Relates to the authority of the court to direct establishment accounts for the benefit of children in certain types of cases

BILL NUMBER:S4090

Title of bill

An act to amend the domestic relations law and the family court act, in relation to the authority of the court to direct establishment of a trust or other designated account for the benefit of children in matrimonial, child support and paternity cases

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Family Court Advisory and Rules Committee.

The Child Support Standards Act provides helpful parameters for Family and Supreme Courts to utilize to ensure that parents are assessed an appropriate proportion of their incomes for the support of their children, premised on the assumption that the incomes are relatively constant. However, the Act provides no mechanism for courts to address the not-infrequent situation where one parent receives an economic windfall or exceptionally high income during a short period of time, an income not likely to remain at that level in the future. Examples include professional athletes or performers, individuals who sell a successful business or those who win significant awards. Without a means of preserving a portion of the windfall income for children's future needs, courts are hampered in their ability to provide just and appropriate child support orders that incorporate future costs, such as college expenses. Accordingly, this measure would authorize courts to direct that children be permitted to benefit from such windfalls through establishment of designated accounts, such as trust funds or annuities, that would provide them with future streams of payments, thus ensuring adequate support even after a non-custodial parent's income has decreased.

While explicitly not diminishing the non-custodial parent's basic support obligation and in no way superseding the issuance of orders for periodic payments pursuant to the Child Support Standards Act, this measure would authorize Supreme or Family Court, under such terms and conditions as it deems appropriate, to direct a noncustodial parent to pay an amount to establish a security account designated for the benefit of the child, including, but not limited to, a trust account or annuity, to meet the child's future needs. This measure would require the Court to specify the parameters of the account, including, as applicable, the particular purposes of the account; the person or entity that will act as trustee, custodian or administrator of the funds in the account; the person or entity that will act as the trustee, custodian or administrator of the funds in the account in the event of the death of the designated trustee, custodian or administrator; the disposition of the funds after the emancipation or death of the child or children named as beneficiaries; the particular structure that will fulfill the purposes of the account; and any further provisions necessary to accomplish the purpose of the account.

This measure, which would have no fiscal impact upon the State, would take effect immediately.

2011 LEGISLATIVE HISTORY: None. New proposal.

Effective date

Immediately.