Opinion
No. FA06 401 79 50
January 8, 2009
MEMORANDUM OF DECISION
The parties intermarried on November 3, 1990 at Stamford, Connecticut. The defendant's birth name was Karen R. Blueweiss. There are two minor children issue of the marriage, Kyle Owen Tuckman, born May 1, 1994 and Lauren Hope Tuckman, born April 25, 1996. The Court has the requisite jurisdiction and neither of the parties has been the recipient of state or local assistance. The parties' marriage has broken down irretrievably.
The plaintiff father is 46 and the defendant mother is 47. The parties hereinafter shall be referred to as parties or husband and wife. The parties have been married for almost eighteen years but separated approximately two years ago. Wife testified at her deposition in April of this year that she attributed fault for the breakdown 50/50 to both parties. Essentially, husband claims wife was at fault because of her lax discipline as it relates to the two children, her lack of interest in sexual activity, and her unwarranted and unjustified challenge to his use of her assets.
Wife claims that the causes for the breakdown of the marriage are essentially his infrequent criticism of her, inappropriate comments as to her attire, his absence from the home from early morning to late at night, and his interest in S.W. The claim that he was away for long hours is empty because of his commute and the fact that he was actually engaged in the pursuit of his business and required the income. While wife's testimony as it relates to his relationship with S.W. is supported by numerous and extensive cell phone records between husband and S.W. while the parties were living together, there is no hard evidence that a sexual liaison was taking place prior to the parties' separation. Both S.W. and husband were going though domestic difficulty with their respective spouses and their communication has been explained as commiseration. There is a wide gulf between the cell phone and the bedroom. Essentially the claims of fault for the breakdown are no more than those that occur in an ordinary marriage. As it relates to fault neither party is to blame — it is just a marriage that despite the parties' efforts it did not succeed.
The Court has carefully considered all of the criteria set forth in Connecticut General Statutes §§ 46b-81 and 46b-82 in entering its orders. The Court has also considered the gross and net income of the parties.
The Court must first decide the threshold question as to whether or not the Trust (Ex. 68) is an asset belonging to the wife and subject to payment to her of its principal and interest. The next question the Court must decide is whether or not the Court can consider its value in making a decision as to the award of alimony and how much, if any, shall be awarded. Wife claims that she irrevocably transferred a substantial portion of her assets to the trust prior to her marriage that included most of her existing assets as well as future assets as they were to be acquired. Her intention was that her anticipated husband would not be aware of the deployment of her assets. This is clearly manifested by the overwhelming evidence. Her intended result would be that her Estate would go to her contemplated children at her death. The Court finds that husband refused to execute a prenuptial agreement that was submitted to him some two weeks prior to their marriage and in order to obtain a result that would keep her assets from him, she executed a trust agreement dated October 24, 1990 (Ex. 68) that provided that her two brothers as trustees could distribute all or any part of the trust principal to her as grantor pursuant to paragraph 4(1) of said agreement. This is by no means an irrevocable trust.
The actions of the grantor and the trustees from October 24, 1990, the date of the contested trust document (Ex. 68), are consistent with the claim of the husband that there was never an intention of divulging to him the existence of a trust. The trustees were careful not to make a paper trail by filing tax returns on behalf of the trust or reporting the tax on the income of the assets of the trust. Nothing in this decision should be construed to suggest that the grantor or the trustees had any legal obligation to disclose to the husband the internal workings of the Blueweiss family enterprises, but evidence of concealment can certainly be considered in determining the intentions of the trustees at the time when (Ex. 68) was prepared and executed. Whether or not as husband claims, wife's assets are hers individually or are a funded trust really makes no difference. The $169,000 Newberger/Berman account is clearly in an irrevocable trust and is not an asset that is accessible to her and should not be considered as part of her estate. The legal owner of the assets in the purported trust is the grantor.
Even if paragraph 4(1) in Ex. 68 the instrument prepared by wife's family attorney in Lake Success, New York shortly before the parties' wedding could be augmented, 2(a) of the agreement provides that the grantor, Karen Tuckman, could in theory exhaust all the principal to meet medical and dental bills and other emergency expenses for herself and those of the minor children. The wife has never taken any steps to actualize or effectualize the trust. The word "trust" is unsubtedly avoided in all documentation that has been offered in evidence. No gift tax returns have ever been filed, all income has been reported as ordinary income on individual returns, there has been no trust accounting prepared or filed, all of the purported trust assets have stood in wife's name, individually, the books by the nomenclature of the accounts show nothing about a trust, the tax filings for BJK designate the wife as the owner of her interest — not a trust — and the wife's tax filing for OLI show the wife as the sole owner of her interest. If ever a factual basis could be established to show that the "trust" was in fact not a trust, this Court cannot conceive of one. During the trial the wife admitted that all the assets stand in her name except for Newberger-Berman. She admitted that she is the actual shareholder in OLI and a partner in BJK. All of the income from BJK and OLI is paid to her directly and not through any trust.
While a portion of wife's assets were acquired prior to the parties' marriage, this Court must consider all of the parties' respective assets. The method of distribution of assets is described in Bender v. Bender, 258 Conn. 733, 742 (2001) and governed by Conn. Gen. Stat. § 46b-81 as an all-property equitable scheme that is not limited by timing, date of acquisition or source of funds the property subject to the Court's allocative power. Trial courts are empowered to deal broadly with property and its equitable division incident to dissolution proceedings. Jewett v. Jewett, 265 Conn. 669 (2003); Lopiano v. Lopiano, 247 Conn. 356 (1998); Czarzasty v. Czarzasty, 101 Conn.App. 583 (2007). This principle can be applied to a gift or inheritance obtained by a party.
The seminal case that is most significant in a resolution of the "trust" issue is Greenwich Trust Co. v. Tyson, 129 Conn. 211, 27 A.2d 166 (1942). A judgment creditor of the settlor brought suit to reach his interest under the trust. Maltbie, C.J., said:
The outstanding factor in the situation is that, under a trust where the trustee has absolute discretion to pay the income or expend it for the settlor's benefit, the trustee could even though he had a like discretion to expend it for others, still pay it all to the settlor. Such a trust opens the way to the evasion by the settlor of his just debts, although he may still have the full enjoyment of the income from his property. To subject it to the claims of the settlor's creditors does not deprive others to whom the trustee might pay the income of anything to which they are entitled of right; they could not compel the trustee to use any of the income for them. The public policy which subjects to the demands of a settlor's creditors the income of a trust which the trustee in his discretion may pay to the settlor applies no less to a case where the trustee might in his discretion pay or use the income for others.
In Ware v. Gulda, 331 Mass. 68, 117 N.E.2d 137 (1954) a woman transferred a sum of money to her son in trust to expend "the income and/or principal" for her support in his sole discretion, and on her death the property was to go to her son and her two daughters. It was provided that the interest of the beneficiaries should not be assigned or subject to the claims of creditors. A creditor brought this suit to reach her interest. It was held that he could reach both income and principal. The court quoted the Restatement of Trusts § 156(2), which states that where a person creates for his own benefit a discretionary trust, his transferee or creditors can reach the maximum amount that the trustee under the terms of the trust could pay to him or apply for his benefit. Wilkins, J., said: "Although every exercise of the power might take property away from the remainderman, that is no objection where the trustee could pay the entire principal to the creator of the trust."
In Connecticut Supreme Court case of North v. North, 183 Conn. 35 (1981), Judge Teller summarized the law as follows:
There can be no question that a court may assign property which either spouse receives through gift of inheritance. Section 46b-81(a) provides in relevant part that in a dissolution action, the court may "assign to either the husband of wife all or any part of the estate of the other." "The estate, as referred to in the statute, comprehends the aggregate of the property of each." And certainly, the estate of a spouse (which includes inherited property, as here) must be considered in fashioning award of property and alimony. Sections 46b-81 and 46b-82. Section 46b-81 does not limit, either by timing or method of acquisition of by source of funds, the property subject to a trial court's broad allocative power. Therefore, the gifted assets must be considered by this court in rendering its judgment of dissolution, and the concomitant financial awards. Leduc v. Leduc, 1996 WL 218715 at 6 (1996 Conn.Super).
In order for a valid trust to exist, the corpus must be legally transferred to the trustee. The law on this is clear.
90 Corpus Juris Secundum, Trusts summarizes the general rules as follows:
90 C.J.S. 17: Elements and Requisites
In order to constitute an express trust there must be an explicit declaration of trust, or circumstances which show beyond reasonable doubt that a trust was intended to be created, followed by an actual conveyance or transfer, of lawful, definite property, or estate or interest, made by a person capable of making a transfer thereof, for a definite term. The conveyance must vest the legal title presently in a person capable of holding it, to hold as trustee for the benefit of a beneficiary or purpose to which the trust fund is to be applied, or there must be a retention of title by the owner under circumstances which clearly and unequivocally disclose an intent to hold for the use of another. (Internal citations omitted).
An inter vivos trust cannot arise when the settlor retains both full equitable interest and legal title in the trust property, since the essential character of a trust is that the settlor effects a separation of these interests in the trust property. (Internal citations omitted.)
90 C.J.S. § 59: Delivery or Possession of Personal Property
No trust is established where the trust agreement requires the delivery of property to the trustees, and no property is delivered to the trustees.
The common-law rule is that in order to establish a trust, there must be a transfer of property. Moreover, no trust is established where the trust agreement requires the delivery of property to the trustees, and no property is delivered to the trustees.
90 C.J.S. § 68: Transfer of Title or Interest
Before property can be said to be held in trust by the trustee, the trustee must have legal title.
By definition, the creation of a trust must involve a conveyance of property, and before property can be said to be held in trust by the trustee, the trustee must have legal title. Thus, to create an enforceable trust, it is necessary that the donor or creator part with his or her interest in the property to the trustee by an actual conveyance or transfer. Aside from the situation in which a settlor of a trust declares himself or herself trustee, separation of the legal and equitable interests must come about through a transfer of the trust property to the trustee. Indeed, for a trust to be a trust, legal title of the trust property must immediately pass to the trustee, and the beneficial or equitable interest to the beneficiaries. In order to create a trust fund the fund must be set aside either actually or constructively, and the fund or other property must be so designated as to permit the passing of title to the trustee. (Internal citations omitted).
The Restatement (Second) of Trusts summarizes the rule as follows:
CT Page 2164
Rest.2d Trusts § 179: Duty to Keep Trust Property Separate
The trustee is under a duty to the beneficiary to keep the trust property separate from his individual property, and so far as it is reasonable that he should do so, to keep it separate from his individual property and thus, so far as it is reasonable that he should do so, to keep it separate from the other property nor subject to the trust, and to see that the property is designated as property of the trust.
Comment d. Duty to earmark trust property.
Ordinarily it is the duty of the trustee to earmark trust property as trust property. Thus, title to land acquired by the trustee as such should be taken and recorded in the name of the trustee as trustee. Certificates of stock should be issued in the name of the trustee as trustee. If bonds held in the trust are registered, they should be registered in the name of the trustee as trustee. If a bond is otherwise a proper trust investment, however, the mere fact that it is payable to bearer does not render it an improper trust investment, unless the terms of the trust prohibit holding securities payable to bearer; but the trustee should keep records showing that the bond is held by him as trustee. Deposits of trust money in a bank should be made in a separate account in the name of trustees as trustee. Deposits of trust money in a bank should be made in a separate account in the name of trustee as trustee.
The Connecticut Supreme Court has confirmed as "ancient but still sound law," the obligation that a trustee should "attach the trust label to the property [held by him in a fiduciary capacity] in whatever way is practical, considering the nature of the res." Chapter House Circle of the King's Daughters v. Hartford Nat. Bank Trust Co., 121 Conn. 558, 545 (1936), citing 3 Bogert Trusts Trustees, § 596.
Similarly, in MMI Investments, LLC v. Eastern Company, 45 Conn.Sup. 101 (1996) [ 18 Conn. L. Rptr. 368], Judge Fineberg adopted CT Page 2165 Restatement § 179 above and noted that it is a duty of a trustee "to see that trust property is designated as property of the trust." Id. at 120.
Here except for the single Newberger Berman account the absolute failure to earmark any asset as a part of a trust confirms that no trust exists. None of wife's assets have ever been designated assets of any trust with the exception of Newberger-Berman.
It should be noted that an examination of wife's tax returns shows that in 2006 her income was approximately $945,000 and the year before approximately $580,000. There is nothing before the Court to indicate that this income stream will ever be curtailed. Most of this income was acquired within the parties' marriage. Most of this income, some $6.7 million was kept segregated during the marriage. It was not primarily what she brought into the marriage but essentially what she acquired during the course of the marriage. The Court is not unmindful as to the wife's financial interest and business acumen in the family's furniture business. The Court heard extensive expert testimony as to valuation and finds that value of wife's interest at $1,250,000 and the testimony of husband's expert highly credible.
By some conjuration wife's interest in BJK has been reduced from 33 1/3% to 28% but this does not address the reality that the Blueweiss family is cohesive, allegiant and highly committed to each other and the company's propriety. The Court finds no hard evidence to find that wife's BJK interest has been watered down from 33 1/3% to 28%.
Orders
1. The marriage of the parties has broken down irretrievably and is dissolved.
2. Parenting Responsibility Plan.
The parties have entered into a well devised parenting plan (Court Ex. A. Attached.)* But there are a few glitches that remain to be resolved by the Court.
The father has the required firearms permit for all the firearms in his possession. He is aware of the safety requirements so no further conditions shall be imposed. Plaintiff shall have the option together with the guardian ad litem and the defendant to select a therapist for Kyle "within the system" of plaintiff's current health insurance policy and having offices located in the greater Stamford area. If the parents cannot agree the selection shall be made by the Guardian ad Litem after the Guardian ad Litem's discussion with Kyle. Lauren shall continue her treatment with Dr. Lustbader on an as needed basis and the parents shall equally share any of his charges not covered by the parties' medical insurance.
3. Alimony.
The wife has substantial assets available to her (at least $500,000 per annum) and the husband by way of an assignment of part of her assets as well as his own income mandates that no periodic alimony be awarded to either party.
4. Child Support
During their respective parenting time, each party shall pay for the day-to-day expenses of the children.
The parties shall equally share the cost of the following expenses for the children: tutors, recurring extra-curricular activities exceeding $50 per month, summer camp and/or summer programs. All such expenses must be approved in advance and in writing by both parties.
As a contribution towards expenses related to the children when they are with their mother, the husband shall pay child support to the wife in the amount of $250 per week for each child.
5. Property Division.
While husband's proposed orders suggest specific assets and how they should be allocated, the Court is very cognizant of the turmoil going on in the financial markets and would have to make almost daily examination to determine the current values of the specific assets so it is appropriate to make awards on a percentage basis. The parties can then make their actual division in a more discerning and careful manner. If the parties cannot do same upon submission the Court will do same. The parties shall for purposes of evaluation and distribution combine the following assets and divide same as follows: 67% to the wife and 33% to the husband.
Asset
Merrill Lynch Checking (9101)
Merrill Lynch CMA (9103)
Life Insurance Cash Value
Merrill Lynch IRA
The Monarch Fund IRA
JP Morgan Retirement Plan
Merrill Lynch 401k SIP (Vested Portion)
Merrill Lynch Ret. Accum. Plan
Aspen Yo, LLC
Aspen REPC II
Alley Cat
Merrill Lynch/Citicorp Restricted Shares
Citibank Checking
Fidelity SEP (5295)
Fidelity Simple SEP (6897)
Neuberger Berman IRA
Life Insurance Cash Value
Zander Blueweiss Estate Interest
Ivy Monarch IRA
Neuberger Berman (4520)
BJK 1/3 Interest — Pershing (0205) (Gardner Russo)
BJK 1/3 Interest — Neuberger Berman (0026)
Joint Ivy Regency Fund
Citibank Escrow Account distribution combine the following assets and divide same as follows: 67% to the wife and 33% to the husband.
6. Marital Home
The wife shall keep the family home as part of the overall asset distribution. Wife shall pay husband the sum of $528,183.00 in cash within sixty (60) days of the entry of judgment.
Husband shall simultaneously transfer by quit claim deed his interest in the home to the wife.
The court finds that the value of the marital home is $1,275,000 with a present equity of $1,056,366.
7. Post-Majority Education Support.
The Court shall retain jurisdiction to enter an education support order, upon motion or petition of either party, subsequent to the entry of the decree of dissolution of the marriage pursuant to the provisions of "Education Support Orders" (Conn. Gen. Stat. § 46b-56c).
8. Medical Insurance and Expenses.
The wife shall pay for and maintain each child's health insurance for so long as it is paid for as an incident of her employment at Offices Limited, Inc., (i.e. paid for by OLI) until such time as each child attains the age of eighteen (18) years or graduates from high school, whichever later occurs; except that in the event a child who has attained the age of eighteen (18) years shall not have graduated from high school, then, in that event, on the last day of the month in which the child either attains the age of nineteen (19) years or graduates from high school, whichever event first occurs. In the event the health insurance is not provided to the wife as an incident of her employment at Offices Limited, Inc., or any other employer who provides same, then the husband shall provide and maintain health insurance for the children. This obligation shall be considered in the nature of support and therefore subject to modification by the court based upon a change in circumstances.
The parties shall share the cost of all "non-elective" medical, dental, orthodontia, optical, surgical, hospital, psychiatric, psychological, psychotherapy and nursing expenses, and the cost of prescriptive drugs expenses for the benefit of their minor children except as otherwise set forth herein, for so long as the parties have a child support obligation pursuant to Conn. Gen. Stat. § 46b-84 with sixty (60%) percent being paid by the husband and forty (40%) being paid by the wife. The term "non-elective" shall mean that the healthcare expense is fully or partially covered by the wife's, or if applicable, the husband's health insurance plan. Any "elective" healthcare expenses shall also be shared by the parties with sixty (60%) percent being paid by the husband and forty (40%) percent being paid by the wife. No "elective" expenditure in excess of $250.00 shall be made by either party absent mutual written agreement, or order of the court. If so, the party making the expenditure shall be liable for 100% of the payment. Absent mutual agreement, or an emergency, the parties agree that all healthcare treatment (non-elective as well as elective) shall be within "network" (exclusive of doctors currently treating the children who have been previously agreed upon, or which have been approved by the court as appropriate treating health care providers). If either party goes outside the "network" without the other party's consent, or approval by the court in the event of disagreement between the parties, then he or she shall be responsible for any portion of the bill not covered by insurance.
For purposes of § 46b-84(e) of the Connecticut General Statutes, the wife and the husband shall be the "custodial parent," and their signature shall constitute a valid authorization to the insurer for purposes of processing an insurance reimbursement payment to the provider of medical services of the party who paid for the service. If a party who did not pay for the medical services receives an insurance reimbursement, that party shall promptly endorse the check over to the party who paid for the services.
The husband shall reimburse the wife for sixty (60%) percent, or the wife shall reimburse the husband forty (40%) percent, of the expenses referenced above immediately upon receipt of any bills or invoices evidencing the same prior to any future reconciliation after the receipt of any available insurance reimbursement.
Upon the entry of a judgment of dissolution the wife shall no longer have any responsibility for maintaining medical, hospitalization and/or dental insurance for the husband. The wife shall assist the husband with obtaining and completing whatever forms are necessary for him to obtain any valuable COBRA benefits as dictated by 29 U.S.C. § 1161 et seq., as amended. The husband shall be responsible for all payments associated with the same.
9. Division of Personal Property.
The wife shall retain all the tangible personal property located at 55 Davenport Farm Lane East, Stamford, Connecticut as well as the GMC Yukon. The husband shall transfer all his right, title and interest in the 200 GMC Yukon to the wife.
The husband shall retain all the tangible personal property located at his residence at 1450 Washington Blvd., Apt. 1001, Stamford, CT as well as the Land Rover.
The parties shall mutually agree upon an expenditure from any of the four custodial accounts for the benefit of the children, such agreement not to be unreasonably withheld.
10. Debts.
Except as otherwise ordered by the court, each party shall be responsible for any other liabilities listed on their respective financial affidavits.
11. Attorney Fees.
Each party shall be responsible for their respective attorney fees and costs.
12. Defendant's maiden name, Karen Blueweiss is ordered restored.
*Editor's Note: Exhibit A has not been reproduced herein.