USA – MASSACHUSETTS TRENDS AND DEVELOPMENTS Contributed by: Caterina S Wurman and Madeline R Pelagalli, Fitch Law Partners LLP
quent calculation of child support using the parties’ income after alimony; • a calculation of child support first and alimo - ny second; and • a comparison of the total support award resulting from the first step and the second step, respectively, and the tax consequences of each support option. Additionally, Cavanagh v Cavanagh has broad - ened the pool of income and benefits that the court may now consider in the payor spouse’s income for purposes of setting support to include not only the payor’s contribution to their retirement or health savings account, but also the contribution to benefits made by the payor’s employer. How Trust Interests are Addressed in Divorce Actions The inclusion – or non-inclusion – of beneficial trust interests in the marital estate for purposes of an asset division incident to a divorce is quite often a hotly contested issue. Massachusetts courts have defined “property” broadly in the context of a divorce. It is fre - quently considered to be all property to which a party holds title, however acquired. Therefore, whether trust interests are included in the marital estate involves an assessment of the particulari - ties of each trust. With a trust, the discretion is often left to the trustees with regard to how the assets and/or related income will be distributed to the benefi - ciaries. Depending on the level of discretion, the benefit can become too speculative to establish a clear value to the beneficiary. That being said, if a party holds a beneficial interest in a trust that, prospectively, could be considered a sig - nificant future “acquisition of capital assets and
income”, it could affect how the court equitably divides other marital assets. In many cases, the question about the inclusion of a beneficial trust interest or its value hinges on whether the interest is “fixed and enforceable” or “too remote and speculative”. If it is the for - mer, more often than not, the trust (or its value) is likely to be included, in some measure, in the asset division – perhaps even in the support cal - culation. If it is the latter, the inverse is frequently the case (see, for example, Pfannenstiehl v Pfan - nenstiehl, 475 Mass 105, 110 (2016)). In other words, the question still rests on the par - ticular facts and merit on a case-by-case basis. However, a recent decision by the Massachu - setts Appeals Court, Jones v Jones (103 Mass App Ct 223 (2023)), suggests that Probate and Family Court judges should be leaning towards including more and more beneficial trust inter - ests in the marital estate when a trust beneficiary is getting a divorce. In the Jones case, the wife’s mother had estab - lished a trust, of which the wife (her daughter) and the wife’s brother were the sole beneficiar - ies. Upon the mother’s death, the assets held by the trust were to be divided into equal shares that were placed in separate trusts for the ben - efit of the wife and her brother. This provision was the apparent tipping point, as the court tried to determine whether the wife’s beneficial interest was fixed enough to be con - sidered an enforceable right, or whether it was a mere expectancy and thus too remote and speculative for inclusion in the marital estate. The court determined that the former argument held more sway, even though the wife had never received a distribution from the trust, the trust had a spendthrift provision, the trust was irrev -
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