In determining how to allocate college expenses between parents, a court must impute income to a parent for any payment of those expenses by the family of that parent. Such was the holding of the Appellate Division, Second Department, in its July 31, 2013 decision in Kiernan v. Martin.

The facts are not made clear in the opinion. However, the father had testified he received funds from his family to pay for the children’s college expenses. These funds were not loans that the father was obligated to repay.

Putnam County Family Court Support Magistrate Rachelle Kaufman ignored these funds when allocating 67% of the college expenses for the parties’ children to the mother and 33% to the father. (The mother was also directed to pay the father $28,210.02 in arrears for college expenses.) Putnam County Family Court Judge James T. Rooney denied the mother’s objections to that order.

The Second Department reversed, holding that although the record supported the conclusion that the mother should share in the college expenses of the subject children, the Support Magistrate improvidently exercised her discretion by failing to impute additional income to the father for the money he received from his family for the children’s college expenses.

The Second Department vacated the order and remitted the matter to the Family Court for a new determination of the parties’ respective obligations to pay college expenses. That determination is to follow a report from the Support Magistrate on the amount of money the father received from his family members for the children’s college expenses.

The Second Department mandated that gifts targeted to pay for college made by the family of a parent be deemed income to that parent.

One-of-a-kind are not the type of regularly-received gifts normally imputed as income to the recipient for child support purposes. The impact, here, of the mandate is not clear.

Suppose the father makes $30,000 per year; the mother $60,000. Suppose further that the father’s parents make a gift of $30,000 towards the child’s $50,000 in expenses to attend a private college for freshman year.

Is the import of this decision to mandate that the father be deemed to earn $60,000 per year, with the remaining $20,000 of college expenses for the year (after applying the grandparents’ $30,000 gift) thus to be divided 50/50, or $10,000 to each parent? Why penalize the father? Should the $30,000 given by the father’s parents be subtracted from the expenses for the year, with the remaining $20,000 in expenses allocated 67% to the mother and 33% to the father? Or, after deeming the father to earn $60,000 per year, and allocating expenses between the parents 50/50 (or $25,000 to each parent), does the father then get to apply his parents’ $30,000 gift against his $25,000 share (and carry forward the extra $5,000 to the next year)?

Why, as the Second Department ruled, should the mother benefit from this special gift from the children’s grandparents? Was it really an abuse of discretion for Magistrate Kaufman to rule that the mother should not so benefit?

Do the parents have to go back to court the next year for a new allocation when the grandparents decide not to repeat their gift? Does a court presume that this gift is available every year? If grandparents intend to make such a gift, should they wait until a court has made its decision on allocation, and only then give funds defraying their child’s share of the grandchild’s expenses?

In Kiernan,  Hugh B. Ehrenzweig, of White Plains, represented the mother. Mitchell Lieberman, of  Lieberman & Lebovit, of Yorktown Heights, represented the father.