NJ & CT News

CONNECTICUT

Spendthrift Trust's Assets Are Not 'Income' for Ex-Wife

The Appellate Court of Connecticut has held, in Taylor v. Taylor, — A.2d —-, 2009 WL 2959618 (Conn.App., 9/22/09), that a trial court improperly reduced the amount of alimony owed to a beneficiary of a spendthrift trust on the theory that the trust earns enough to provide for her support. The trial court had reduced the alimony owed by a man to his ex-wife from $60,000 to $1 per year, saying that the trust, left to the wife by her parents' estate, should cover the wife's living expenses. The problem, according to the appellate court, was that the trial court's order was effectively trying to compel the trustees to make distributions to the wife, in contravention of the principles of trust law.

The trust document provided that “the trustees shall pay to or for the benefit of the Settlor's child ' so much of the net income thereof as the Trustees, in their sole discretion, deem advisable for the comfortable maintenance of said child ' .” The Appellate Court noted that, in accordance with the teachings of Zeoli v. Commissioner of Social Services, 179 Conn. 83 (1979), “[t]he well-settled rule in this state is that the exercise of discretion by the trustee of a spendthrift trust is subject to the court's control only to the extent that an abuse has occurred.” In Taylor, however, no claim had been raised that the trustees had abused their discretion in not making any distributions to the ex-wife. The trustees' obligation under the terms of the spendthrift trust was merely to distribute funds to the beneficiary as her needs required. However, until such distributions occurred, the undistributed income from the trust itself could not be considered as the wife's income. Bridgeport v. Reilly, 133 Conn. 31 (1946) (“In the case of the typical spendthrift trust under which the beneficiary receives only such sums as the trustee finds to be necessary for his support, we have held that no title in the income passes to him unless and until it is appropriated to him by the trustee, and then only to the amount determined by the trustee.”) Thus, the
appellate court reversed and remanded, holding it was an abuse of discretion for the trial court to consider the undistributed trust assets as income to the wife when considering reduction of the husband's alimony obligation to her.

NEW JERSEY

Judge Awards Splitting Couple Joint Possession of Dog

A New Jersey judge has held that a former couple must share possession of a six-year-old, pedigreed pug they bought for $1,500 when they were engaged and living together. The ruling, which allows Doreen Houseman and Eric Dare to spend alternating, five-week stretches with the dog, is the aftermath of a groundbreaking appellate decision last March that pets have a subjective value that transcends their monetary costs. The appeals court reversed Gloucester County Superior Court Judge John Tomasello's earlier denial of Houseman's request for possession (see Houseman v. Dare, FM, 08-667-07), which the judge based on the ground that pets, like furniture or cars, lack the unique value ' such as for heirlooms or works of art ' that is essential to an award of specific performance. That ruling was incorrect as a matter of law, the appeals court found, and the case was remanded for the court to consider the equities involved in granting sole possession to only one of the parties and determine if Dare had orally agreed to allow Houseman to keep the dog. No written opinion accompanied the bench ruling splitting possession of the pet.

CONNECTICUT

Spendthrift Trust's Assets Are Not 'Income' for Ex-Wife

The Appellate Court of Connecticut has held, in Taylor v. Taylor, — A.2d —-, 2009 WL 2959618 (Conn.App., 9/22/09), that a trial court improperly reduced the amount of alimony owed to a beneficiary of a spendthrift trust on the theory that the trust earns enough to provide for her support. The trial court had reduced the alimony owed by a man to his ex-wife from $60,000 to $1 per year, saying that the trust, left to the wife by her parents' estate, should cover the wife's living expenses. The problem, according to the appellate court, was that the trial court's order was effectively trying to compel the trustees to make distributions to the wife, in contravention of the principles of trust law.

The trust document provided that “the trustees shall pay to or for the benefit of the Settlor's child ' so much of the net income thereof as the Trustees, in their sole discretion, deem advisable for the comfortable maintenance of said child ' .” The Appellate Court noted that, in accordance with the teachings of Zeoli v. Commissioner of Social Services , 179 Conn. 83 (1979), “[t]he well-settled rule in this state is that the exercise of discretion by the trustee of a spendthrift trust is subject to the court's control only to the extent that an abuse has occurred.” In Taylor , however, no claim had been raised that the trustees had abused their discretion in not making any distributions to the ex-wife. The trustees' obligation under the terms of the spendthrift trust was merely to distribute funds to the beneficiary as her needs required. However, until such distributions occurred, the undistributed income from the trust itself could not be considered as the wife's income. Bridgeport v. Reill y, 133 Conn. 31 (1946) (“In the case of the typical spendthrift trust under which the beneficiary receives only such sums as the trustee finds to be necessary for his support, we have held that no title in the income passes to him unless and until it is appropriated to him by the trustee, and then only to the amount determined by the trustee.”) Thus, the
appellate court reversed and remanded, holding it was an abuse of discretion for the trial court to consider the undistributed trust assets as income to the wife when considering reduction of the husband's alimony obligation to her.

NEW JERSEY

Judge Awards Splitting Couple Joint Possession of Dog

A New Jersey judge has held that a former couple must share possession of a six-year-old, pedigreed pug they bought for $1,500 when they were engaged and living together. The ruling, which allows Doreen Houseman and Eric Dare to spend alternating, five-week stretches with the dog, is the aftermath of a groundbreaking appellate decision last March that pets have a subjective value that transcends their monetary costs. The appeals court reversed Gloucester County Superior Court Judge John Tomasello's earlier denial of Houseman's request for possession (see Houseman v. Dare, FM, 08-667-07), which the judge based on the ground that pets, like furniture or cars, lack the unique value ' such as for heirlooms or works of art ' that is essential to an award of specific performance. That ruling was incorrect as a matter of law, the appeals court found, and the case was remanded for the court to consider the equities involved in granting sole possession to only one of the parties and determine if Dare had orally agreed to allow Houseman to keep the dog. No written opinion accompanied the bench ruling splitting possession of the pet.