A recent Florida judge's decision may be good news for those who are considering divorcing a spouse that has access to trust funds. According to a recent decision in the case of Berlinger v. Casselberry, spouses who draw funds from a discretionary trust may be liable to pay spousal support or child support from those funds in the future.
The Berlinger case centered around a couple who divorced after 30 years of marriage. The wife was awarded $16,000 per month in permanent alimony. However, her ex-husband stopped alimony payments while he continued to live a lavish lifestyle with his new wife bankrolled with funds from a trust account. Theoretically, the trust was not supposed to be accessible to creditors, but the judge ruled that the wife had a right to demand payment of her spousal support from those funds since they had been disbursed to the ex husband.
Under an earlier case, Bacardi vs. White, a Florida judge had ruled that a judge could not order a Trustee to make disbursements from a discretionary trust to pay child support or alimony. However, if disbursements were made from the trust for the benefit of the trust's recipient, those funds could be attached. The current ruling upholds and clarifies the Bacardi case ruling.
Spouses who are facing a divorce action that may involve trusts or other complicated financial issues may benefit from consulting a family law attorney with experience in handling such cases. A family law attorney may be able to give the partner advice on how to structure a settlement or how to pursue payment of spousal and child support.
Source: Wealth Management, "Update: Are Trust Funds Safe From Claims For Alimony or Child Support?", Barry A. Nelson, December 09, 2013