Title: BREITENSTINE v. BREITENSTINE

State: wyoming

Issuer: Wyoming Supreme Court

Document:

BREITENSTINE v. BREITENSTINE2003 WY 1662 P.3d 587Case Number: 02-15Decided: 01/30/2003
October Term, A.D. 2002

 
 

 

JERALD 
R. BREITENSTINE,

 

Appellant(Defendant) 
,

 

v.

 

NANCY 
L. BREITENSTINE,

 

Appellee(Plaintiff) 
.

 

 

 

The 
Honorable D. Terry Rogers, Judge

 

Representing 
Appellant:

Andrea 
L. Richard of Rothgerber, Johnson & Lyons, LLP, Cheyenne, WY; and 
Christopher H. Hawks of Hawks & Levy, LLC, Jackson, WY.  Argument by Ms. 
Richard.

 

Representing 
Appellee:

W. 
Keith Goody of Jackson, WY.  
Argument by Mr. Goody.

 

Before 
HILL, C.J., and GOLDEN, LEHMAN,* KITE, and VOIGT, JJ.

 

 

*Chief 
Justice at time of oral argument.

 

LEHMAN, 
Justice.

 

[¶1]      Jerald 
Breitenstine (Husband) appeals the property division ordered by the district 
court in conjunction with his divorce.  
Husband claims the district court erred in its division of the marital 
estate between him and Nancy Breitenstine (Wife).  We find the trial court did not abuse 
its discretion and, therefore, affirm with modification.

 

 

ISSUES

 

[¶2]      Husband presents 
and we consider the following three issues on appeal:

 

I.  The 
trial court abused its discretion by disregarding the evidence that gifts and 
inheritance from Mr. Breitenstine's parents to Mr. Breitenstine accounted for 
substantially all of the assets at issue, and erred by including Mr. 
Breitenstine's inher­ited assets in the marital estate and awarding the bulk 
of Mr. Breitenstine's inherited assets to Ms. 
Breitenstine.

 

II.  The 
trial court attempted to punish Mr. Breitenstine by awarding substantially all 
of Mr. Breitenstine's inherited assets to Ms. Breitenstine and in doing so, 
issued erroneous findings of fact that are not supported by the 
record.

 

III.  The 
trial court attempted to punish Mr. Breitenstine by exceeding its jurisdiction 
and ordering territories outside the state of Wyoming to take action with 
respect to Mr. Breitenstine's assets.  

 

 

FACTS

 

[¶3]      Husband and Wife 
married on June 30, 1979, in Canton, Ohio.  
During the course of their marriage the couple had two children.  Early in the marriage, Wife attended 
college full time and worked.  
Husband worked intermittently at a landfill operated by Breitenstine 
Land­fill, Inc.  Wife's earnings 
supported the family during that time.  
Husband's parents initially owned all stock in Breitenstine Landfill, 
Inc.  Husband received shares of 
stock in the early part of the marriage; this stock represented twenty-one 
percent of the outstanding stock.  
In 1989, Breitenstine Landfill, Inc. sold for about $30 million.  The sale took place as one 
trans­action but it involved three parts:  1) the sale of the actual land on which 
the landfill was situated, 2) the sale of the corporation itself, and 3) the 
sale of the farm adjacent to the land­fill owned by Husband and his 
father.  The sale was structured in 
a manner so that Husband and his father received the money from the sale of the 
farm, each owner received compensa­tion for their outstanding shares of 
stock, and Husband's parents received the proceeds from the sale of the landfill 
itself.  Husband's portion of the 
sale proceeds amounted to $106,550. 

 

[¶4]      However, as was 
contemplated by the parties when structuring the sale, that same year Husband 
received a gift from his father in the amount of $1.9 million and a gift from 
his mother in an identical amount.  
Husband placed the money from these gifts into Husband and Wife's joint 
account.  Both parties had access to 
the joint account and used the funds in the account of their own free will.  The money was co-mingled with other 
marital property, and thereafter the couple lived off these funds or the income 
from investments purchased with these funds.  After the receipt of these funds, in an 
effort to minimize taxes, Husband wanted to move offshore.  The couple moved to the Bahamas in 
1989.  Husband's father died in 
1994, and around that time the marriage began to have trouble.  In 1994, Wife went on a hunting trip 
with her brother to Jackson Hole, Wyoming.  
She liked the area and, after dis­cussions with Husband, both decided 
that a home should be purchased in Wyoming.  After remodeling and renovation, the 
home cost approximately $2.2 million, a substantial portion of which was paid 
for out of the joint account.  
Shortly after this purchase, the marriage began to further 
deteriorate.  The parties separated 
for a short time but then reconciled in March of 1995. 

 

[¶5]      In April of 1995, 
Husband received another sum of money from his mother which the parties 
stipulated was inheritance from his father's estate.  This sum amounted to approxi­mately 
$4 million.  In November of 1995, 
Husband created the Breitenstine Family Trust (family trust) and transferred a 
substantial portion of the marital assets to the trust.  In November of 1996, the couple 
separated again, and Wife filed for divorce.  However, Wife dismissed the divorce at 
Husband's request with the promise of marriage counseling.  Nevertheless, in April of 1997 the 
couple separated for the final time.  
During the time between the creation of the family trust and the hearing 
for division of marital property, Husband continued to make transfers of 
property to the family trust. 

 

[¶6]      Wife filed for 
divorce in Wyoming, and the divorce was granted February 16, 1999.  Yet, the property division matters were 
not heard until January 29, 2001.  
On August 17, 2001, the district court entered findings of fact, 
conclusions of law, and judgment related to the property division matters.  The district court's findings concluded 
in relevant part that the total marital estate was at least $8,764,673, made up 
almost entirely of the gifts from Husband's parents.  The judgment awarded Wife $2,000 per 
month in alimony and one-half of the marital estate.  Husband appeals this 
judgment.

 

 

STANDARD 
OF REVIEW

 

[¶7]      Decisions 
concerning the division of marital property are within the sound discretion of 
the trial court.  The disposition of 
marital property will not be disturbed on appeal unless there was an abuse of 
discretion.  Hall v. Hall, 
2002 WY 30, ¶12, 40 P.3d 1228 ¶12 (Wyo. 2002) (citing Davis v. Davis, 980 P.2d 322, 323 (Wyo. 1999)).  
Property divisions are com­plex and therefore require the trial 
court, in its discretion, to assess what is right under the circumstances 
considering the respective merits and needs of the parties.  McCulloh v. Drake, 2001 WY 56, 
¶15, 24 P.3d 1162, ¶15 (Wyo. 2001) (citing France v. France, 902 P.2d 701,703 (Wyo. 1995); Neuman v. Neuman, 842 P.2d 575, 578 (Wyo. 1992); 
Kennedy v. Kennedy, 456 P.2d 243, 247 (Wyo. 1969)).  "An abuse of discretion occurs when the 
prop­erty disposition shocks the conscience of this court and appears so 
unfair and inequitable that reasonable people cannot abide it."  Hall, at ¶12.   In our review, we consider only 
the evidence of the prevailing party, granting the prevailing party every 
reasonable inference to be drawn from the evidence.  We omit from consideration evidence 
presented by the unsuc­cessful party.  
Johnson v. Johnson, 11 P.3d 948, 950 (Wyo. 2000) (citing Bailey 
v. Bailey, 954 P.2d 962, 965 (Wyo. 1988); Grosskopf v. Grosskopf, 677 P.2d 814, 818 (Wyo. 1984)).

 

 

DISCUSSION

 

 

[¶8]      Husband claims 
the trial court erred in the division of the Breitenstine marital 
prop­erty.  He contends that the 
gifts and inheritance from his parents should not have been awarded to 
Wife.  Husband argues that in 
dividing the marital estate the trial court ignored a material factor deserving 
significant weight, i.e., the party through whom the property was acquired.  Citing McCulloh v. Drake, ¶15, Husband further asserts "in Wyoming, property 
inherited or gifted to one spouse is awarded to the spouse who received 
it."  We 
disagree.

 

[¶9]      The division of 
marital property is controlled by Wyo. Stat. Ann. § 20-2-114 (LexisNexis 
2001):

 

            
In granting a divorce, the court shall make such disposition of the 
property of the parties as appears just and equitable, having regard for the 
respective merits of the parties and the condition in which they will be left by 
the divorce, the party through whom the property was acquired and the burdens 
imposed upon the property for the benefit of either party and children.  
 

A 
reading of the statute indicates that the party through whom the property was 
acquired is one of the multiple factors the trial court considers 
in determining the appropriate division of property.  In McCulloh, we made it clear 
that property inherited by one party can be awarded to the party 
by whom it was inherited or given.  
McCulloh, at ¶15.  But 
we did not hold that property inherited by one spouse must always be awarded to 
the spouse that received it.  Before 
the McCulloh decision, we said no hard and fast rules govern property 
divisions.  Moore v. Moore, 
809 P.2d 261, 265 (Wyo. 1991) (citing Dennis v. Dennis, 675 P.2d 265 
(Wyo. 1984); Klatt v. Klatt, 654 P.2d 733 (Wyo. 1982); Paul v. 
Paul, 616 P.2d 707 (Wyo. 1980)).  
We continue to adhere to that principle.  We have never established bright line 
rules for the disposition of a gift or inheritance, and we do not do so 
now.  Instead, we review whether the 
trial court considered the appropriate factors in making the disposition.  The particular circumstances of the case 
dictate the property distribution.  
Bricker v. Bricker, 877 P.2d 747, 750 (Wyo. 1994) (citing 
Biggerstaff v. Biggerstaff, 443 P.2d 524, 526 (Wyo. 
1968)).

 

[¶10]   In its findings of fact, the trial 
court stated "[t]he gifts from the Defendant's parents and the proceeds 
therefrom account for substantially all of the marital estate subject to 
divi­sion by this Court."  
Clearly, this statement indicates the district court considered through 
whom the property was acquired.  
Nothing in the statute or our case law would then require the district 
court to award this entire amount to Husband.  The district court also has to weigh 
other appropriate factors.  

 

[¶11]   For instance, consideration must be 
given to the respective merits of the parties.  The district court's findings of fact, 
all of which are supported by the record, include considera­tion of this 
factor. The district court found that Husband was able to account for 
$11,092,316 of income into the marital estate and only $3,545,048.78 in 
disbursements.  Yet, Husband claimed he was worth only $1.5 
million.  Because Husband 
offered no evidence to account for where all the assets went, the judge was free 
to conclude that he still had them.  
During the course of the marriage, the couple created a trust account for 
each child (children's trusts) with a $500,000 initial deposit for each 
trust.  Husband regularly withdrew 
money from the children's trusts and converted at least a portion of the funds 
to his own use necessitating his removal as trustee.  Husband took substantial steps to 
secrete his assets in protection trusts and various corporations.  Husband never produced a proper 
accounting of these trusts and corporations.  Instead, Husband left the district court 
to guess at their purpose and value.   

 

[¶12]   Furthermore, Wife gave up work and 
moved to the Bahamas to help Husband avoid taxes.  This can be said to contribute to the 
value of the assets.  For a time, 
the move to the Bahamas made home schooling necessary, and Wife took care of 
those duties.  For tax minimization 
reasons, the couple returned to Ohio on only a limited basis.  Wife assisted in this strategy by 
staying offshore away from family and friends.  The couple also invested together; they 
used his name, her name, both names, and the kids' names.  For all intents and purposes the money 
was treated as marital property once it was received. 

 

[¶13]   The district court also considered 
the conditions in which the parties may be left after the divorce.  As the district court recognized and the 
record reveals, the couple had little property that was not either inherited or 
gifted assets or purchased with such assets.  This was due in part to the fact that 
immediately after the sale of the landfill both Husband and Wife stopped working 
and decided to live on the sale proceeds and income from investments made with 
the proceeds.  Under the 
circumstances, the district court could reasonably conclude that Wife should not 
be left without any property.   
Likewise, Wife resumed teaching after the separation, but she and the 
children now live in a diminished lifestyle.  Husband, on the other hand, is 
unem­ployed and still enjoys his considerable wealth.  

 

[¶14]   Additionally, Wife was awarded 
custody of the children.  Up until 
the point of the prop­erty division, Husband had not paid any child or 
spousal support though ordered to do so.  
The district court was well within its discretion to contemplate 
Husband's reluctance to pay alimony and child support in the past and burden the 
assets for the benefit of Wife and the children.   We find, therefore, that the court 
considered and weighed all the appropriate factors.  

 

[¶15]   Furthermore, we disagree with 
Husband's assertion that Wife received all of the mari­tal assets.  Wife was awarded one-half of the marital 
estate.  The district court's 
judgment did order assignment to Wife of all the property and assets of Husband, 
but read fully, such assignment was only to the extent necessary to satisfy the 
judgment, provide for alimony, and provide for child support.  Once the judgment and orders of the 
court are complied with, Wife has no claim to Husband's remaining assets.  The district court's action was to aid 
in collection, which is entirely appropriate given Husband's lack of compliance 
up until that point.  Likewise, we 
consider that a portion of Wife's share of the marital estate included the 
property in Jackson.  Based on the 
purchase price and renovation costs, the district court therefore deducted $2 
million from the amount Husband owed Wife.  
However, some testi­mony indicated that this property was only worth 
$950,000.  Should the $950,000 
valuation turn out to be accurate, Wife will actually receive less than one-half 
of the estate. 

 

[¶16]   Considering the above-mentioned 
facts, nothing in the property distribution of this case shocks the conscience 
of the court.  As such, we do not 
find the division to be unjust or inequitable.  The district court considered the 
appropriate criteria and did not therefore abuse its discretion.  

 

            

[¶17]   Husband contends that the trial 
court attempted to punish him by awarding substan­tially all of his 
inherited assets to Wife.  He claims 
that in order to accomplish this end, the trial court issued erroneous findings 
of fact that are not supported by the record.  We have stated that when making a 
property division, the trial court in its discretion may consider the fault of 
the respective parties, but the division must not be done with the intent to 
punish one of the parties.  
Carlton v. Carlton, 997 P.2d 1028, 1034 (Wyo. 2000).  Accordingly, "[f]indings of fact not 
supported by the evidence, contrary to the evidence, or against the great weight 
of evidence cannot be sustained."  
Id. (citing Jones v. Jones, 858 P.2d 289, 291 (Wyo. 
1993)).  Generally, evidence of an 
intent to punish a party can be found in an unjust or inequitable property 
division.  Beckle v. Beckle, 
452 P.2d 205, 208 (Wyo. 1969).  As 
noted above, we do not find the award to be unjust or inequitable.  However, because Husband asserts the 
district court made erroneous and unsupported findings of fact in an attempt to 
punish him, the issue bears further analysis. 

 

[¶18]   The particular finding of fact that 
Husband takes issue with states: "The [family] Trust was created for the sole 
purpose of defrauding the defendant's creditors and potential creditors, 
including the plaintiff, Nancy L. Breitenstine."  In determining whether such a finding is 
erroneous, we begin our analysis by considering the Uniform Fraudulent 
Convey­ance Act as expressed in Wyo. Stat. Ann. § 34-14-108.  "Every conveyance made and every 
obligation incurred with actual intent, as distinguished from 
intent presumed in law, to hinder, delay, or defraud either 
present or future creditors, is fraudulent as to both present and 
future creditors." (emphasis added).  
Our case law indicates that an intent to hinder or delay creditors is 
enough to consider the conveyance fraudulent even if there was no actual 
fraud.  Matter of Estate of 
Reed, 566 P.2d 587, 590 (Wyo. 1977).  
The determining factor in this instance is Husband's intent when 
transferring marital assets to the trust.  
If Husband transferred the assets to the family trust with the intent to 
hinder, delay, or defraud either his present or future creditors, then such a 
transfer is fraudulent.  

 

[¶19]   A fraudulent conveyance is by its 
very nature hard to substantiate.  
Considering § 34-14-108, much of the difficulty stems from the virtual 
impossibility of proving actual fraudu­lent intent.  In response to the difficulty, this 
court and other courts have come to rely on inferences and presumptions drawn 
from the surrounding circumstances.  
We have stated:  "It is not 
necessary to prove a fraudulent conveyance by direct evidence, circumstantial 
evidence being sufficient."  
Reed, 566 P.2d  at 591.  
"The only way of determining actual intent to hinder or delay creditors 
is by a consideration of the circumstances surrounding the transaction."  Smith, Keller & Assoc. v. Dorr 
& Assoc., 875 P.2d 1258, 1269 (Wyo. 1994) (quoting Matter of Estate 
of Reed, 566 P.2d at 591).  
Circumstantial evidence of intent in these cases also often takes the 
form of certain badges of fraud.  We 
have defined badges of fraud as "a fact tending to throw suspicion upon the 
questioned transaction, excites distrust as to bona fides, raises an inference 
that a conveyance is fraudulent and by its presence usually requires a showing 
of good faith."  Reed, 566 P.2d  at 589.   

 

[¶20]   In Reed, we enumerated 
several "badges of fraud" including transfers of property with­out 
consideration, hurried transaction not in the normal course of business, the 
convey­ance occurs after notice of pending action, and the relationship 
between the parties to the conveyance.  
Id. at 590.  The 
badges of fraud now recognized by courts have grown too numerous to completely 
list.  However, the more common 
badges of fraud include: lack or inadequacy of consideration, close familial 
relationship or friendship among the parties, retention of possession or benefit 
of the property transferred, the financial condition of the transferor both 
before and after the transfer, the chronology of events surrounding the 
trans­fer, the transfer takes place during the pendency or threat of 
litigations, and hurried or secret transactions.  See Walsh v. Walsh, 841 P.2d 831, 839 (Wyo. 1992); Consumers United Ins. Co. v. Smith, 644 A.2d 1328 (D.C. 1994); Diss v. Agri Bus. Int'l, 670 N.E.2d 97 (Ind. Ct. App. 
1996); Berger v. Hi-Gear Tire & Auto Supply Inc., 263 A.2d 507 (Md. 
1970); Coleman-Nichols v. Tixon Corp., 513 N.W.2d 441 (Mich. Ct. App. 
1994); Jones v. Arnold, 900 P.2d 917 (Mont. 1995).  Even though the catalog of badges of 
fraud is lengthy, a single badge of fraud may stamp a transaction 
fraudulent.  Reed, 566 P.2d  
at 589.  Because it is impossible to 
look into Husband's mind to determine his actual intent, we consider the 
sur­rounding circumstances and the family trust itself.  

 

[¶21]   The trial court found that the 
family trust was an asset protection trust.  A special expert was appointed by the 
court to review the family trust and present testimony.  The special expert intimated that 
because the family trust was located in the Commonwealth of the Bahamas the 
family trust would be considered an offshore asset protection trust (OAPT).1  We agree.  We would note that many badges of fraud 
can be found in the very form of the family trust.  Even though OAPTs themselves are legal, 
we must consider the purpose for which the assets were transferred to the family 
trust.  If the sole purpose of the 
transfer was to place assets beyond the reach of present or future creditors, we 
consider this an "intent to hinder or delay" under the fraudulent conveyance 
act.  While there are surely some 
legiti­mate reasons for establishing OAPTs, such as estate planning or tax 
planning, the exclusive intent to hinder creditors is not such a legitimate 
reason.

 

[¶22]   Considering, as the district court 
did, the family trust itself and the circumstances sur­rounding the 
establishment of the family trust, we see many badges of fraud.   The transfer to the family trust 
named the children as beneficiaries.  
Certainly this would be a close familial relationship.  Furthermore, although the family trust 
names the children as beneficiaries, Husband receives the benefit from the 
family trust.  Looking at the 
overall scheme of the family trust, the children get no benefit because the 
income is accumulated and the family trust ends in 2005 at which time the assets 
will be returned to Husband.  
Husband would not even have to wait until 2005 to realize income from the 
trust as the family trust allows Husband himself to become a beneficiary.  

 

[¶23]   Further, Husband has retained the 
possession or benefit of the property transferred.  The family trust assets are entirely 
within Husband's control, which is why he is being taxed on the income to the 
family trust, and the family trust assets would be 
included in his estate should he die.  Husband has named a "protector"2 over the trust assets who is a 
long-time friend of Husband's who even Husband agreed would act in Husband's 
best interests not necessarily the children's.  For all practical purposes, Husband has 
given the assets to him­self with the benefit of a spendthrift 
provision.  

 

[¶24]   Moreover, the timing of the family 
trust is suspicious.  Only after the 
first separation and the subsequent reconciliation did Husband decide to make 
the family trust.  Clearly, Husband 
was on notice of threatened litigation as the couple had separated for a time 
before he created the family trust.  
Husband created the family trust in secret and then continued to transfer 
assets to the family trust up until the property division hearing.  The district court also heard evidence 
of other transfers Husband made into corporations to protect his assets.  Husband's own accountant agreed such 
steps were taken solely for asset protection from creditors.  The special expert stated that the 
purpose of the family trust was to protect the assets from Husband's creditors, 
perhaps including Wife.  

 

[¶25]   The district court has discretion 
to weigh the evidence and the credibility of the witnesses.  The district court clearly recognized 
the multiple badges of fraud accompanying the transfers to the family trust and 
determined Husband's actual intent in making such trans­fers was simply to 
hinder, delay, or defraud Husband's creditors including Wife.  Reviewing the record as discussed above, 
we cannot say these findings of fact are erroneous.

 

 

[¶26]   Lastly, Husband claims that, in an 
effort to punish him, the district court exceeded its jurisdiction by ordering 
territories outside Wyoming to take action on assets held by Husband.  We have said: 

 

We 
think the issue settled, at least since Fall v. Eastin, 215 U.S. 1, 30 S. Ct. 3, 54 L. Ed. 65 (1909), 23 L.R.A.,N.S., 924 that the court of one state has 
no power to directly affect title to land located wholly within the borders of 
another.  Decrees and judgments 
purporting to this effect are void, and to the extent the decree before us 
purports to so do it must fail.  
However, we consider it equally well established that a court of equity 
having authority to act upon the person may indirectly act upon real estate 
located in another state, through the instrumentality of its equity power over 
the person.  Fall v. Eastin, 
supra;  Rozan v. Rozan, 49 Cal. 2d 322, 317 P.2d 11 (1957), reh. denied;  Weesner v. Weesner, 168 Neb. 346, 
95 N.W.2d 682 (1959);  McElreath 
v. McElreath, 162 Tex. 190, 345 S.W.2d 722, reh. denied (1961);  34 A.L.R.3d 962.

 

Kane 
v. Kane, 
577 P.2d 172, 175-76 (Wyo. 1978).  
One equitable function of the court is the 
disposition of property.  When the 
court has jurisdiction over the parties in a divorce action, the court has the 
power to settle property matters even if the property is not located in the 
jurisdiction.  Id.  We distinguish between a judgment 
directed at the property itself and one directed against the owner of the 
property.  Id. at 176.   The district court's judgment does 
appear to attempt to direct judgment on both the property itself and the owner 
of the prop­erty.  The former 
cannot stand, but the later can.  
Id.  We, therefore, 
recognize that the judgment can properly operate upon Husband himself with 
modification and direct such modification to strike the improper portions.  The judgment ordered by the district 
court reads as follows:

 

3.      
All 
property and assets of the defendant, or under the control of the defendant, of 
whatsoever kind or description, whether real, personal, or mixed, and 
wheresoever situate, whether within the State of Wyoming or without the State of 
Wyoming, should be frozen forthwith; and the defendant and all other persons or 
entities, of whatsoever kind or description, and wheresoever located or 
resident, should be, and hereby are, ordered to take no action of whatsoever 
kind which might have the effect of removing any such asset from the 
jurisdiction of any court of any state or territory of the United States or from 
the jurisdiction of any of the Courts of the United 
States.

 

4.      
All 
property and assets of the defendant, of whatsoever kind or description, or 
under the control of the defendant, whether real, personal, or mixed, or under 
the control of the defendant, whether real, personal, or mixed, [sic] and 
wheresoever situate, whether within the State of Wyoming or without the State of 
Wyoming, are hereby assigned to the plaintiff as her sole and separate property, 
to the extent necessary to satisfy the judgment hereby awarded in favor of the 
defendant, provide for the ali­mony payments herein ordered, provide for the 
child support payments herein ordered, or to comply otherwise with the orders of 
this Court. 

 

The 
above-mentioned paragraphs should be modified to read as 
follows:

 

3.      
The 
defendant should be, and hereby is, ordered to take no action of whatsoever kind 
which might have the effect of removing any asset under the control of the 
defendant from the jurisdiction of any court of any state or territory of the 
United States or from the jurisdiction of any of the Courts of the United 
States.

 

4.      
The 
defendant is directed to assign property within his control to the plaintiff as 
her sole and separate property, to the extent nec­essary to satisfy the 
judgment hereby awarded in favor of the plaintiff, provide for the alimony 
payments herein ordered, pro­vide for the child support payments herein 
ordered, or to comply otherwise with the orders of this 
Court.

 

 

 

CONCLUSION
 

[¶27]   Husband has not shown the district 
court abused its discretion in its division of mari­tal property.  Therefore, the judgment of the district 
court is affirmed with modification consistent with this 
opinion.

 

FOOTNOTES

1We 
have not previously addressed OAPTs but other courts have.  Generally, OAPT's are trusts established 
in a foreign jurisdiction to protect assets from creditors without requiring the 
settlor to lose control over the assets.  
See S.E.C. v. Brennan, 230 F.3d 65 (2nd Cir. 2000); 
FTC v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 
1999).  Because it is outside the 
scope of this opinion to discuss the merits of OAPTs, we decline to do so.  However, the characteristics of and the 
motives for establishing such trusts are known to us.  While such trusts may have benefits in 
asset protection, the use of such trusts to avoid alimony, child support, and a 
fair division of marital property upon divorce is reprehensible to 
us.

 

2The 
"protector" of an offshore asset protection trust generally oversees the 
trustee's actions and can consent or veto those actions at the protector's 
discretion.  The protector also 
generally has the power to remove the trustee.  See FTC v. Affordable Media, LLC, 
179 F.3d 1228, 1242 (9th Cir. 1999).