Marriage of Smith

Summary

Kierstin's father paid close to $400,000 of her legal bills. The payments were papered as promissory notes, but he expected repayment, if ever, only as an offset against a roughly $6 million inheritance, and she had repaid almost nothing. Mark and Cindy(Mark's current wife) were financing their legal fees on credit cards. The court held the trial court could treat those regular payments as Kierstin's income when comparing the parties' circumstances (relying on Alter and Williamson), and it distinguished Schulze as a single small loan. The court did not reach section 271 sanctions, and the fee awards of $124,352 to Cindy and $151,967 to Mark were affirmed.

What it means for the financial analysis

The label on the paper did not control. The court looked at the repayment history, the donor's testimony about what he expected, and the regularity and size of the payments. An analyst should build a schedule of third-party payments with dates, amounts, note terms, and actual repayments, because that record decides whether a "loan" reads as income. This was a fee-need ruling that borrowed its income rule from Alter, a child support case, so it is not a ruling on guideline income itself.

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