Gifts as Income in Virginia Divorce Proceedings: Diving into the Legal Implications

Gifts as Income in Virginia Divorce Proceedings: Diving into the Legal Implications

In many family law cases, clients are concerned about whether funds they receive from third parties (like family and friends) are included in their income for purposes of calculating child support and determining spousal support. This can arise in situations where a parent or family member annually gifts money to an individual or even when a family member or friend gives (but not does not loan) money to a client for purposes of assisting in attorney’s fees for divorce.

The Virginia Court of Appeals recently held that the trial court properly included gifts as income for purposes of determining spousal support and child support.

In the case, Williams v. Sykes-Williams, the intricacies of gift-derived income and its influence on spousal and child support calculations were brought to the forefront. This case revolves around a nine-year marriage resulting in four children and a lack of prenuptial or postnuptial agreements. Notably, the divorce proceedings unveiled a crucial element—a substantial gift of $52,202.07 that the husband received from his paramour's family to cover legal fees.

The Legal Dispute: Central to the legal dispute was the question of whether this gift should be considered as income when determining both spousal support and child support. The initial trial court's ruling included the full gifted amount in the husband's income calculation, leading to an appeal by the husband to the Court of Appeals of Virginia (COA).

Court of Appeals' Affirmation: The COA affirmed the trial court's decision that gifts may be considered income for two primary reasons, shedding light on how Virginia law comes into play:

  1. Relevance of Virginia Code § 20-108.1 (A): This code stipulates that the court can take into account "all evidence presented relevant to any issues." As a result, the COA affirmed that the trial court was well within its rights to consider the substantial gift as income, a pivotal factor in spousal support determination.
  2. Insight from Virginia Code § 20-108.2 (C): This specific code section expands the definition of "gross income" to encompass "gifts, prizes, or awards." Consequently, the trial court's inclusion of the gifted amount as part of the husband's income for child support calculations aligns with the clear legislative intent.

Conclusion: The Williams v. Sykes-Williams case underscores the intricate nature of divorce proceedings and the impact of gifted income on spousal and child support determinations in Virginia. Opting for a prenuptial or postnuptial agreement could mitigate your liability for spousal support, potentially enabling you to accept gifts without affecting your obligations towards a soon-to-be ex-partner.

If you would like assistance in navigating spousal or child support obligations, feel free to reach out to our Fairfax office at 703-691-4848, or simply use our online inquiry form to get in touch with us today.

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