Inheritance & Divorce

From Naomi Cahn and Amy Zeittlow, writing for Family Studies, the Blog of the Institute for Family Studies:

A recent court case caught our attention, and we’ll provide a slightly modified version of the case here (the names have been changed for privacy). Soon after “Charles” and “Dena” married, Charles’ father, “Frank” set up a trust to benefit his “issue,” that is, his “lawful blood descendants.” The purpose of the trust was the “comfortable support, health, maintenance, welfare and education” of the recipients. During a little more than two years of their more than 10-year marriage, Charles received $800,000 from the trust, money that “augmented” his family’s “upper middle-class lifestyle.” Once Charles filed for divorce, he received no more money from the trust because “the trustees deemed it too risky to distribute funds to [Charles] at a time when he might be required to share the funds with [Dena], a nonbeneficiary.” As part of the divorce, the courts had to decide whether Dena had any legal rights to Charles’ interest in the trust. The trial court judge valued Charles’ interest in the trust at more than $2 million, included it as part of the marital property to be divided, and awarded Dena with 60 percent of that amount. After several appeals, the Massachusetts Supreme Court determined that Charles’ interest in the trust was not “sufficiently certain” to be treated as marital property.

Read more here.