Opinion ID: 852430
Heading Depth: 2
Heading Rank: 3

Heading: Are Payments Under a Property Settlement Included for Child Support Calculations?

Text: As part of the division of marital property, Timothy agreed to pay Marla maintenance of $565,000 at 6.5% interest over fifteen years. [2] The trial court deducted this yearly payment from Timothy's income in its child support computation. Marla argues that payments made pursuant to marital property settlements should not be deductible for child support purposes. The commentary to the guidelines address the issue of spousal maintenance and property settlements in the context of payments made to a party's former spouse (i.e., a former spouse who is not the parent of the child whose support is being determined). The commentary to the guidelines states: The worksheet provides a deduction for spousal maintenance paid as a result of a former marriage. . . . Caution should be taken to assure that any credit taken is for maintenance and not for periodic payments as the result of a property settlement. . . . No such deduction is given for amounts paid by an obligor as the result of a property settlement resulting from a former marriage. . . . Child Supp. G. 2 cmt. We see no reason why payments made pursuant to a property settlement between the parents of the child should be treated differently. Presumably, marital assets will be equitably divided between the parties to a property settlement. If one party chooses to keep the entirety of the physical assets by paying the other spouse for her share of the assets' value, the party who keeps the physical assets should not also be entitled to a deduction for the value of those assets that is being paid to the spouse. Otherwise, the party would receive the benefit of both possessing the assets and the deduction. For example, if Father decides he wants to keep the marital sofa (or the family business, for that matter) by paying Mother for half of its value, he should not be able thereafter to deduct half the value of the sofa from his income in computing child support. Otherwise, father would be double-dipping, receiving both the sofa (or the business) and the deduction. In this case, Timothy decided to keep certain marital business assets by buying out Marla's share. The fact that he kept the business assets by paying her for her portion of the businesses' value over fifteen years does not entitle Timothy to a deduction for the payments. The fact that the parties structured these payments as maintenance for tax purposes does not affect this outcome. Presumably, both parties benefited from this tax treatment. Just as the guidelines disallow deductions for payments made to former spouses as part of a property settlement, even if those payments were classified as maintenance by the parties, so too do we disallow deductions for property settlements made between a child's parents. Accordingly, Timothy is not entitled to a deduction for the payments he makes pursuant to the parties' marital property settlement when calculating his child support obligation.