Equitable Distribution for a Couple's Irrevocable Trust?

In Nelson v. Nelson, a husband established an irrevocable trust for the benefit of his wife and children. Eventually, the couple ended up getting a divorce. Under the law in most states, in the event of a divorce, marital property is equitably distributed among the couple. The trial court in this case ordered the trust assets to be distributed equitably. On appeal, the husband relied on Florida Trust Code § 736.04113, asserting that because the estate planning purpose of the trust was no longer necessary, the trial court was allowed to modify the trust and equitably distribute them. However, the appellate court concluded that this section of the code did not apply because neither the trustee nor a beneficiary petitioned for modification, which disallowed the court from ordering equitable distribution of the trust assets. The case illustrates a good lesson for the unintended consequences of estate planning and asset protection strategies relying on inter vivos transactions. 

See Jeffrey Skatoff, Is an Irrevocable Trust for Wife, Settled by the Husband, Subject to Equitable Distribution, Florida Probate Lawyers, December 20, 2016.