Attorney Popovitch, founder and managing partner of Popovitch Law LLC, has helped numerous clients navigate separations, divorces, and asset divisions involving inheritance issues and trusts. Whether these matters are simple or complex, it is critical to have experienced counsel. some issues that may arise in Inheritance and trust cases include:
Expectancy Interest:
Massachusetts Courts have consistently held that a future expectancy interest in a living person’s modifiable (i.e. revocable) will or estate plan cannot be divided in a divorce. If a spouse is a beneficiary in the will of a person who is alive at the time of divorce, this is a mere expectancy interest and is not an asset that is subject to division between the parties at the divorce. However, the Court will consider each party’s opportunity to acquire future income and assets when the Court divides the marital estate between the parties. Thus, one party’s expectancy interest in a future inheritance can influence the division of assets in a Massachusetts divorce. The Massachusetts divorce statute requires the Judge to review fourteen mandatory “Rule 34” factors when determining the division of assets. One factor is The opportunity for each party to acquire future acquisition of capital assets and income.
Spendthrift Trust:
A spendthtrift trust restricts the beneficiary’s access to the trust principle. In a recent case from the Massachusetts Court of Appeals, Levitan v. Rosen, addressed the inclusion of a spendthrift trust in a divorce action. The Court ultimately held that, in the case of this spendthrift trust ( in which the wife had an annual right to withdraw 5% of her share of the trust principal), the wife’s entire interest in the trust was part of the marital estate:
“Here, by contrast, the wife’s share of the trust is not susceptible to reduction (as she is the sole beneficiary of her share presently held in trust), the beneficiary class is closed, and the ‘primary intent’ of the trust is to provide for the wife rather than for subsequent generations. Accordingly, the wife’s trust interest in this case is sufficiently distinguishable from those deemed mere expectancies….”
Nonetheless, the Court concluded that. because the wife’s entire interest in the trust was subject to the trust’s spendthrift provision, the entire interest must be distributed exclusively to her, without any equitable division. The case was remanded to the trial court to decide the equitable division of the remaining marital assets (i.e., the husband’s retirement account).
