Jones v. Jones ( 2023 )

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us
21-P-655 Appeals Court
DYLAN JONES vs. JULIANA JONES.
No. 21-P-655.
Essex. September 12, 2022. - September 6, 2023.
Present: Desmond, Sacks, & D'Angelo, JJ.
Divorce and Separation, Division of property, Amendment of
judgment. Trust, Irrevocable trust, Beneficiary,
Distribution, Trustee's discretion, Vested interest. Gift.
Value.
Complaint for divorce filed in the Essex Division of the
Probate and Family Court Department on March 2, 2017.
The case was heard by Theresa A. Bisenius, J.
Carolyn Van Tine for the wife.
W. Sanford Durland, III, for the husband.
SACKS, J. Juliana Jones (wife) appeals from an amended
judgment of divorce nisi (divorce judgment), issued by a judge
of the Probate and Family Court after a three-day trial in
September 2019, that, among other things, equally divided the
marital estate between her and Dylan Jones (husband). The wife
2
argues that it was error to include in the marital estate for
purposes of equitable distribution under G. L. c. 208, § 34, her
interests in the following assets that originated in gifts from
her mother: (1) the Juliana Jones Irrevocable Trust (JJIT or
trust); (2) certain real property in Michigan; and (3) a
particular certificate of deposit issued by UBS Financial
Services Inc. (UBS CD). She argues that her interest in the
JJIT is too speculative to constitute marital property, and she
contends that all three assets were gifts to her and should not
have been treated as marital property. The wife also argues
that the judge, in determining the amount the wife was required
to pay to the husband to offset the property she retained as
part of the equitable distribution, abused her discretion by not
accounting for market fluctuations and tax consequences, as the
wife requested in her motion to alter or amend the original
judgment of divorce nisi. We affirm the amended judgment.
Background. We summarize the trial judge's relevant
findings, supplementing them with undisputed facts in the
record, and reserving other facts for later discussion. See
Pierce v. Pierce, 455 Mass. 286, 288 (2009). The parties were
married in Michigan in August 1998, and the husband filed a
complaint for divorce in Massachusetts in March 2017. The
parties had two children together during the marriage (born in
1999 and 2001). During the marriage, both parties were employed
3
outside the home, and they contributed equally to raising the
children.
The wife's mother made a variety of financial gifts and
contributions throughout the years, including, but not limited
to, (1) settling a trust for the wife's benefit (the JJIT),
(2) gifting substantial funds that were deposited into the UBS
CD, and (3) granting the wife a ninety-nine percent interest in
a limited liability company (PHR II) that holds title to the
marital home and a one-third interest in real property located
in Michigan. The wife's mother played a significant role in
shaping the marital lifestyle and financial expectations:
"The [wife's mother] showered the family with gifts,
whether monetary or experiential. [She] created a limited
liability company which purchased the marital home and paid
for its associated real estate taxes and major
repairs/renovations. The parties did not have to budget to
meet those expenses and instead put those funds towards
frequent travel, summer camp and a lifestyle they would not
have otherwise been able to afford. The wife always knew
that there was additional money available to meet the
family's needs and whims, which she used to supplement
their lifestyle. But for [the wife's mother's] generosity
and this money, the parties would not have been able to
maintain the lifestyle they did on their income from
employment alone. [The wife's mother] gifted the funds
during the marriage and the family enjoyed that lifestyle
throughout the marriage. This was not a situation where,
as the wife attempted to maintain, the funds were
completely segregated and never accessed by the parties."
The parties "contributed to retirement only minimally,
likely due to [the] wife's anticipated inheritance and the
4
significant gifts the parties received during the marriage."1
Similarly, the judge found that the parties "did not save
sufficiently during the marriage" to pay the children's college
costs. The judge emphasized that the financial accounts in the
wife's name were "utilized throughout [the] marriage . . . [and]
were woven into the fabric of the marriage." The judge
determined that, "[g]iven the length of the marriage and the
parties' equal contribution, it [was] not equitable for these
assets to be excluded from the marital estate."
Neither party requested alimony, and the judge found that
"in lieu of alimony, an assignment of the marital estate will
enable each party to support themselves and their children,
while maintaining the marital lifestyle." To that end, the
divorce judgment provided, in relevant part, that the wife shall
(1) retain, among other things, her interests in the JJIT and
PHR II; (2) transfer sixty percent of the UBS CD to the husband;
and (3) to effectuate an equal division of assets, pay to the
husband, "[a]s property division and not as an award of alimony,
. . . the total sum of $1,173,166.89," over a period of ten
years, in annual installments, with interest. The judge
explained that "[w]ith the husband's share of the property
1 The wife, for example, reported two individual retirement
accounts (IRAs) valued at a total of $30,562.26, but "ha[d] not
saved toward retirement in any meaningful way otherwise."
5
division, it [will be] possible for him to maintain the
lifestyle of the marriage and reasonable for him to contribute
towards college expenses." The present appeal by the wife
followed.
Discussion. 1. The JJIT. In 2015, the wife's mother
established an irrevocable grantor retained annuity trust
(GRAT), a vehicle for transferring money while avoiding Federal
gift taxes. See Freedman v. Freedman, 445 Mass. 1009, 1009
(2005). Upon the annuity termination date,2 the GRAT assets
remaining after the payment of the annuity were to be divided
into equal shares and placed in separate trusts for the wife and
her brother. The judge found that the wife's remainder interest
in the GRAT accrued during the marriage and was a "completed
gift." In March 2018 (during the pendency of the divorce
proceedings), the wife's separate trust (the JJIT) was funded
with 22,905 shares of Bank of Nova Scotia common stock from the
GRAT. The JJIT is governed by Michigan law and managed by an
independent trustee.3 Funds from the JJIT were used to pay
2 The annuity termination date fell on the second
anniversary of the date on which the assets were first
transferred to the original trust.
3 The trust provides that Michigan law "govern[s] [its]
validity, construction and all rights and obligations" set forth
therein, and that the trustee "shall have all powers conferred
by Michigan law, including all powers granted under Michigan
Statutes sections 700.7816 through 700.7819."
6
Federal and Michigan State taxes in June 2019; however, at the
time of trial in September 2019, the wife had not received any
outright distributions from the trust. The judge found that the
value of the JJIT was $1,285,263.27, as of July 2019.4
One of the central disputed issues at trial was whether the
wife's interest in the JJIT was includable in the marital estate
for purposes of equitable distribution under G. L. c. 208, § 34.
The judge found that although the JJIT is a "discretionary
trust, with a spendthrift provision," "the wife's interest in
the JJIT is a fixed and enforceable property right" that is
includable in the marital estate because the wife is "entitled
to the whole trust property," her "share is not susceptible to
reduction, . . . and the primary intent of the trust is" to
benefit the wife. The wife contends that this was error,
asserting that her interest in the JJIT is a mere expectancy and
is thus too remote and speculative for inclusion in the marital
estate. We are unpersuaded.
"A party's estate for purposes of equitable distribution
under G. L. c. 208, § 34, 'includes all property to which a
party holds title, however acquired.'" Levitan v. Rosen, 95
Mass. App. Ct. 248, 253 (2019), quoting Pfannenstiehl v.
4 This figure comprised the market value of the 22,905 Bank
of Nova Scotia stock shares ($1,222,668.90) and cash
($62,594.37).
7
Pfannenstiehl, 475 Mass. 105, 110 (2016). "Because we are not
'bound by traditional concepts of title or property' in
considering whether a particular interest is to be included in
the marital estate, we 'have held a number of intangible
interests (even those not within the complete possession or
control of their holders) to be part of a spouse's estate for
purposes of [G. L. c. 208,] § 34'" (citation omitted).
Pfannenstiehl, supra at 111. "Whether a trust may be included
in the . . . marital estate requires close examination of the
particular trust instrument to determine whether the interest is
a 'fixed and enforceable' property right, . . . or 'whether the
party's interest is too remote or speculative' to be included."
Levitan, supra, quoting Pfannenstiehl, supra at 111-112. "The
question turns 'on the attributes' of the specific trust at
issue, . . . [requiring] evaluation of the facts and
circumstances of each case." Levitan, supra, quoting
Pfannenstiehl, supra at 112.5
a. Attributes of the trust. Our inquiry thus begins by
examining the "attributes" of the JJIT. Levitan, 95 Mass. App.
5 "If an interest in a trust is determined after such
examination to be speculative or remote rather than fixed and
enforceable, and thus more properly characterized as an
expectancy, the interest is to be considered under the G. L.
c. 208, § 34, criterion of 'opportunity of each [spouse] for
future acquisition of capital assets and income.'" Levitan, 95
Mass. App. Ct. at 253, quoting Pfannenstiehl, 475 Mass. at 112.
8
Ct. at 253, quoting Pfannenstiehl, 475 Mass. at 112. Although
Massachusetts law governs our ultimate determination whether the
wife's trust interest may properly be included in the marital
estate under § 34, we look to Michigan law when examining the
trust to ascertain the nature of the wife's interest therein.
See Levitan, supra at 251, 253.6 "When interpreting the meaning
of a trust, [we] must ascertain and abide by the intent of the
settlor." In re Miller Osborne Perry Trust, 299 Mich. App. 525,
530 (2013). "[T]he settlor's intent regarding the purpose of
the trust's creation and its operation . . . [is] determined by
examining the trust instrument," and we "must attempt to
construe the instrument so that each word has meaning." In re
Kostin Estate, 278 Mich. App. 47, 53 (2008). See Bill & Dena
Brown Trust v. Garcia, 312 Mich. App. 684, 694 (2015).
The JJIT contains the following relevant provisions. The
wife, who is the sole beneficiary of the JJIT, is entitled to
receive two types of distributions: (1) discretionary
distributions of trust income and principal that the trustee, in
his "sole and absolute discretion, considers to be necessary for
6 Interpretation of the trust, and the determination whether
the wife's interest is includable in the marital estate, are
questions of law we review de novo. See Levitan, 95 Mass. App.
Ct. at 251-253. See also In re Theodora Nickels Herbert Trust,
303 Mich. App. 456, 458 (2013); In re Reisman Estate, 266 Mich.
App. 522, 526 (2005).
9
the [wife's] best interests and welfare";7 and (2) a "[m]andatory
[d]istribution" of the entire trust corpus that the trustee
"shall pay" after the wife's mother's death (effectively
terminating the JJIT).8 The JJIT grants the wife a power of
appointment, allowing her to appoint the trust corpus to the
beneficiaries of her will if she were to die before receiving
the mandatory distribution. In lieu of "outright
distribution[s]" to the wife, the trustee is authorized to
instead "expend . . . amounts for the [wife's] benefit" to avoid
the reach of her creditors and "to give [her] the maximum
possible benefit and enjoyment of all of the trust income and
principal to which [she] is entitled."
The JJIT also contains two additional provisions designed
to avoid the reach of creditors: (1) a spendthrift provision
prohibiting assignment of the wife's interest in the trust
7 Article IV, paragraph A, of the JJIT, entitled
"Distribution Standard," provides that "[t]he [t]rustee may pay
to [the wife] (or apply for [her] benefit) such amounts of trust
net income and principal (including all, part or none) . . . as
the [t]rustee, in the [t]rustee's sole and absolute discretion,
considers to be necessary for the [wife's] best interests and
welfare. . . . In making distribution decisions, the [t]rustee
may, but shall not be required to, consider [the wife's] other
financial resources."
8 Article IV, paragraph B, of the JJIT, entitled "Mandatory
Distribution," provides that "[u]pon the death of [the wife's
mother], the [t]rustee shall pay to [the wife] . . . the entire
balance of the trust assets upon the written request of [the
wife]."
10
(except in connection with the exercise of her power of
appointment);9 and (2) a "Postponement of Distributions"
provision (postponement provision). The latter provides, in
relevant part:
"Notwithstanding any other provision of the trust, the
[t]rustee shall have the power to postpone any principal or
income distribution otherwise required to be made from the
trust . . . upon or after the . . . death of a third person
(and to postpone to that extent the termination of such
trust which might otherwise be required) if the [t]rustee,
in the [t]rustee's sole and absolute discretion, determines
that there is a compelling reason to postpone such
distribution, such as a beneficiary's serious disability,
drug or alcohol abuse, a beneficiary's failure to enter
into an appropriate prenuptial agreement, the possibility
of divorce, failure to pursue a college education or
vocation commensurate with the ability of such beneficiary,
potential or pending creditor claims (possibly relating to
such distribution), a serious tax disadvantage to such
beneficiary (or his or her family) if such distribution
were made, or similar substantial cause. Any such
postponement of distribution may be continued by such
[t]rustee, in whole or in part, from time to time, up to
and including the entire lifetime of the beneficiary.
While such postponement continues, all of the other
provisions previously applicable to such trust shall
continue in effect, except that such beneficiary shall only
receive distributions from time to time of such amounts
from such principal and the net income therefrom as the
[t]rustee, in the [t]rustee's sole and absolute discretion,
9 The JJIT's spendthrift provision provides that "[t]o the
extent permitted by law, no beneficiary's interest shall be
subject to liabilities or creditor claims or to assignment or
anticipation. However, this paragraph shall not prevent the
exercise of any power of appointment granted in this [trust]."
See Mich. Comp. Laws § 700.7103(j) ("'Spendthrift provision'
means a term of a trust that restrains either the voluntary or
involuntary transfer of a trust beneficiary's interest"). See
also Mich. Comp. Laws § 700.7502.
11
deems necessary or appropriate for the best interests of
such beneficiary." (Emphases added.)
The wife claims error in the judge's determination that she
"will ultimately receive the whole of the trust property,"
contending that the judge disregarded the broad discretion
afforded to the trustee. It is true that the JJIT contains a
"discretionary trust provision," Mich. Comp. Laws
§ 700.7103(d),10 granting the trustee "sole and absolute
discretion" to make distributions of income and principal
"necessary for the [wife's] best interests and welfare," and
that, under Michigan law, a beneficiary "has no right to any
amount of trust income or principal that may be distributed only
in the exercise of the trustee's discretion." Mich. Comp. Laws
§ 700.7815(1). See In re Johannes Trust, 191 Mich. App. 514,
517 (1991). See also Levitan, 95 Mass. App. Ct. at 253, 254
("[i]nterests in discretionary trusts generally are treated as
. . . too remote for inclusion in a marital estate . . . because
. . . the beneficiary must rely on the trustee's exercise of
10"'Discretionary trust provision' means a provision in a
trust, regardless of whether the terms of the trust provide a
standard for the exercise of the trustee's discretion and
regardless of whether the trust contains a spendthrift
provision, that provides that the trustee has discretion . . .
to determine [one] or more of the following: (i) [w]hether to
distribute to or for the benefit of an individual . . . the
income or principal or both of the trust"; "(ii) [t]he amount,
if any, of the income or principal or both of the trust to
distribute to or for the benefit of an individual." Mich. Comp.
Laws § 700.7103(d).
12
discretion . . . and cannot compel distributions" [citation
omitted]). Nevertheless, even if "a trustee's discretion is
'uncontrolled,'" that fact "does not necessarily preclude a
trust's inclusion in the marital estate." Id. at 254. Here,
moreover, while the trust clearly contains discretionary
components, the wife largely ignores the mandatory distribution
language and the limits on the trustee's discretion to postpone
such a distribution. We turn to the issue of the trustee's
discretion regarding the mandatory distribution.
b. Mandatory distribution. The JJIT is not a pure
discretionary trust, see Coverston v. Kellogg, 136 Mich. App.
504, 508-510 (1984), because it also provides for a "mandatory
distribution" of the entire trust corpus that the trustee "shall
pay" to the wife upon her mother's death, see Black's Law
Dictionary 1151 (11th ed. 2019) (defining "mandatory" as "[o]f,
relating to, or constituting a command; required, preemptory");
Black's Law Dictionary 1653 (defining "shall" as "[h]as a duty
to; more broadly, is required to"). See also In re Kostin
Estate, 278 Mich. App. at 54 (where trust does not define
essential term, "we look to a dictionary definition").11
11The Michigan trust code does not provide a general
definition for "mandatory distribution." See Mich. Comp. Laws
§ 700.7103.
13
Notwithstanding this mandatory distribution clause, the
wife asserts that "the trustee's discretion includes the power
to defeat the [w]ife's interest in the trust by not making any
distributions to her." We conclude otherwise. While the
trustee does have the "power to postpone" the wife's enjoyment
and possession of the mandatory distribution (pursuant to the
postponement provision),12 the trustee does not have the power to
divest the wife of her interest in the trust corpus. Compare
Black's Law Dictionary 1413 (defining "postpone" as "[t]o put
off to a later time"), with Black's Law Dictionary 601 (defining
"divestment" as "[t]he complete or partial loss of an interest
in an asset"). Even if the trustee is permitted to postpone the
mandatory distribution indefinitely for the wife's "entire
lifetime," his power is limited to determining the timing of the
mandatory distribution -- but not the wife's ultimate
entitlement to it. See Coverston, 136 Mich. App. at 509-510.
The wife retains the power to appoint the trust corpus to the
beneficiaries of her estate, even if she dies before the
12By its terms, the postponement provision applies,
notwithstanding any other trust provision, to all
"distribution[s] otherwise required" (including any
distributions upon the death of a third person or that would
terminate the trust). Although the term "mandatory
distribution" is not specifically used in the postponement
provision, we think it reasonable to infer that the preceding
language regarding an "otherwise required" distribution
encompasses the mandatory distribution.
14
mandatory distribution is made. See id. at 510.13 The wife's
interest in the trust corpus is therefore vested and "fixed."
Levitan, 95 Mass. App. Ct. at 253.
c. Enforceability. Moreover, the wife's right to receive
the mandatory distribution is "enforceable." Levitan, 95 Mass.
App. Ct. at 253. The trustee may postpone the mandatory
distribution only for a "compelling reason." The postponement
provision lists several circumstances that could qualify as a
"compelling reason":
"[the wife's] serious disability, drug or alcohol abuse,
[the wife's] failure to enter into an appropriate
prenuptial agreement, the possibility of divorce,[14] [the
wife's] failure to pursue a college education or vocation
commensurate with [her] ability . . . , potential or
pending creditor claims (possibly relating to such
distribution), a serious tax disadvantage to [the wife] (or
13 Under Michigan law, trust property subject to a
testamentary general power of appointment is treated as a
property interest reachable by the beneficiary's creditors upon
the beneficiary's death. See Mich. Comp. Laws § 556.123(3) ("If
a donee has at the time of his or her death a general power of
appointment, whether or not he or she exercises the power, the
personal representative or other legal representative of the
donee may reach on behalf of creditors any interest that the
donee could have appointed to the extent that the claim of a
creditor has been filed and allowed in the donee's estate but
not paid because the assets of the estate are insufficient").
14 There has not been any postponement here on these or any
other grounds. Nor was there any evidence that the wife ever
requested, or would need to request, a distribution in order to
make any of the payments to the husband required by the amended
judgment of divorce. To the extent the "possibility of divorce"
provision was intended to preclude the husband from obtaining
any of the trust assets themselves, or assets directly traceable
thereto, the amended judgment of divorce has not been shown to
contravene that intent.
15
. . . her family) if such distribution were made, or
similar substantial cause."
In short, the trustee may postpone the mandatory
distribution to the wife only if he determines that one of the
listed compelling reasons (or a "similar substantial cause")
exists. While this determination is left to the trustee's "sole
and absolute discretion," the discretion is nevertheless
narrower than that afforded to the trustee when making regular
distributions.15 See Restatement (Third) of Trusts § 87 comment
a (2007) ("a power is discretionary except to the extent its
exercise is directed by the terms of the trust or compelled by
the trustee's fiduciary duties").
Where the trustee's exercise of discretion is governed by a
specific standard (sometimes expressed as an "ascertainable
standard"16), the standard is judicially enforceable and the
trustee must adhere to it. See In re Mendelson Estate, 391
Mich. 706, 711 (1974). See also Mich. Comp. Laws § 700.780115We note that the circumstances qualifying as a
"compelling reason" set forth in the postponement provision may
be temporary in nature or within the wife's control, further
limiting the scope of the trustee's power to postpone.
16The Michigan trust code defines "[a]scertainable
standard" as "a standard relating to an individual's health,
education, support, or maintenance within the meaning of [§]
2041(b)(1)(A) or 2514(c)(1) of the [I]nternal [R]evenue [C]ode
of 1986, 26 [U.S.C. §§] 2041 and 2514." Mich. Comp. Laws
§ 700.7103(b). See also G. L. c. 203E, § 103 (defining
"[a]scertainable standard").
16
("the trustee shall administer the trust . . . in accordance
with its terms"); Mich. Comp. Laws § 700.7815(1)(c) (trustee's
failure to exercise judgment "in accordance with the terms and
purposes of the trust" is abuse of discretion);17 Estate of
Weinstein v. United States, 820 F.2d 201, 205 (6th Cir. 1987)
(under Michigan law, "trustee must . . . exercise his discretion
in accordance with any standards set forth in the trust
instrument or reasonably inferable from its terms"). And the
presence of terms such as "uncontrolled discretion" or "sole
discretion" is not inconsistent with the establishment of an
enforceable interest. In re Mendelson Estate, supra. See
Estate of Weinstein, supra (same).18 Here, the requirement that
17Michigan also provides statutory remedies for a trustee's
breach of trust. See Mich. Comp. Laws § 700.7901.
18Despite the discretion conferred on the trustee, we
conclude that the JJIT sets forth a judicially enforceable
standard with specific parameters guiding the trustee's exercise
of discretion. See A. Newman, G.G. Bogert, & G.T. Bogert,
Trusts and Trustees § 560 (3d ed. 2010); Restatement (Third) of
Trusts § 87 comment d (2007). We note for comparison that in
Massachusetts, "even very broad discretionary powers are to be
exercised . . . with reasonable regard for usual fiduciary
principles," and "[a] fair reading of the whole of most trust
instruments will reveal a 'judicially enforceable . . .
standard' for the exercise of even broadly expressed fiduciary
powers" (citations omitted). Briggs v. Crowley, 352 Mass. 194,
200-201 (1967) The difference between language conferring
"extended discretion" (e.g., "sole and absolute" or "absolute
and uncontrolled" discretion) and language conferring "simple
discretion" is "one of degree more than of kind" (quotation
omitted). Morse v. Kraft, 466 Mass. 92, 98 n.9 (2013).
17
a trustee make a mandatory distribution unless there is a
"compelling reason" not to do so provides a standard to guide
the trustee, one that courts will enforce, and thus the wife has
an enforceable interest.19 Cf. Matter of the Estate of Kettle,
73 A.D.2d 786, 786 (N.Y. 1979) (under New York law, where trust
provided that stock should not be sold in absence of "compelling
reason," and trustee sold stock without showing compelling
reason, beneficiary successfully brought action against trustee
to restore stock to trust).
In summary, the wife is the sole beneficiary (in a closed
beneficiary class) of an irrevocable trust; her interest in the
trust is not susceptible to reduction or divestment; she is
eligible to receive discretionary distributions of income and
19In an unpublished decision involving a postponement
provision remarkably similar to the postponement provision in
the JJIT, the Court of Appeals of Michigan held that the
trustee's "power to postpone" could not be invoked in the
absence of a "compelling reason," and there were "only limited
circumstances . . . that would amount to a 'compelling reason'
or 'substantial cause' by which the trustee could postpone, but
not deny," a distribution. In re Ernest W. Hamady Trust, Nos.
319900, 319901, slip op. at 5-6 (Mich. Ct. App. July 30, 2015)
(Hamady). In Michigan, "an unpublished opinion has no
precedential value," but it may be followed if a court "finds
the reasoning persuasive." Zaremba Equip., Inc. v. Harco Nat'l
Ins. Co., 280 Mich. App. 16, 42 n.10 (2008). Although we
recognize that Hamady is not binding on the Michigan courts or
on us, its reasoning is persuasive and, in the absence of
published Michigan case law on the specific issue before us, it
is the best indication we have of Michigan law on that issue.
Cf. Mich. Ct. R. 7.215(C)(1) (2023) (permitting citation of
unpublished decisions if party explains reason for citing and
relevance of decision).
18
principal that the trustee deems in her "best interests and
welfare," and she may also have payments made on her behalf by
the trustee (in lieu of outright distributions); her right to
receive a mandatory distribution of the entire trust corpus upon
her mother's death is vested and fixed; and she has the power to
appoint trust assets to the beneficiaries of her estate if she
dies before receiving the mandatory distribution. To the extent
that the trustee has the discretion to "postpone" distributions
for a "compelling reason," that discretion is subject to
judicially enforceable limits.
Upon examining the trust instrument as a whole, see Bill &
Dena Brown Trust, 312 Mich. App. at 694, it is apparent that the
settlor's intent, and the overriding purpose of the trust, is to
benefit the wife rather than "subsequent generations," Levitan,
95 Mass. App. Ct. at 254, and to ensure that she receives "the
maximum possible benefit and enjoyment of all of the trust
income and principal to which [she] is entitled" by shielding
trust assets from creditors.20 The wife contends that including
20In addition to the spendthrift provision, the
postponement provision is clearly designed to shield trust
assets from creditor claims. Michigan law permits creditors to
reach an undistributed mandatory distribution after the
distribution date unless it is subject to the trustee's exercise
of discretion. See Mich. Comp. Laws § 700.7507 (allowing
creditors to reach undistributed mandatory distributions after
distribution date, unless distribution is subject to exercise of
trustee's discretion -- even if "[t]he direction is expressed in
the form of a standard of distribution," or "[t]he terms of the
19
the trust in the marital estate disregards the settlor's intent
for the trust to solely benefit her, because its inclusion
indirectly benefits the husband in contravention of the
settlor's intent. However, the fact that the trust is primarily
intended to benefit the wife undermines her argument that her
interest in the trust is too speculative to constitute a
property interest for purposes of § 34. See Levitan, 95 Mass.
App. Ct. at 254-255 (settlor's primary intent for trust to
benefit beneficiary spouse, rather than subsequent generations,
weighed in favor of treating spouse's trust interest as property
subject to equitable distribution under § 34). Moreover, the
settlor's intent to benefit the wife does not prevent the JJIT's
inclusion in the marital estate so long as the wife, rather than
the husband, retains the trust interest (to avoid running afoul
of the spendthrift provision). See id. at 255.
d. Trust case law. The wife's interest in the JJIT shares
attributes with other trust interests that our courts have
deemed sufficiently fixed and enforceable for inclusion in the
marital estate. See, e.g., Levitan, 95 Mass. App. Ct. at 254-
255 (wife's trust interest includable in marital estate because
she was sole beneficiary, beneficiary class was closed, her
share was "not susceptible to reduction," "the 'primary intent'
trust authorizing a distribution use language of discretion and
language of direction").
20
of the trust [was] to provide for the wife rather than for
subsequent generations," and although "trustee's discretion
[was] not guided by an ascertainable standard, there [was] some
degree of predictability built into the trust by virtue of the
wife's annual right to withdraw five percent of the trust
principal, albeit subject to the spendthrift provision"
[citation omitted]); Comins v. Comins, 33 Mass. App. Ct. 28, 30-
31 & n.4 (1992) (wife's interest in discretionary trust with
ascertainable standard deemed sufficiently certain to include in
marital estate where she was sole beneficiary and had power to
appoint recipients of trust corpus upon her death).21
By contrast, the trust interests that our courts have
deemed too remote or speculative for inclusion in the marital
estate are readily distinguishable from the trust interest at
issue here. See, e.g., Pfannenstiehl, 475 Mass. at 114
21See also Lauricella v. Lauricella, 409 Mass. 211, 216-217
(1991) (husband's vested, one-half beneficial interest in trust
was includable under § 34 as husband occupied two-family house
owned by trust, beneficiary class was closed, and husband was
likely to outlive trust's natural termination date and receive
share of trust property); S.L. v. R.L., 55 Mass. App. Ct. 880,
883-884 & n.10 (2002) (wife's one-fifth remainder interests in
four trusts were includable in marital estate as wife's interest
was fixed at minimum of one-fifth and could increase if certain
events occurred); Davidson v. Davidson, 19 Mass. App. Ct. 364,
371-372 (1985) (husband's remainder interest in father's
testamentary trust, which granted trustees "uncontrolled
discretion" and contained spendthrift provision, was part of
marital estate because husband's remainder interest was fixed at
time of divorce, even though value was uncertain).
21
(beneficiary husband's "right to distributions . . . [was]
speculative, because the terms of the trust permit[ted] unequal
distributions among an open class that already include[d]
numerous beneficiaries, and because his right 'to receive
anything [was] subject to the condition precedent of the trustee
having first exercised his discretion' in determining the needs
of an unknown number of beneficiaries" [citation omitted]); D.L.
v. G.L., 61 Mass. App. Ct. 488, 498-500 (2004) (husband's
contingent remainder interest in trust too remote or speculative
for inclusion in marital estate because he would receive his
share only if he were still alive on April 10, 2011, and his
father had died before that particular date).
We therefore conclude that the wife's interest in the JJIT
is sufficiently "fixed and enforceable" to constitute a property
interest (rather than "too remote or speculative"). Levitan, 95
Mass. App. Ct. at 253, quoting Pfannenstiehl, 475 Mass. at 111-
112. Accordingly, the judge permissibly included the JJIT in
wife's estate, and assigned it to her, for purposes of equitable
distribution under G. L. c. 208, § 34. See Levitan, supra at
255.
2. Michigan real property. The wife argues that the judge
should have applied Michigan law in determining whether the
wife's $72,633 indirect interest in certain Michigan real
22
property22 was includable in the marital estate. Under Michigan
law, according to the wife, the property was separate from the
marital estate and not subject to distribution. The argument
misses the mark.
As we have previously stated, the Massachusetts equitable
distribution statute, G. L. c. 208, § 34 -- not Michigan law --
governs the property division in this case. Section 34 permits
a judge to assign property owned by either spouse "whenever and
however acquired," Rice v. Rice, 372 Mass. 398, 400 (1977),
including real property located outside Massachusetts, see id.
at 399, 402 (affirming award of husband's interest in Canadian
real property to wife); Rolde v. Rolde, 12 Mass. App. Ct. 398,
399 (1981) (affirming property division that included order
requiring wife to convey interest in Maine real property to
husband). See also 2A C.P. Kindregan, Jr., M. McBrien, & P.A.
Kindregan, Family Law and Practice § 56:4 (4th ed. 2013) ("the
power of the court to hold the person in contempt if he or she
fails to comply with the order is the ultimate basis of the
22At the time of trial, the wife held a ninety-nine percent
interest (apparently transferred to her by her mother) in a
Michigan limited liability company, PHR II LLC, which in turn
held a one-third interest in another Michigan entity, RJP3
Investment Company, LLC, which in turn held a $220,100 equity
interest in an office building and surrounding land in Troy,
Michigan. The judge found that the value of the wife's interest
in PHR II was $72,633.
23
court's jurisdiction to order an assignment of out-of-state
property"). Thus, the wife's indirect interest in the Michigan
real property was properly included in the marital estate for
the purposes of equitable division.23
3. Source of assets. The wife argues that the judge erred
by including three particular assets in the marital estate,
where those assets originated with the wife's mother, were kept
separate from other marital assets, and assertedly were not
relied upon by the parties in maintaining their lifestyle during
the marriage. The three assets at issue are the wife's interest
in the JJIT, the Michigan real property, and the UBS CD.24 But
the wife points to no reason why these assets could not be so
included. See Levitan, 95 Mass. App. Ct. at 253 (party's estate
for purposes of equitable distribution includes all property to
which party holds title, however acquired). Indeed, the judge's
inclusion of the three assets in the estate, for potential
division, appears unassailable. See Williams v. Massa, 431
Mass. 619, 625 (2000) ("no question that [assets gifted to or
23The judge did not order the interest itself divided or
transferred to the husband. The wife retains "all right, title
and interest" in the two intermediary entities through which she
holds her indirect interest in the property.
24The UBS CD was funded with a total of $300,000 in gifts
from the wife's mother to the wife, which the parties had
neither added to nor withdrawn from during the marriage. At the
time of trial, the account was valued at $310,683.54.
24
inherited by husband from his parents] comprised part of the
marital estate for purposes of possible division under G. L.
c. 208, [§] 34").
The wife asserts that Williams supports her position. In
Williams, however, the judge considered the source of certain
assets not for the purpose of determining what to include in the
marital estate, but only to determine how to equitably divide
that estate. Id. at 626. The wife's reliance on Williams is
misplaced.
The wife also suggests that the judge should have treated
the three assets as "kept outside the marital partnership by
tacit agreement of the parties." Bak v. Bak, 24 Mass. App. Ct.
608, 621 (1987). The judge found, however, that the
availability of gifts from the wife's mother, both present and
anticipated, allowed the parties to enjoy an otherwise
unaffordable lifestyle and to forgo saving for anticipated
future expenditures such as retirement. Even if the parties did
not actually have occasion during the marriage to draw upon the
three specific assets the equitable division of which the wife
now challenges, the judge could reasonably conclude that their
existence was "woven into the fabric of the marriage" and
enabled a higher current standard of living for both parties.25
25Bak is distinguishable for a second reason. There, a
judge left the husband in possession of certain real estate,
25
4. Market fluctuations. The wife argues that the judge
abused her discretion by equitably dividing several of the
wife's assets without taking into account how market
fluctuations in stock prices could affect the value of those
assets.26 The wife suggests that the judge should have divided
those assets by percentage, rather than by using values computed
as of a date several months before trial, but which rose by the
time of trial and then fell sharply after the entry of judgment
nisi. See generally Gazelle vs. Gazelle, 102 Mass. App. Ct.
764, 766-767, 769 (2023) (determination of appropriate valuation
date for marital property left to judge's sound discretion; no
error in valuing property as of date of appraisals conducted
which had long been used by his family, in part so that the
property could serve "as security for the payments of alimony"
the husband was ordered to make to the wife. Bak, 24 Mass. App.
Ct. at 621. Here, in contrast, neither party requested nor did
the judge order alimony. Rather, the judge ordered a property
division "in lieu of alimony" that would allow the husband, as
well as the wife, to continue to enjoy the standard of living
each enjoyed during the marriage. Under § 34, "the court may
assign to one party in a divorce proceeding all or part of the
separate nonmarital property of the other in addition to or in
lieu of alimony." Rice, 372 Mass. at 401. The Alimony Reform
Act of 2011 amended § 34 to expressly direct the court to
consider, in addition to other factors, "the amount and duration
of alimony, if any, awarded under sections 48 to 55, inclusive."
G. L. c. 208, § 34, as amended by St. 2011, c. 124, § 2.
26The assets at issue are the JJIT, which consists largely
of shares of stock in the Bank of Nova Scotia; and PHR II, which
the wife's brief asserts is heavily invested in stock in the
same bank.
26
before trial, notwithstanding fluctuations in value during trial
and at time of divorce judgment).
The short answer to this argument is that the wife has not
included in the record appendix the proposed judgment using
percentage values that she says was submitted to the judge. Her
brief cites only to her motion to alter or amend the judgment
under Mass. R. Dom. Rel. P. 59(e), and although that motion
refers to a previously submitted proposed judgment containing
percentages, we do not have the proposed judgment itself. It is
"a fundamental and long-standing rule of appellate civil
practice" that the appellant, here the wife, has an obligation
"to include in the appendix those parts of the [record that] are
essential for review of the issues raised on appeal." Shawmut
Community Bank, N.A. v. Zagami, 30 Mass. App. Ct. 371, 372-373
(1991), S.C., 411 Mass. 807 (1992). On the inadequate record
the wife has supplied, we cannot say that the judge abused her
discretion in declining to follow whatever approach the wife
proposed.27
27We add that the wife has not established that the amended
judgment nisi requires the sale at any particular time of any of
the wife's assets that are subject to fluctuations in market
value. Moreover, from all that appears, such fluctuations may
inure to the wife's benefit. At the time any sales are
required, it may turn out that fewer shares must be liquidated
in order to make the required payment to the husband than if the
judgment had awarded him a percentage, rather than a fixed
amount, of the value of the assets in question. Finally, the
wife misplaces reliance on Baccanti v. Morton, 434 Mass. 78727
5. Tax consequences. Finally, the wife argues that the
judge abused her discretion by not considering the adverse tax
consequences to the wife of the order to pay the husband
$1,173,166.89 over a ten-year period. The wife's motion to
alter or amend the judgment requested, among other things, that
the judge minimize the tax consequences of the asset sales the
wife would have to undertake in order to make the payments to
the husband. The judge allowed the motion in some respects but
made no amendments to address tax issues.
In dividing marital assets, "where the issue of tax
consequences has been raised and the judge has been provided
with appropriate evidence in the record, . . . the judge should
consider the tax consequences arising from a judgment" (citation
and quotation omitted). L.J.S. v. J.E.S., 464 Mass. 346, 350
(2013). "In some circumstances, tax consequence issues may be
raised during trial; in others, the issues may be more
appropriately raised in a postjudgment motion to amend the
judgment under Mass. R. Dom. Rel. P. 59 (e) . . . ." Id. at
350-351. But "[i]f parties do not request the judge to consider
particular tax consequences and do not introduce reasonably
(2001). That case involved how to divide assets, such as
unvested stock options, where their "present valuation is
uncertain or impractical." Id. at 802. There was nothing
uncertain about the present value of the bank stock at issue
here. The wife's brief furnishes exact share values as of dates
prior to trial, at trial, and after the entry of judgment.
28
instructive evidence bearing on those tax issues, the probate
judge is not bound to grapple with the tax issues." Fechtor v.
Fechtor, 26 Mass. App. Ct. 859, 866 (1989).
Here, the wife's postjudgment motion offered no evidentiary
support for her claim that she would be obligated to liquidate
assets, and pay corresponding taxes, in order to make the
payments to the husband. Her motion did assert that she had
already paid all of the taxes due on her assets for the year in
which the case was tried (2019), and she asked that her required
payment to the husband be reduced by one-half of the amount of
those tax payments. But she failed to assert (let alone offer
evidence of) what specific amounts she had actually paid in
taxes, giving the judge insufficient information with which to
amend the judgment.
As for future taxes, she requested in general terms that
she "be permitted to transfer assets valued at the yearly payout
amounts to [the husband] and he should then be responsible for
the taxes associated with any transfer or liquidation." But she
failed to specify what taxes she anticipated would need to be
paid. This deprived the husband of the information necessary to
evaluate the consequences to him of her proposal, and it
deprived the judge of the information necessary to determine
whether her proposal was equitable. The wife's motion stated
that a proposed order was submitted therewith, but she has not
29
included any such proposed order in the record appendix. See
Shawmut Community Bank, N.A., 30 Mass. App. Ct. at 372-373. In
these circumstances, the wife has not shown that the judge
abused her discretion in denying the motion to alter or amend
the judgment to take account of tax consequences.
Amended judgment of divorce
nisi affirmed.