In order to help their family thrive, many grandparents financially support their adult children and grandchildren. For example, let’s think about a couple that lives in Manhattan with an income of $350,000 – $400,000 a year. In many places, that would be a decent amount of money. If someone’s living on the Upper West Side, Upper East Side, or SoHo, it’s not nearly enough. In these situations, grandparents often give their children very large sums of money on a routine basis as well as make direct payments towards expenses like the grandchildren’s private school tuition and high-end camp experiences. 

I wrote an article called “Good Samaritan Divorce,” which talks about how the Good Samaritan often gets “punished” in some way. For your convenience, you can read the article here.

What does this have to do with matrimonial law? There are standards and statutes in matrimonial law, and grandparents’ consistent and unwavering financial support can affect the support payments. The general support standards are set forth in “The Child Support Standards Act” and “The Notice of Guideline Maintenance” – advisory guideline statutes for child support and spousal support (aka maintenance and alimony). 

The golden rule is maintaining the standard of living.

At the outset of a divorce case, both sides are required to accurately complete, legally acknowledge, and file with the courts a comprehensive document called a Statement of Net Worth, which sets forth the standard of living. 

The standard of living analysis is the most critical and guiding factor in negotiating support and arriving at a final agreed upon amount. The system wants children’s material lives to remain intact. The system wants the lower income earning spouse to have a window of time when they are getting support from their higher earner ex to give them a cushion and bridge towards being more self-supporting. 

I’ve had many cases where grandparents steadily gave money to their children’s family throughout the marriage to subsidize housing, car payments, parking, vacations, and tuition – like a weekly or monthly allowance, but for adults.

If the couple divorces, the idea of imputation comes into play.

Imputation: The assignment of a value to something by inference from the value of the products or processes to which it contributes.

Let’s say it was the husband’s father that helped support the family, the wife is going to want to come after that additional money, even though it doesn’t show in the husband’s W-2 or tax returns – that’s the inference.

Some grandparents feel like imputation codifies an agreement that would have happened anyway. Other grandparents react differently and chafe at the idea of being required to do anything. They also don’t want to be passengers on the roller coaster of their child’s divorce. 

In many instances, grandparents enter into promissory notes with their child for some or all of the funds they give – thereby making their child their debtor. They are trying to ensure that the monies are legally recorded as debts and not gifts or supplemental income. This is done to shield both the grandparent and their child in the event of a divorce. Both the grandparent and child should, however, consult with a qualified attorney when navigating this strategy. 

Understanding imputations and standard of living analyses takes a skilled matrimonial attorney – and the more experience they have, the better. Contact me at The Law & Mediation Office of Cheryl Stein to schedule a consultation.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

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