Miscellaneous Child Support Issues

• Jurisdiction: Maryland

VII. MISCELLANEOUS CHILD SUPPORT ISSUES

A. Destitute Adult Child

Maryland, by statute, provides that a parent has a duty to support his "destitute adult child."³⁰² If a destitute adult child is in this State and has a parent who has or is able to earn sufficient means, the parent may not neglect or refuse to provide the destitute child with food, shelter, care and clothing.³⁰³ A "destitute adult child" is defined as an adult child who:

1. Has no means of subsistence; and

2. Cannot be self-supporting, due to mental or physical infirmity.³⁰⁴

It is clear that courts have the power to require child support payments for disabled adult children.³⁰⁵ It is also clear that the obligation to support a disabled adult child applies to an emancipated child who later becomes a dependent adult child,³⁰⁶ and also that the obligation applies to an incapacitated adult child whose disability does not begin until after reaching the age of majority.³⁰⁷ These principles were applied by the Appellate Court of Maryland in Presley v. Presley.³⁰⁸ Because incapacitated adult children are on equal footing with minor children, "it follows that the procedure and remedies for the enforcement of that right must also be 'on equal footing.'³⁰⁹ Accordingly, the Guidelines apply to the establishment or modification of child support under this provision.³¹⁰

In Cutts v. Trippe³¹¹ Father appealed the trial court's determination that the parties' daughter was a "destitute adult child" because she had a trust fund, and because the court failed to make findings of fact regarding her reasonable living expenses and failed to weigh them against her resources. The Appellate Court of Maryland noted that no Maryland court had addressed whether a trust fund constitutes a "means of subsistence" as defined in Fam. Law § 13-101(b). It affirmed the trial court's decision to exclude the trust from the destitute adult child analysis because the funds in the trust were not accessible by Sarah, nor had any funds ever been disbursed to Sarah, and ultimately held that a trust fund may not be considered as an available resource in the destitute adult child analysis. Moreover, the child had no job, received no disability benefits or other assistance and had no other available financial resources. Therefore, the trial court had no obligation to conduct a balancing test of expenses against resources. Reviewing its prior decisions in Presley and Corby,³¹² the appellate court affirmed that the need to balance expenses against resources only applies when the child has insufficient financial resources rather than no financial resources or earning capacity.³¹³

Similarly, in Fitzzaland v. Zahn³¹⁴ the Appellate Court of Maryland rejected the argument that the trial court improperly determined that appellant's child was a destitute adult child because expert testimony supported the conclusion that he might be able to obtain employment and become self-supporting in the future. It also rejected appellant's contention that it was error for the court to determine that the child's inability to be self-supporting was due to autism and other mental disabilities. Finally, the appellate court rejected the argument that the court should have conducted an analysis as to whether the child's living expenses were reasonable, because the parties' combined incomes were less than $15,000 per month, and in accordance with Fam. Law § 12-204, the child support determination was to be based on the parents' incomes, rather than the expenses of the child, except for the expenses listed in Fam. Law § 12-204(g)-(i), health care insurance, child care, extraordinary medical expenses, expenses for private or special schools and transportation expenses.

B. Dependency Tax Exemption

The Tax Cuts and Jobs Act of 2017 eliminated personal exemptions on federal income tax filings in favor of the higher standard deduction for individuals for tax years 2018 through 2025.³¹⁶ The result of this was the elimination of the Dependency Tax Exemption under federal law. However, Maryland still affords the Child Tax Credit, which has been expanded to reach additional children in Maryland. For 2021, each household could receive up to $3,600 for each child under six years old, and up to $3,000 for each child between six and 17 years old. The credit is calculated based on the parent's income and a percentage of expenses that they incur for the care of qualifying persons to enable them to go to work, look for work, or attend school. For 2021, the American Rescue Plan Act of 2021, enacted March 11, 2021, made the credit substantially more generous (up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons) and potentially refundable, so you might not have to owe taxes to claim the credit (so long as you meet the other requirements). However, taxpayers with an adjusted gross income over $438,000 are not eligible for this credit even though they may have previously been able to claim it. The maximum child tax credit amount will decrease in 2022 to $2,000 per child dependent age 16 and younger. This money is not a loan; the child tax credit is a credit that offsets the tax the parent owes dollar for dollar. Note: the parent can only claim the child tax credit if that parent claims the child as a dependent. Unlike an exemption, which will directly reduce income, a credit will reduce tax liability.

A dependent exemption is the income you can exclude from taxable income for each of your dependents. Prior to tax year 2018, you could exclude $4,300 for each dependent.

In the event of a settlement agreement where the parties have joint physical custody, if the agreement is silent on the child tax credit, the credit goes to the higher wage earner. If custody is not equally shared, and the agreement is silent, the tax credit goes to the parent who has the child for the most overnights. The parties can always agree to something else, but to avoid audits, they must provide a signed written declaration to be included with their tax returns.

In Wassif v. Wassif,³¹⁷ decided prior to the Tax Cuts and Jobs Act of 2017, the Appellate Court of Maryland held that, while a court order, standing alone, is not effective to transfer a dependency exemption to a non-custodial parent, the court has the power to order a custodial parent to execute the necessary waiver of a dependency exemption so that the non-custodial parent who is paying child support can have the benefit of the exemption.

In Rock v. Rock,³¹⁸ the wife was under no duty to relinquish the child dependency exemption to the non-custodial husband based on his payment of alimony and child support. The wife contended that she was paying more for the children's expenses than the amount of child support ordered.

In Scott v. Scott,³¹⁹ the Appellate Court of Maryland held that the Guidelines do not require a written finding that shifting the exemption to the non-custodial parent is in the best interest of the children. The child support Guidelines do not affect that which is required by the Internal Revenue Code.³²⁰

While the foregoing cases were decided prior to the Tax Cuts and Jobs Act of 2017, note that the dependency exemption under that act expires in 2025, and the rationale may still apply to the Maryland Child Tax Credit.

C. Uniform Gift to Minors Act

In Brodsky v. Brodsky,³²¹ the Supreme Court of Maryland held that a father, who was custodian of an account containing money he had given to his child under the Uniform Gift to Minors Act, could not use those funds to pay for her college education, which was a personal obligation he had incurred under the terms of the parties' Property Settlement Agreement.

In Goldberg v. Goldberg,³²² the Appellate Court of Maryland held that the trial court erred in removing a father as custodian of Uniform Transfer to Minors Act (UTMA) accounts established for his children where there were no findings by the trial court that evidence indicated "cause" for husband's removal and no person authorized by UTMA petitioned to remove father as custodian. The Appellate Court of Maryland did not address whether the "unorthodox investments" made by Mr. Goldberg on behalf of the children were sufficient to establish "cause."

D. Sanctions for Failure to Comply with Discovery

In Rolley v. Sanford,³²³ the Appellate Court of Maryland stated that the trial court should not have dismissed a woman's petition to modify child support as a sanction for her failure to comply with a discovery order. The court held:

[w]here there exists a discovery violation in a child support matter, as always, the best interest of the child is paramount, and a trial court must exhaust every available remedial step to enforce discovery before the extreme sanction of dismissal may be ordered. . . . [I]f Rolley continues to refuse to provide the missing discovery, the circuit court may hold her in civil contempt. . . .³²⁴

E. Waiver of Child's Right to Support When Child is Adopted

In Stambaugh v. Child Support Enforcement Administration,³²⁵ the Supreme Court of Maryland confronted the issue of the validity of an agreement by a mother to waive arrearages in court-ordered child support in exchange for the consent of her former husband and the father of the children to their adoption by the mother's current husband. The trial court upheld the parties' agreement. In reversing the trial court, Judge Karwacki, speaking for the Court, stated:

The agreement reached by Mrs. Stambaugh and Mr. Marsh whereby Mrs. Stambaugh agreed to waive any liability of Mr. Marsh for past or future child support payments due by Mr. Marsh in consideration of his consent to the adoption of his children by Mr.

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