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GIFTS vs. CHILD SUPPORT

If you are paying or receiving child support, it is likely that you have questions shared by many people in your situation. Whether you agree to pay or receive child support, or if the court imposes child support to be paid by you or to you for your children, it is essential that you have an understanding as to how child support works. Parents often want to know the difference between gifts vs. child support, how cash gifts to children are treated and what child support is supposed to be used for in NJ.  

Do gifts from parents count as support?

If you are the person paying child support, also referred to as the “payor,” make sure that you know what you are obligated to contribute toward for your child, and more importantly, how anything that you pay or provide in addition to your child support obligation will be treated. This may be especially important during the holidays.  

So what does child support cover? Giving money as a gift to children or giving money in lieu of gifts will generally not be considered child support. Also, giving money to your child will not constitute payment of child support. In New Jersey, child support is the right of the child. Generally, a parent cannot choose to waive child support because it is the responsibility of the parents to provide the child with a lifestyle commensurate with that of both of the parents. Providing your child with toys, money, gifts or even opening a trust fund for a child will not usually constitute child support payments, even if that is the intention of the payor. If you have an agreement with your former spouse that requires payment of child support, you cannot unilaterally make a choice about how and when and in what manner you will pay support.  If there is not an agreement, the court will determine how and when and in what manner support is to be paid for your child. Understanding the difference between gifts v. child support will make this process easier for you. 

In New Jersey, child support is calculated based upon the New Jersey Child Support Guidelines. There are times based upon the incomes of the parties that the child support amount calculated by the Guidelines may be increased or decreased. The Guidelines include a component for shelter, clothing, food, entertainment and other necessary expenses for the child. There may be additional payments outside of the Guidelines calculation, which may include contribution toward unreimbursed medical expenses, extraordinary extracurricular expenses, summer camp and work related child care costs. Child support is calculated based upon the parenting schedule, the incomes of both parties, and certain other financial information. There may be times when gifts could be factored into the child support calculation at the Court’s discretion. Gifts v. child support will be analyzed by the court in these situations.

Gifts vs. child support when setting up a trust fund for a minor

Be careful about making presumptions when you decide to put money in trust for a child. At times, people use a trust as an alternative mechanism to pay child support. It is best to obtain proper guidance from an experienced attorney who can provide guidance to you on establishing a trust. You also want to ensure that there is consent from the other parent or approval from the court when necessary to avoid future issues.

Questions often arise concerning the maintenance of bank accounts when contemplating the analysis of gits v. child support. Common inquiries include Can a parent take money out of a child’s savings account? Can a parent take money out of a custodial account? Can a parent close a child’s bank account and do parents own their children’s money? If an account exists at the time of  a divorce, it should be handled as part of the dissolution of the marriage to avoid confusion going forward and to ensure that there is an understanding by everyone involved as to how the funds will be treated and who will be able to access the funds and make decisions concerning how they will be used.

If you have questions related to support that you pay or receive for your child, contact our team of family law practitioners at DeTorres & DeGeorge. We can provide guidance on all issues concerning payment of child support , child custody issues, and gifts v. child support so that you are prepared and are able to provide for your child in the manner in which you choose. Contact us today.