Insurance Windfalls May Affect Child Support

Insurance Windfalls May Affect Child Support

Sometimes a person that owes child support gets an unexpected windfall that isn’t linked to their job. An inheritance, lottery winnings, or an insurance claim for instance. How much of that should go to the children? Different states have different opinions on this.

In California, there is a voluntary program for insurers to withhold some or all of an insurance payout for child support purposes if the recipient owes money. About a quarter of insurance companies operating in California follow this guideline. Now California wants to make it mandatory for all insurers to do this.

The bill will set up structures to let the Department of Insurance and the Department of Child Support Services work together to match those receiving payouts and those who owe child support. The bill passed with overwhelming support, 29-4, in the state Senate. The bill now goes to the full assembly.

In Washington, the key word for child support computations is income. If a source of money can be considered income, then it can be garnished for child support. In unusual circumstances like a windfall, it may be good to discuss the implications with a family lawyer. Speak with Elise Buie Law Group, PLLC for a consultation if you have questions about child support payments.

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