Who Gets the Trust? Appeals Court Weighs In
The Massachusetts Appeals Court recently issued an interesting decision in a divorce case, Jones v. Jones. As a divorce attorney practicing in Massachusetts, I wanted to break down this appellate ruling and what it means for family law practitioners.
The key issue in this case was whether certain assets gifted to the wife by her mother should have been included in the marital estate for purposes of equitable distribution under M.G.L. c. 208, §34. The assets at issue were the wife's interest in an irrevocable trust set up by her mother (the "JJIT"), the wife's indirect interest in Michigan real estate, and a certificate of deposit funded with gifts from her mother.
The trial judge determined these assets were part of the marital estate, despite being gifted to the wife by her mother and kept separate from other marital assets. The Appeals Court affirmed this ruling. As the Court explained, under §34, the marital estate includes "all property to which a party holds title, however acquired." The source of the assets does not prevent their inclusion.
The more interesting question was whether the wife's interest in the JJIT was too speculative to be considered marital property. The JJIT gave the trustee discretion to make distributions for the wife's benefit, but also required the trustee to distribute the entire trust corpus to the wife upon the death of her mother.
The wife argued this discretionary language made her interest too remote. But the Appeals Court disagreed, finding her right to the mandatory distribution upon her mother's death gave her a "fixed and enforceable" property interest in the trust assets. The Court also noted the overall intent of the JJIT was to benefit the wife.
This ruling provides important guidance for divorce attorneys on when an interest in a discretionary trust will still be considered marital property subject to equitable division. Even where distributions are discretionary, factors like a mandatory final distribution and intent to benefit one spouse support including the trust assets in the marital estate.
Overall, this decision confirms the broad scope of the marital estate under §34 in Massachusetts. It also provides clarity on when an interest in a complicated trust instrument will still be considered property subject to division in a divorce.
Disclaimer: The content provided in this blog is for informational and educational purposes only. It should not be construed as legal advice and readers should not act upon any information provided without seeking professional legal counsel. The author does not guarantee the completeness or accuracy of the information provided. This blog is not intended to create an attorney-client relationship between the author and the reader.