encouraged, for not only have the child and the custodial 
 
 
No. 95-0311 
 
18
parent been deprived of the payments over time, but the 
noncustodial parent, contrary to court order, has enjoyed the 
use and benefit of those funds."  Id.  Other jurisdictions hold 
a similar perspective. 
 
"If one parent is allowed to improvidently close his 
eyes and wallet to his obligations so as to require 
the other parent to utilize an added portion of his or 
her assets or income to fill that void, the children's 
right to adequate support is effectively diminished. . 
. . To the extent that the (custodial parent) has been 
forced to expend child support funds for (obligations 
of the noncustodial parent) that otherwise would have 
been available for other needs, the court must 
conclude that the 'best interests' of (the children) 
have been impaired by the defendant's conduct." 
Hoefers v. Jones, 672 A.2d 1299, 1306-07 (N.J. Super Ct. Ch. 
Div. 1994), aff'd, 672 A.2d 1177 (N.J. Super Ct. App. Div. 
1996).   
¶38 Thus we conclude that in this case, the order of the 
circuit court 
establishing 
the trust 
improperly 
benefited 
Cameron, the parent responsible for the arrearages.  Wise was 
forced to meet a large part of Cameron's child support 
obligation for at least the years 1987 through 1993 with her own 
resources. 
¶39 A circuit court may enforce an order for child support 
by contempt proceedings, an account transfer under s. 767.267, 
or through other enforcement mechanisms as provided under s. 
767.30.  Wis. Stat. § 767.08(2)(c).  Were we to uphold the trust 
mechanism in this case, we would indeed be converting support 
law to "a sort of sporting lottery."  Schulz, 155 Wis. 2d at 606 
(Day, J., dissenting).  Upholding the trust here would signal 
non-custodial parents that non-payment of support is worth the 
gamble, because once arrearages reached a certain magnitude the 
court might return at least partial ownership of the support 
 
 
No. 95-0311 
 
19
money to the delinquent payor in the form of a trust.  We will 
not sanction such gamesmanship at the expense of children, 
primary custodians who meet their obligations, and the taxpaying 
public.  When the non-custodial parent seeks a trust on 
arrearages, he or she must prove by substantial evidence that a 
substantial alteration in the decision making authority of the 
primary custodian is in the best interests of the children. 
¶40 We need not consider that part of the court of 
appeals' decision concerning final disposition of any remaining 
trust 
funds 
after 
the 
Cameron 
children 
reach 
majority.  
Nonetheless, we observe that the court of appeals left open the 
possibility that unspent arrearages will be returned to Cameron. 
 This possibility circumvents the circuit court's refusal to 
reduce the originally ordered support amount. 
¶41 The circuit court erred in one other regard.  It acted 
to dispose of the past amounts owed by gauging the future 
support needs of the Cameron children.  We do not doubt that the 
circuit court was attempting to serve the best interests of the 
children when it found that Cameron's coffee business was 
volatile.  Nevertheless, we discern no basis in the record for 
the court's finding. 
¶42 The fact that Cameron had little income from his 
business in the early years does not support the finding that 
his business, operating profitably for the last several years, 
will at some point in the future take a serious downward turn, 
or cease altogether as was likely under the facts of Mary L.O.  
We are hard pressed to identify any businessperson possessing a 
"certainty that his income will continue to increase."  The mere 
 
 
No. 95-0311 
 
20
lack of certainty does not supply the evidentiary foundation for 
a finding of business volatility. 
¶43 A trust funded with money earmarked for past needs is 
not the proper mechanism by which to address future support 
needs.  The modification mechanism of Wis. Stat. § 767.32(1) 
remains available to Cameron should he, in the future, contend 
that circumstances have changed such that he is unable to meet 
his current support obligation of $2,500 per month. 
¶44 Thus, for all of the above reasons, we reverse the 
decision of the court of appeals affirming the order of the 
circuit court imposing a trust on support arrearages stemming 
from a support order entered before August 1, 1987.  In 
establishing the trust without Wise's consent, the circuit court 
failed to make any factual findings regarding Wise's ability and 
willingness to wisely manage the support money.  The circuit 
court also misapplied the law in this case by using a trust 
mechanism, funded by arrearages, to meet potential future 
support needs. 
By the Court.


The decision of the court of appeals is 
reversed and the cause remanded to the circuit court to vacate 
the order imposing the trust and for further proceedings 
consistent with this opinion.