Court Rules Withdrawal of Investment Principal Counts as Income

A few weeks ago we discussed what types of income may be counted in a child support determination. As discussed then, any wages, overtime pay, pension, investment income, and veteran and military benefits may be counted. However, a recent Court of Appeals decision may leave the door open for the definition of income to become even more expansive.

The court’s recent ruling held that withdrawals from an investment account that drew on the account’s principal count as income in child support considerations. The case arose when a former baseball player claimed that his post-retirement income had dropped, and therefore sought to have his child support obligation reduced. His child’s mother, however, claimed that since the investment withdrawals were used to pay living expenses they should be counted towards the father’s income. The court agreed despite the father’s argument that withdrawing the funds was likened to pulling money from a savings account.

Though interest earned on investments is always counted towards an individual’s income, this decision could mean that any money used for living expenses could be considered when calculating child support determinations. If this becomes the case, then even money pulled from a savings account one time to help pay for medical expenses could be attributed to income.

The evolving nature of the law makes it extremely difficult. Therefore, those who are struggling with child support issues should consider speaking with an experienced Arizona attorney who is current on the law and experienced in fighting for his or her clients’ best interests. Whether an individual is seeing modification or a favorable initial determination, having a legal ally could mean the difference between a fair outcome and one that leaves a parent on unsure financial footing.

Source: Arizona Daily Sun, “Court rules on income question in child support by ex-player,” Feb. 27, 2015