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Trustees validated in protecting assets during divorce

Asset and property division can become one of the most complex (and contentious) aspects of divorces occuring in Clinton Township. That is because these matters typically go well beyond the simple question of "who gets to keep the house?" Gifted assets, retirement benefits and investment accounts are also considered. Estate affairs can also become embroiled in divorce proceedings, particularly in cases where only one side is party to an estate and thus elgible to profit from its benefits. The other side might try to argue that if an estate or trust account was valid while the two were married, it should be considered a marital asset. 

That was the claim made by a Connecticut woman during her 2011 divorce from her husband. The husband was the beneficiary of a trust that is claimed to be valued at anywhere between $69 million and $98 million. During the couple's divorce proceedings, the trustees removed the assets and placed them in another trust (to which the husband is also a beneficiary) without him knowing. Their efforts essentially equated to them protecting the trust assets from the wife (who could be considered a creditor given the circumstances of the divorce case). After the case was appealed to the Connecticut Supreme Court, it was asked of the Massachusetts Supremen Court (where the orginal trust was created) if the trustee's actions were allowed. The Massachusetts court determined that they were, as the trustees believed that such actions were in line with the intent of the settlor. 

Few people may understand the complexities of cases such as those detailed above. Thus, those involved in them may be wise to seek the assistance of an experienced attorney when dealing with such matters. 

Source: Connecticut Law Tribune "Court OKs Trust Fund Transfer During Beneficiary's Divorce" Toutant, Charles, Aug. 10, 2017

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Lorrie J. Zahodnic

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Lorrie J. Zahodnic, P.C. has provided skilled and compassionate legal guidance to Michiganders in family law matters for over 20 years.

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