California courts typically look at both the kid’s needs and the parents’ ability to pay when considering child support after a divorce. The second factor often centers on the former spouses’ incomes, but sometimes that figure doesn’t tell the whole story. The Second District Court of Appeals recently considered a case in which one spouse had at least some of his money tied up in fancy artwork.
Husband and Wife separated in March 2011, following nearly four years of marriage in which they had one child. They later entered into a marital settlement agreement, where Husband agreed to pay Wife $600,000 over a certain period of time in exchange for Wife waiving her right to spousal support, and to pay $1,500 per month in child support. The spouses agreed to share legal and physical custody of their daughter, with the child staying with Husband three nights a week.
A trial court in June 2014 granted Husband’s request to increase his time with Daughter and to give him sole legal custody for the purpose of Daughter’s therapeutic treatment. The child suffered developmental delays as a baby and had been in therapy ever since. Wife had recently been treated for alcoholism and bipolar disorder, and Husband was concerned that the child wasn’t getting to school or her therapy appointments. The court also granted Wife’s request to increase child support, but it raised the amount to just over $2,000 instead of to the $6,000 per month that Wife sought.
On appeal, Wife argued that the trial court failed to take into account the value of Husband’s art collection in considering his ability to pay child support. Husband worked primarily as a music supervisor, according to the Second District, but he also collected and sometimes sold art. The appeals court said the increase in the value of artwork that Husband hadn’t yet sold is not usually something that’s considered income when considering child support. “Generally, the types of income specified in the statute consist of money that the support obligor actually receives, and do not include unrealized increases in the value of assets,” the Court said.
Although a judge can also consider a parent’s earning capacity in setting child support, often where a parent is underemployed, the Court said the decision is left to the trial court’s discretion. And in some cases, turning a blind eye to a parent’s decision to invest money in non-income producing assets could be an abuse of that discretion. In this case, however, the Court said there was no reason to believe that Husband was trying to hide his money by investing it in art. “Instead, the evidence was that [Husband] used his art collection to generate a consistent level of income, which he used, among other things, to support [Daughter],” the Court said.
The division of assets and debts, child custody and visitation, child support and spousal support are the issues that must be addressed in any divorce. It seems apparent that in this case, the parents could have saved themselves a considerable amount of emotional and financial pain if they had been able to sit down together and create solutions that worked for both of them and their daughter. Even a case litigated at the Superior Court level is very costly and to go up to the level of the Court of Appeals is astronomically costly.
With offices throughout the Bay Area, California family law lawyer Lorna Jaynes approaches divorce cases as a problem to be solved collaboratively, not a battle to be won. She handles each case personally, taking the time to understand each individual client’s needs and interests and explaining the various options for resolving these matters. Call us at (510) 795-6304 or contact us online to set up an appointment.
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