Milinovich v. Womack
236 Ariz. 612
Ariz. Ct. App.2015Background
- Father (former professional athlete) received large deferred-compensation payments and created two accounts: a short-term account (~$800,000) used to fund living expenses and a long-term annuity (~$2.5 million) meant to support future income.
- Father routinely withdrew principal from the short-term account (~$35,000–$40,000/month) because living expenses exceeded interest; he sought to reduce child support after retirement.
- In 2007 the parties had stipulated to child support based on high athlete income; in 2010 Father petitioned for modification claiming monthly gross income of ~$4,959.
- Mother argued support should be calculated using Father’s actual monthly withdrawals (~$42,000/month) as gross income.
- Trial court treated the withdrawals of principal from the short-term account as gross income under the Arizona Child Support Guidelines and set Father’s modified obligation at $2,348.88/month; Father appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether voluntary drawdown of principal from a short-term investment is "gross income" for child support | Father: principal withdrawals are not income; liquidation of assets should not be treated as gross income | Mother/Trial Court: withdrawals are cash-like resources available for expenditures and thus count as gross income | Court: withdrawals counted as gross income under Guidelines §5(A); inclusion consistent with child’s best interests |
| Whether listing withdrawals as income improperly double-counts deferred compensation already considered in original order | Father: deferred compensation was already included in 2007 calculation so counting withdrawals now double-counts income | Mother: record shows original stipulation reflected current contract spread monthly, not necessarily all deferred sums; present available funds matter | Court: Father failed to show double-counting; even if earlier counted, later available funds properly considered under Guidelines |
| Whether treating withdrawals as income creates inconsistent or unfair precedent | Father: would incentivize waste or produce inconsistent results with ordinary savings withdrawals | Mother/CT: investment vehicle and intent matter; case-by-case analysis is required | Court: rejected slippery-slope concern; courts may deviate where waste or concealment is present; this plan was designed to fund living expenses so withdrawals are income |
| Whether the court improperly exceeded Guidelines cap without written findings (upward deviation) | Father: court listed monthly income > Guideline cap and thus should have made written findings to justify upward deviation | Mother/CT: calculator capped combined income at $20,000/month; basic obligation computed from capped amount and additional costs increased total; Father’s percentage share changed but no upward deviation from Basic Obligation occurred | Court: no upward deviation occurred because Basic Child Support Obligation used the capped $20,000; additions for insurance/childcare produced the total obligation; calculation complied with Guidelines |
Key Cases Cited
- Strait v. Strait, 223 Ariz. 500 (discusses treatment of lump-sum receipts and need to consider net, purpose, and necessity)
- Little v. Little, 193 Ariz. 518 (child support obligation paramount; abuse-of-discretion standard)
- Engel v. Landman, 221 Ariz. 504 (Guidelines purpose: approximate family spending if together; investment decisions should not dictate support)
- Cummings v. Cummings, 182 Ariz. 383 (gross income based on actual money/cash-like benefits available for expenditures)
- Hetherington v. Hetherington, 220 Ariz. 16 (employment benefits that reduce living expenses may be considered income)
- Patterson v. Patterson, 226 Ariz. 356 (statutory and guideline interpretations reviewed de novo)
- Jenkins v. Jenkins, 215 Ariz. 35 (exchange of like-kind property not income where funds not available for expenditures)
- Burnette v. Bender, 184 Ariz. 301 (capital gain from sale not income absent interest or distribution available for spending)
- In re A.M.D., 78 P.3d 741 (inheritance principal invested/saved not income, but principal used to meet living expenses may be included as income)