Have you been following the ongoing legal battle between recently retired NBA superstar Allen Iverson and his ex-wife, Tawanna? The latest development involves payment of back child support and whether or not Iverson can be made to pay all upcoming payments through 2026 in a single lump sum child support payment of $1,272,000.
As TMZ.com, which has been covering the Iverson saga, reports, after the couple’s contested divorce was settled by a judge in February 2013, Iverson was ordered to pay $8000/month in child support for the couple’s five children. He failed to make payments. As part of court efforts to enforce the child support order, a judge this past July to threatened Iverson with jail time unless he came up with the over $40,000 owed in back support.
Iverson avoided “deadbeat dad” status by making the payment a few weeks later. But on the grounds that she does not want to keep running into the same problem, Tawanna and her attorney recently filed a child support modification request that would make her ex-husband pay all child support payments due through October 2026 (when their youngest turns 18) in a single lump payments of $1,272,000. The plan is to place the money in a trust for the children with legal stipulations protecting the money for use as child support only. As of early September, the courts have not yet issued a ruling in this matter. Iverson has not commented on his ex-wife’s request.
The Iverson case is taking place in Atlanta, Georgia, but what if the couple lived in New Jersey? There are times when it is decided that child support and other money earmarked for a child are are better off placed in a trust, most commonly when it comes to establishing a “Special Needs Trust” for a child with mental or physical disabilities, or ongoing medical issues. In New Jersey, because child support payments are considered an asset of the child, direct payment of child support may make the child disqualify for means-based government benefits. For this reason, some parents include as part of their divorce settlement agreement that child support payments be made to a First Party Special Needs Trust instead of to the custodial parent directly. By keeping the money in a separate trust, children are then more likely to continue qualifying for SSI and/or Medicaid or other income-based programs.
Under New Jersey’s child support guidelines, the notion of a lump sum payment is also something that can be an option for paying off child support arrearages. In general, if one parent stops paying support, the receiving parent may file a motion in court for enforcement of the child support order and request payments (on behalf of their child) to be withheld from the other parent’s salary, tax returns, lottery winnings, or in a single lump sum payment, among other options.
It will be interesting to see what happens in the Iverson case, since it is not clear if any of the children are special needs. We will keep you posted!