Family Law Case Review: Trial Court Committed Error When it Did Not Impute Stepfather’s Income

Case: Francis M. Laux v. Pauletta Leann (Laux) Ferry
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: While the Indiana Child Support Guidelines permit a trial court, under appropriate circumstances, to impute the income of a subsequent spouse to the income of the parent for purposes of calculating the parent’s income, that imputation is never mandatory.

HELD: Trial court committed error when it did not impute Stepfather’s income to Mother, but then credited Mother for the Child’s health insurance premium which was paid by Stepfather.

FACTS AND PROCEDURAL HISTORY:
Mother and Father divorced in 1999 with one Child. At the time, child support was set at $1,000 per month.

Both parties remarried. In 2013, Mother filed a petition to modify child support. After an evidentiary hearing, the trial court increased Father’s child support to $443 per week, from which Father appealed.

The Court of Appeals rejected Father’s argument that the trial court incorrectly calculated Mother’s income when it did not impute to her any of the income of her subsequent spouse, Stepfather. The Court noted that while the Guidelines and case law permit such imputation, there is no authority for the proposition that imputation is ever mandatory.

However, the Court agreed with Father that it was error for the trial court’s child support calculation to credit Mother for Child’s health insurance premium payments, since those were paid by Stepfather through payroll deduction. The Court emphasized the issue of consistency. Either Mother and Stepfather should be viewed as a single financial unit (in which case Stepfather’s income should have been imputed, and the premium credit would have been appropriate), or Mother and Stepfather are viewed as separate financial units (in which case neither imputation nor the premium credit would be appropriate). Since the trial court concluded circumstances did not warrant imputation of Stepfather’s income to Mother, then consistency warranted that no credit be given to Mother for Stepfather’s payment of Child’s health insurance premiums.

Finally, the Court rejected that the trial court erred when it used for Father an income figure that did not deduct the self-employment FICA tax. While the Court acknowledged that such a deduction is appropriate, the Court noted that the trial court simply adopted the income figure used by Father in his own child support worksheet’s presented into evidence and, thus, any error was invited.

The Court affirmed the trial court’s order, other than as to the issue of the health insurance premium credit to Mother, which it ordered remanded with instructions.

To view the text of this opinion in its entirety, click here: Francis M. Laux v. Pauletta Leann (Laux) Ferry

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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