Facts: The parties were divorced, and Father was ordered to pay child support of $966 per month. Father was also ordered to pay one-half of Child’s tuition at a private school. A few years later, Mother petitioned to modify the child support on the grounds that Father’s income had increased substantially and her mother — Child’s maternal grandmother — had been subsidizing Mother’s portion of Child’s private school tuition but was no longer doing so.

At the hearing, the proof showed that Child’s maternal grandmother had given Child annual gifts of money ($10,000 or $11,000) each year since the divorce.

The trial court increased Father’s child support obligation based on his increased income but denied Mother’s request that Father pay all of Child’s private school tuition. The trial court also ordered Mother to create a separate trust account for the use and benefit of Child in the amount of $66,000 (representing six annual gifts of $11,000 from the maternal grandmother). Mother was to hold this money in trust until Child’s 21st birthday. Mother appealed.

On Appeal: The Court of Appeals reversed the trial court.

Mother argued the trial court erred in requiring her to establish a trust account for all gifts from the maternal grandparent to Child.

In the context of making a child support award, a trial court has some discretion as to whether and how much child support should be placed in a trust or restricted account for the benefit of the child.

Tennessee Code Annotated § 34-1-102(a) provides that “[f]unds of a minor held by a guardian shall not be expended to relieve or minimize the obligation of the parent or parents to support the minor.”

The trial court’s only stated justification for the trust requirement was as follows: “[T]he problem I’ve always had whenever children have money on deposit, parents tend to want to use that money to pay things that really, as a parent, they should be paying.” The trial court also stated, “I don’t want to impute to [Mother] any bad motive, or anything, I think she’s done the right thing. . . .”

The Court agreed with Mother’s argument, writing:

The only issues presented to the court were whether Father’s income justified an increase in child support and whether Father should be required to pay a greater share of the child’s education-related expenses. Father did not petition to have a trust account established or put on any evidence to support the need for such an account. . . .

While this court agrees with Father that a trial court has the authority to establish a trust where circumstances so require, we find no evidence of any such circumstances in this case. . . .

We, therefore, conclude that the trial court erred in going outside the issues before it and requiring Mother to establish a trust account without any request or justification for such a remedy.

Accordingly, the requirement that Mother establish a trust account was reversed.

Carter v. Carter (Tennessee Court of Appeals, Middle Section, December 28, 2012).

Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.