Ramifications of Accepting Financial Assistance in Your Family Law Case

By: Jessica A. Bryant

It is not uncommon for individuals to seek financial assistance when going through a divorce, custody, or modification case. Oftentimes, individuals seek financial assistance to cover attorney fees, the cost of retaining experts, or assistance with other financial items related to their cases. In other instances, people seek or receive help from family members or friends just to meet their needs, given the abrupt changes that come when families split up. Whatever the circumstances under which a person might need financial help, it’s important to understand that help from others can have potential ramifications in your case, primarily tied into income, debt, or how costs might be allocated. A few things to keep in mind when seeking or accepting financial assistance from others while going through your family law case are as follows:

1. Could the assistance be considered a gift and affect income calculations for spousal support and/or child support? One item enumerated in C.R.S. 14-10-115 as income for purposes of calculating alimony or child support is “monetary gifts.” Thus, if money is gifted to you to assist you throughout the proceedings, it could technically be included as income to you before the court calculates any spousal or child support. Generally, unless the gifts are consistent and anticipated, the court is likely to be hesitant to include such as income. A few ways to try to avoid the appearance of gift income would be to have friends or family members complete a promissory note, evidencing that the funds are being “loaned,” not gifted. If you take this step, it is recommended that you actively make payments as set forth in the promissory note; otherwise, the promissory note looks meaningless. At a minimum, it is advisable to document a date upon which payments are to commence, which can be some time after your case is done. Also, if the funds are from friends or family members, the court may be skeptical as to whether these individuals will actually require repayment down the road. However, a promissory note, or some other contemporaneous writing, at least provides evidence to the court that the assistance is for the limited purposes of helping get you through the court proceeding and is unlikely to continue in the future. If nothing more, have people put “loan” on the memo line of any check. Individuals seeking to provide assistance could also make payments to the attorney or expert directly. In that case, the other party could still try to argue it was money that lowered your expenses. However, if it was a one-time payment to an attorney or expert, the court is less likely to consider it as an on-going source of income.
2. What methods are being used to seek the financial assistance? As social media has become more common, it has also become a platform for individuals to use to request financial assistance. One such platform is the website “GoFundMe.” This is a platform individuals can use to raise money for a variety of reasons. Recently, it has become common for individuals to use GoFundMe like sites to raise money for assistance with attorney’s fees, expert fees, and other items related to family law cases. If this is a platform you are considering using to raise money, it is advised that you be very careful in terms of what language is communicated the site. Any references to or about the opposing party that are not 100% accurate could lead to allegations of defamation and slander. It is also common for friends and family members to create pages in an effort to assist; however, sometimes, in an effort to help, they may exaggerate or misstate facts and such could lead to accusations against you as well. Therefore, it is important to advise any friends or family members that seek to help by creating a social media platform for funding, to make sure that they get the facts correct.
3. Effect of Financial Contributions on Requests for Reimbursement of Attorneys’ Fees and/or Expert Costs. As discussed above, sometimes it’s advisable to have third parties pay your attorney or the expert directly to avoid accusations of gift income. However, in those circumstances, it is less likely the court would order the other party to reimburse your attorney fees and/or expert fees based on financial disparity since they were not paid by you directly. Even if family members give you a “loan” for such costs, though, it is unlikely the court will divide it as a marital debt since the court generally is skeptical about whether the family members would actually insist on repayment. Also, if third parties are paying any of your funds directly, be cautious as to how they are listed on your financial disclosures. If it is not an expense you are directly paying, it should not be listed as one of your personal expenses. However, if they provided said funds as a loan, you could list the debt owed to your lending benefactor in the debt section.
4. How should non-financial assistance be treated? Sometimes friends and family members don’t assist financially, but rather by giving you a place to stay once you move out of the former joint residence. In those instances, if financially feasible, pay as many of the expenses directly as you can. For example, if you are paying for your own food, keep track of the expense by saving receipts. It is also advisable you pay friends and family rent, a portion of the utilities, etc. to avoid appearing that you have more disposable income than you actually do. Moreover, getting housing, food, or things of that nature could also be argued to be income as the very charity you receive lowers your necessary living expenses.

In the practice of family law, even little, seemingly innocuous details can matter when it comes time to prove your positions in court or for settlement.