Trial Court Abused its Discretion Not Including Annuity Payments

Case: Tina Carmer v. Scott Carmer
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court abused its discretion when it declined to include annuity payments that Father receives as part of a structured settlement as his income for child support calculation purposes.

FACTS AND PROCEDURAL HISTORY:
Father and Mother married in 1994 and had three children together. Six years before the marriage, Father was seriously injured in an automobile accident. Father’s structured settlement provided for monthly annuity payments and periodic lump sum payments. Despite his injuries, Father is now able to work as a Wal-Mart greeter earning $450 per week. However, the monthly annuity payment is the bulk of Father’s monthly income.

After a final hearing on the dissolution of the parties’ marriage, the trial court concluded that Father’s annuity payments were not “income” for child support purposes. The trial court had relied, in part, on the annuity payments not being “income” for Internal Revenue Code purposes in reaching its conclusion. Mother appealed.

The majority, in a divided panel of the Court of Appeals, noted that “income” has a broader definition under the Indiana Child Support Guidelines than the tax code. The Court also noted that Father’s receipt of the annuity payments went to the standard of living the children would have enjoyed had the marriage not been dissolved. The Court reversed, remanding the matter for recalculation of child support that either includes the annuity payments, or makes findings in support of a downward deviation for excluding them.

Judge Robb concurred only in result. She concluded this case was complicated by the fact that Father does work and earns income, and that no findings were made as to what part of the structured settlement represents lost income versus medical expenses, pain and suffering, etc.  She would have preferred an innovative approach that did not necessarily establish a bright line rule that 100% of the annuity payment had to be included as income for child support purposes.

To view the text of this opinion in its entirety, click here: Tina Carmer v. Scott Carmer

 

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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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