Does inheritance affect child/spouse support?

[whirlpoollife]

I received an inheritance from my mother's trust. It was on the sale of her property.

My attorney said I have to report it to domestic relations. But on the support order it says I only need to report a change in income.  Is inheritance considered income even though it is a one time deal? 

Attorney also said any capital gains that the trust made on the sale of the property is considered an income to me, therefore, I will have to probably pay x2bh an alimony because it will exceed his current income.   What my alimony and child support is now is a small amount. So that might get eliminated from him but the thought of paying him makes my head spin. To me this is not an income like a paying job. I have lost so much money to him over the years already.

Any insight appreciated

[ForeverDad]

Perhaps you need a second opinion, perhaps from a qualified accountant?  Also, you need to know not only IF but also WHEN to report.  Do you do it after receipt or when you file your taxes?

You make a valid point that this is a one-time payment or disbursement.  Unless you anticipate additional periodic payments, you can later report your 'change' to your prior income.  Again, the question is when.

[allibaba]

You definitely need a second opinion but it needs to be from a lawyer familiar with both family law and wills etc.  I am a qualified accountant and I'm not sure.

Personally I would look into immediately rolling the assets into another trust where you are not the only beneficiary.  Maybe you would be the primary beneficiary with your children as a secondary beneficiary.

[ForeverDad]

See?  An accountant did give a wonderful idea to consider.

Meanwhile, put/keep those funds in a separate account so they stay legally/ethically separate and don't become merged with your own money.

I know retirement rollovers need to be completed within a certain number of days or months to keep their tax status, I don't know if time is a factor here.  You might need to do this sooner if you need to keep within a certain timeliness framework.

Also consider the cost of setting up and maintaining a trust and whether it is worth doing financially.

[livednlearned]

I believe it also depends on what state you live in.

I haven't received a one-time disbursement, but I did do some temporary work on a short-term grant, and that bumped my salary up for a short period of time. I asked my L if I needed to report it, and she said, Unless he discovers it, and files a motion, and pays to go through the process, don't worry about it.

So I didn't.

[allibaba]

Honestly that is the approach that I would take too.  Inheritance isn't normal earnings.  Especially considering that it happened after your separation started!

[ForeverDad]

Interesting quandary we face, one that wouldn't even occur to our disordered EXes.  Do we actively comply or let it slide and see what happens?  Could we later say, "Inheritance is excluded, isn't it?" and get a pass on consequences?

In my case I have to keep in mind that my state wants us to bring in last 3 years of taxes and also recent pay stubs.  I do that every time.  My ex, in over 7 years has never disclosed hers.  Somehow everyone assumes she's making minimal money and so she is just imputed minimum wage without a fuss from anyone.  However, I also know I couldn't get away with doing what she does... .

The person behaving poorly seldom gets consequences and the person in compliance seldom gets credit. :'(

[livednlearned]

Is there any reason for your ex to expect this inheritance has been paid out to you?

[whirlpoollife]

All of the replies are a great help, thank you. Putting the portion that is considered the income, the capital gain , into a trust I am definately going to look into.

I found out today that the taxes have not yet been paid on it so I don't know the net gain which gives me more time to work on it.

I can't report what I don't know, right ? 

H does not know yet it has been paid out.   As equitable distribution or final divorce hasn't started yet h will eventually know. 

[whirlpoollife]

I have to report all of it now.  Putting any of it into a trust for kids is voluntary and won't make a difference.  His L will be notified and then it's up to h to file for another support hearing.