Opinion ID: 2549527
Heading Depth: 1
Heading Rank: 4

Heading: Inheritance As Gross Income

Text: To determine whether an inheritance can be gross income for purposes of calculating child support, we look first to the plain language of Colorado's child support guidelines contained in the Uniform Dissolution of Marriage Act. §§ 14-10-101 to XX-XX-XXX, 5 C.R.S. (2002). Colorado's child support guidelines define gross income very broadly: Gross income includes income from any source and includes, but is not limited to, income from salaries; wages ...; bonuses; dividends; severance pay; pensions and retirement benefits ...; royalties; rents; interest; trust income; annuities; capital gains ...; monetary gifts; monetary prizes ...; and alimony or maintenance received. § 14-10-115(7)(a)(I)(A) (emphasis added). Section 14-10-115(7)(a)(I)(A) does not expressly address the term inheritance in defining gross income. However, courts have taken an inclusive approach to other one-time gains such as lottery winnings, capital gains, and personal injury settlement payments. Each is considered gross income. In re Marriage of Bohn, 8 P.3d 539 (Colo.App.2000) (lottery winnings); In re Marriage of Zisch, 967 P.2d 199 (Colo.App.1998) (capital gains); In re Marriage of Fain, 794 P.2d 1086 (Colo.App.1990) (personal injury settlement payments). Moreover, section 14-10-115(7)(a)(I)(A) specifically includes monetary gifts in gross income. A monetary inheritance is a particular form of a monetary giftit is simply testamentary, rather than inter vivos, in nature. Thus, the plain meaning of monetary gifts, and gross income, properly includes monetary inheritances. Because the language is clear, we need not look any further to support our statutory interpretation. Even assuming some ambiguity, however, a review of the legislative history reveals no legislative intent to exclude one-time monetary receipts such as inheritances from gross income. To the contrary, when the legislature rewrote the definition of gross income in 1996, it approved the inclusion of one-time cash receipts by adding large lottery winnings to the definition of gross income. See Hearings on S.B. 96-2 Before the Senate Judiciary Comm., 60th Gen. Assembly, 2nd Reg. Sess. (Mar. 12, 1996) (statement of Andrea Baugher, Colorado Division of Child Support Enforcement); see also In re A.M.D., 56 P.3d at 1186. [5] Furthermore, the statute explicitly includes monetary prizes, bonuses, capital gains, and severance pay. These sources of income can all fluctuate dramatically from year to year. From this, we conclude that the legislature understood that annual incomes vary, and it intended for gross income to reflect actual monetary receipts, even if these receipts are non-recurring windfalls or one-time events. The court of appeals acknowledged the broad statutory definition of gross income, but then interpreted our decision in In re Marriage of Nimmo, 891 P.2d 1002, 1007 (Colo.1995), to mean that if a gift is received as a one-time lump sum rather than regularly received from a dependable source, it cannot qualify as a gift under the meaning of section 14-10-115(7)(a)(I)(A). In re A.M.D., 56 P.3d at 1186. The court of appeals misconstrued Nimmo and applied its holding too broadly. Nimmo involved a discovery dispute between divorced parents. The ex-wife had remarried and was not employed outside the home. In that case, we considered whether the ex-husband was entitled to conduct discovery regarding all current and ongoing gifts received by his former wife, including without limitation, jewelry, clothes, entertainment, travel, and restaurant meals, [6] provided to her by her new husband. Nimmo, 891 P.2d at 1004. This court held that the ex-husband was entitled to conduct discovery on these gifts in order to prove that future gifts would be regularly received from a dependable source rather than speculative. Id. at 1008 (citing Barnier v. Wells, 476 N.W.2d 795, 797 (Minn.Ct.App.1991), holding that a future expected gift cannot be used to determine child support obligations unless the gift is regularly received from a dependable source). In the context of Nimmo, the trial court was calculating future child support obligations, and necessarily had to predict future gross income. Therefore, the father in that case wished to discover whether the gifts to the mother were reliable enough to project into the future. Nimmo does not apply in cases such as the one at hand, in which the trial court is calculating child support payments based on actual income received. Nimmo, in sum, does not proscribe including actual, one-time receipts in gross income. Including monetary inheritances in gross income is also consistent with cases from other states where the applicable child support statutes are very similar to that of Colorado. In Indiana, for example, where the statutory definition of gross income includes income from any source and gifts, the principal of an inheritance is considered gross income for child support purposes. Gardner v. Yrttima, 743 N.E.2d 353, 357-58 (Ind.App.2001). Likewise, in Virginia, where gross income is statutorily defined as income from all sources, and shall include, but not be limited to income from ... gifts, prizes or awards the entire inheritance is treated as gross income. Goldhamer v. Cohen, 31 Va.App. 728, 525 S.E.2d 599, 602 (2000); Forsythe v. Forsythe, 41 Va. Cir. 82 (1996). In these states, the explicit inclusion of gifts in the statutory definition of income is pivotal. See Gardner, 743 N.E.2d at 358 (holding that the court could discern no appreciable difference between one who receives property by an inter vivos gift and one who receives the same or similar property by testamentary transfer, nor can we discern a logical reason to include one [in gross income] and exclude the other); Goldhamer, 525 S.E.2d at 603 (saying that any inheritance is a gift, whether by will or intestate succession ... and not considering appellee's inheritance is contrary to the express language of the statute); Forsythe, 41 Va. Cir. 82 (An inheritance is a gift, albeit testamentary in nature. Gifts are clearly gross income under the statute.). Unlike Indiana and Virginia, several other states do not include inheritances as gross income. Importantly, however, none of these other states has a statutory definition of gross income that includes gifts. To the contrary, some even have statutes that explicitly exclude gifts and inheritances from gross income. See Humphreys v. DeRoss, 567 Pa. 614, 790 A.2d 281, 287 (2002) (emphasizing that, unlike Virginia, Pennsylvania statute does not include `gifts' in the definition of income); Cody v. Evans-Cody, 291 A.D.2d 27, 29, 735 N.Y.S.2d 181 (2001) (saying that gifts and inheritances explicitly are not income under Domestic Relations Law § 240(1-b)(e)(4)); Kern v. Castle, 75 Cal.App.4th 1442, 1453, 89 Cal.Rptr.2d 874 (1999) (declining to characterize inheritances as gross income after noting that gifts are not mentioned in California's child support guidelines); Connell v. Connell, 313 N.J.Super. 426, 712 A.2d 1266 (Ct.App.Div.1998) (declining to characterize inheritances as gross income under a child support guideline that does not include gifts as income); Gainey v. Gainey, 89 Wash.App. 269, 948 P.2d 865, 869 (1997) (holding that the corpus of an inheritance is not included in gross income because, under Washington's child support statute, `gross monthly income' does not include gifts); Nass v. Seaton, 904 P.2d 412, 415 (Alaska 1995) (Alaska statute explicitly provides that [t]he principal amount of one-time gifts and inheritance[s] should not be considered as income.). Given that none of these states defines gross income to include gifts, it comes as no surprise that their courts have interpreted their child support guidelines to exclude inheritances from gross income. Colorado's statute is clearly distinguishable from statutes that either do not include or that explicitly exclude gifts. Like Indiana and Virginia, Colorado has a statutory definition of gross income that expressly includes giftsspecifically, monetary gifts. In short, because monetary inheritances are in fact monetary gifts under the meaning of section 14-10-115(7)(a)(I)(A), and are neither future nor speculative events, we reverse the court of appeals and hold that a monetary inheritance may be included in gross income for purposes of calculating child support.