Lawyer's Weekly Newspaper (September 7, 2020)
Where a husband has appealed from a judgment of divorce nisi entered by a judge of the Probate & Family Court, the portion of the divorce judgment concerning the treatment of the wife's trust should be vacated and the case remand the matter for further proceedings.
"The husband ... argues that the judge erred by declining to treat the wife's interest in the 'Fitchett Trust' granted to her by her now-deceased mother as a marital asset subject to equitable division, but rather as an 'expectancy of future acquisition' attributed to the wife. ...
"Here, as the judge found, the wife's interest in the trust was 'neither remote nor speculative;' she 'has essentially unfettered ability to utilize significant funds from the trust to support herself,' a situation that was likely to continue into the future until she depletes the principal. Under the trust instrument, distributions of income are subject to the unrestrained discretion of the wife. She may make distributions of principal to herself (as both trustee and beneficary) pursuant to an 'ascertainable standard' allowing her to distribute 'whatever amounts of principal deemed advisable for the maintenance, education, support and health needs of any Trustee hereunder who is also a beneficiary'. This standard, in essence, requires the wife to distribute principal to herself' with an eye toward maintaining her standard of living in existence at the time the trust was created.'
"The wife's actual performance as trustee confirms her treatment of the trust as her property. In 2013, the trust had approximately $1.8 million in principal, consisting of stocks, and in addition held real estate in Florida. Since becoming trustee she has distributed approximately $1,390,000 to herself. ... She has the ability to live in, sell, or rent the Florida residence. ...The other beneficiaries (her children and grand children) understand that she lives off the trust, have not objected to the wife's distributions to helself, and have received only modest distributions to date. The wife effectively has a 'present right to use the trust principal, and can compel distributions as a marital asset even thought the beneficiary class is open. ...The wife's interest in the trust is not a 'mere expectancy' too remote for inclusion in a marital estate. ...
Please call Alex Matulewicz with any questions regarding your trust or will. Ask for your free consultation today. Call Alex at 508-660-0331. He'd be more than happy to help you!
