Alimony & Spousal Support

Inheritance Is Not Income When Calculating Support Obligations

In the family law, spousal support and child support case of Schader v. Schader, PICS Case No. 14-1318 (C.P. Delaware, Aug. 6, 2014) the Honorable Barry C. Dozor found that it had sufficient evidence of appellee’s income, did not incorrectly fail to consider how he paid his support obligation, and did not err in not including his inheritance as income.

Appellant-wife and appellee-husband were married in 1985. They separated in 2007. A final order of equitable distribution was entered in May 2013. The divorce decree was entered in August 2013. Appellant earned a high school equivalency degree and had no earning capacity. Appellee was a licensed dentist. He owned a building in Philadelphia that had housed his dentistry practice. After he sold his practice, he continued to receive rental income. He also received an inheritance from both his parents.

Appellee filed a petition to modify spousal support. A hearing was held on April 10, 2014, at which both parties and the officer manager of Newton Orthodontics, appellee’s new employer, testified.

The resultant order provided that, due to the fluctuations in appellee’s income in 2013, there were three periods that had to be addressed. For each period, the court determined appellee’s support obligation and arrearages. The order also provided that appellee was to pay for appellant’s existing medical insurance or for the full term COBRA was available to her. Appellant appealed the final order of support entered in April 30, 2014.

The court rejected appellant’s contention that it incorrectly relied on appellee’s testimony and evidence related to his income because there was no 2013 tax return provided at the April 10, 2014 hearing. It found that at no time prior to or during the hearing did appellant argue that appellee’s 2013 tax return was necessary such that a continuance should be granted. Further, the court found that if appellant had requested a continuance, it would not have been granted because the court was able to determine appellee’s income based on the credible testimony and extensive evidence presented. The court also noted that it was able to determine that from April 2014 until at least Dec. 31, 2014, appellee’s gross income had increased to an average of $283,000 yearly, almost double the earning capacity set in the final equitable distribution order.

The court next found that the record unambiguously contradicted appellant’s contention that the support order should be vacated and the case remanded for a new hearing because the court had not considered that appellee had improperly paid his support obligation using income from his rental property. The court said where or how appellee paid his obligation was not an issue to be properly raised in support court. Rather, it was the court’s obligation to determine the amount of support and whether appellee had failed to meet his obligation, which it did. Thus, it did not err in failing to find appellee in contempt for paying support from the escrowed rental account. The court noted that it had strongly cautioned him to stop doing so.

Finally, the court found that appellee’s significant inheritance should have been considered income for support purposes. Noting that the Pennsylvania Supreme Court had consistently held that while the corpus of an inheritance could not be considered “income” to calculate child support, appellee’s inheritances would not be so considered for calculation spousal support. As to whether it should have been considered to affect the presumptive amount of support determined by the guidelines, the court found no reason to deviate from the guidelines where the parties’ children were emancipated and appellee continued to pay the mortgage on the marital residence where appellant resided, her COBRA expenses, and support of nearly $6,400 per month.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 37 PLW 814 (August 26, 2014)

Filed Under: Child Support, Spousal Support, and Inheritance.

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