Law News

Inheritance Equals Income Toward Child Support: Issue Divides Pa. Court

Danielle Rodier
Pennsylvania Law Weekly
August 30, 1999

Lump sum inheritance payments can constitute income in a judge's calculation of child support orders, the Superior Court has ruled in an apparent case of first impression.

The decision not only expands the definition of "income" in the Pennsylvania Domestic Relations Code, but it also gives trial court judges more leeway in coming up with their own interpretations of the definition, rather than sticking strictly to its meaning. But it's the Superior Court opinion, not the definition, that is more likely to keep trial court judges awake at night grappling with interpretations. The en banc court split 4-1-4 and the 30-page opinion produced by the majority, concurring judges and dissenters in Humphreys v. DeRoss, PICS Case No. 99-1632 (Pa. Super. Aug. 18, 1999) Hudock, J.; Joyce, J., concurring; Eakin, Del Sole, Musmanno & Orie Melvin, JJ., dissenting; McEwen, P.J., concurring (30 pages), offers differing perspectives from almost every possible angle.

"Because it's a split decision, it will continue to raise controversy," said the plaintiff's attorney, Barbara J. Walton.

Walton said the decision will have the effect of giving trial court judges more freedom in defining "income."

"[The majority decision] tells courts that even though the legislature spelled out a number of sources that can be income, these are only examples. The courts can use their discretion to decide if other sources of money can be considered income," she said.

"[The majority decision] tells courts that even though the legislature spelled out a number of sources that can be income, these are only examples. The courts can use their discretion to decide if other sources of money can be considered income," attorney Barbara J. Walton said. The attorney for the defendant, Stephen Hall of Crawford County, could not be reached for comment.


The dispute centered on the $83,696 William DeRoss received from the sale of his mother's home after she died. He was the sole beneficiary of the estate. DeRoss bought a house for his second family with the money, along with other unspecified items.

Beth Humphreys, DeRoss' ex-wife, petitioned the trial court to modify the support order for the couple's daughter, Angela, to take into account the inheritance. The court granted Humphreys' petition, ordering DeRoss to pay an additional $4,525 per month in support.

In calculating that number, the trial court amortized the lump inheritance sum over the period of time from the date of the modification petition until Angela's 18th birthday.

DeRoss appealed to the Superior Court en banc.

In the majority opinion, Hudock relied on the definition of "income" found in the Pennsylvania Domestic Relations Code, 23 Pa.C.S.A. 4302.

Beyond wages and fees, the definition names a plethora of other types of income, including that "from an interest in an estate or trust."

DeRoss claimed his inheritance did not meet any part of the definition. He said the money was not "income from an estate or trust" because he reinvested it into a new home.

The definition in the Domestic Relations Code refers to income derived from any interest in an estate, not the actual principle of the estate, he said. The Superior Court agreed with that argument.

"In other words, DeRoss' inheritance does not generate earnings in the way that an annuity or bank account would," Hudock said. "We agree with DeRoss' assertion that this clause contained in the definition only pertains to income (whether monthly payment, a yearly stipend, or however calculated) that a party receives from an estate or trust."

But another phrase from the definition snared DeRoss into increasing his support payments -- "other entitlements to money or lump sum awards, without regard to source, including lottery winnings."

That statement was broad enough to encapsulate DeRoss' inheritance money, Hudock said.

"In the present case, we conclude that, although the money DeRoss received from his inheritance does not nearly fit into the delineated examples contained in the statutory definition of income, the trial court correctly held that this money was available for his daughter's support," Hudock said.

"This sum, in essence, represents a windfall to DeRoss in the same manner as if DeRoss had won the lottery. Whether DeRoss continues to hold the money from his inheritance in a bank account or he reinvests the inheritance in a new home is immaterial."The majority also noted that many courts in other jurisdictions have held that lump sum inheritance payments can be considered income, including, New York, New Jersey and Colorado.


In a dissent joined by three other judges on the panel, Judge Michael Eakin said the majority was grossly overestimating the scope of the "income" definition.

"Trying to fit the vast ramifications of inheritance law into the one-size-fits-all catch phrase of 'entitlement to money' or 'any form of payment' is like trying to wear a tent: it's big enough, but that's not what a tent is for," Eakin wrote.

"I find no reason to force such a fit, or to invite the injustices that must, as here, ensue. If the legislature wanted to include inheritances of money or property or both, it would have said so. It did not, and for good reason: it would be inequitable in application, and the law already provides the means to consider an inheritance by deviation from the guidelines."

One of the problems Eakin found with the majority decision was that the support requirements it imposed on DeRoss were almost impossible for him to meet with his monthly income.

DeRoss' added $4,525 monthly payment is more than two thirds his actual income, Eakin said.

Instead of treating all monetary inheritances as income, as the majority proposed, and recalculating support damages accordingly, Eakin suggested another option.

The court could consider the income generated by the inheritance along with the relevant party's income before calculating support. Or the court could calculate support without considering the inheritance, but then allow a deviation based on the inheritance.

Eakin was also concerned that under the majority's ruling, people who inherit money will be treated differently from those who inherit anything else.

"Common sense tells us there are as many types of inheritances as there are people who inherit, yet the majority isolates cash inheritances from all other types without providing a reason to distinguish the two classes of beneficiaries," he said.

"The calculation of child support should not be determined by the serendipity of the nature of property inherited."

Judges Joan Orie Melvin, John Musmanno and Joseph Del Sole joined Eakin's opinion.

Although President Judge Steven McEwen agreed with the majority's conclusion, he said in a separate concurring statement that Eakin's decision highlighted the need for further guidance.

"The reality brought into sharp focus by the well reasoned dissent of Judge Eakin ... illuminates the problems caused by such lump sum receipts, prompting the query as to the need for a formula, from the legislature or the Supreme Court, to more fairly and uniformly adjust actual incomes to reflect unusual income receipts," he said.


Judge Michael Joyce joined the discussion in a seven-page concurring opinion, in which he said both the majority and dissent ignored an important issue.

Joyce pointed out that Section 4302 was amended while Humphreys was pending, in 1997.

The legislature made the amendment based in part on the Superior Court's decision in Darby v. Darby, PICS Case No. 97-0033 (Pa. Super. Dec. 30, 1996) Hester, J. (18 pages).), Joyce said.

In Darby, the court said the definition of "income" provided a slew of examples of income, but was not meant to be all-inclusive. The Darby court decided a father's lump sum tort settlement was income although such a category was not found in the definition.

After the case was decided, the legislature amendment the definition to include lump sum awards and settlements.

"It is thus evident that the General Assembly had the opportunity to overturn Darby if it disagreed with our interpretation of Section 4302," Joyce said.

"The fact that it did not do so, but incorporated our holding, suggests that the General Assembly approved of this court's interpretation."

The 1997 amendment also expanded the definition to include "any form of payment due to and collectible by an individual regardless of source."

Joyce said that category fit DeRoss' inheritance better than "entitlement to money or lump sum awards," which the majority relied on in its decision.

"Upon settling the estate, the executor was required to pay [DeRoss] the proceeds remaining after payment of the estate's expenses. The distribution of the estate proceeds to the designated beneficiary thus constituted a payment which was due to and collectible by [DeRoss]," Joyce said.

"Viewed in this manner, [DeRoss'] inheritance constituted income within the meaning of section 4302."

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