Court Opinion

ID: 9522112
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:18:07.765121+00
Date Added: 2024-06-11T13:02:18.764996
License: Public Domain

Reiber, C.J.,
¶ 32. concurring and dissenting. I agree with the majority’s holding that a beneficial interest in a revocable trust is essentially equivalent to an interest in a will, and therefore a mere “expectancy” that must be excluded from the marital estate. Ante, ¶ 18. I disagree with its corollary holding that such an “expectancy” may nevertheless be considered in dividing the marital property. If speculative interests of this nature are unworthy of being included within the marital estate, I see no grounds for their legitimate consideration in assessing a party’s “opportunity ... for future acquisition of capital assets and income.” 15 V.S.A. § 751(b)(8). To predicate a division of marital property upon an interest “revocable at the will of the settlor, at any time and for any reason,” In re Marriage of Githens, 204 P.3d 835, 839 (Or. Ct. App. 2009), is no more fair or reasonable than attempting to apportion that interest. See id. at 843 (joining in the conclusion of nearly every other court that has addressed the issue in holding “that a beneficial interest in a revocable trust is not ‘property’ subject to division in a dissolution case”). I therefore respectfully dissent from that portion of the majority opinion concluding otherwise.
*504¶ 33. The majority asserts that excluding a revocable-trust interest from the marital estate “does not prevent it from being considered under § 751(b)(8).” Ante, ¶ 23. The rationale offered for this distinction is that the “opportunity” for capital acquisition requires only a “likelihood” of occurrence, not a “certainty.” Ante, ¶ 21. This reasoning is unpersuasive. To be sure, nothing is ever certain, and courts must have some leeway to prognosticate the future acquisition of assets and income. But those factors that have traditionally been cited as evidence of a party’s superior opportunity to earn and accumulate — a successful business, vested pension, professional degree or training, skilled work experience, and the like — all generally lie within the party’s application and control. This stands in sharp contrast to the absolute uncertainty inherent in a beneficial interest subject to revocation by a third party completely outside the control of the beneficiary, “at any time and for any reason.” In re Githens, 204 P.3d at 839.7
¶ 34. This absolute uncertainty explains why many courts have categorically rejected the notion that a mere “expectancy” under a will or a revocable trust may constitute a legitimate consideration in dividing marital property. The Connecticut Supreme Court’s decision in Rubin v. Rubin, 527 A.2d 1184 (Conn. 1987), is illustrative. There, the court considered whether a husband’s beneficial interest in his mother’s will and revocable inter vivos trust could be included within the marital estate or considered as a factor in the property division and alimony award. Relying on earlier precedent, the court concluded that these interests were “ ‘at best, speculative,’ ” the “ ‘bare hope of succession to the property of another,’ ” and therefore outside the marital estate. Id. at 1187 (quoting Krause v. Krause, 387 A.2d 548, 550 (Conn. 1978)).
¶ 35. The court went on to hold that such expectancies could not be considered in any respect in dividing the estate or awarding *505alimony. Id. at 1190. While acknowledging that family courts must often fashion awards “contingent upon some future event,” the court concluded that this discretion did not extend to an expectancy that “may never be realized because of diminution of the donor’s wealth or a change in the planned disposition of his property.” Id. at 1189. Indeed, to conclude otherwise, the court observed, would be to “sanction[] in a different guise an assignment of property not . . . within the jurisdiction of the court.” Id. at 1190.
¶ 36. Ultimately the court’s conclusion was grounded upon considerations of reason and fairness. “To base a division of property, which is not ordinarily subject to modification, upon the possibility of a future inheritance might often prove to be unfair in the light of subsequent events.” Id. at 1191. While some uncertainty about future events is unavoidable, such decisions “should not,” the court explained, “be premised upon predictions as to future income that depend wholly upon the generosity of others for realization.” Id.
¶ 37. Other courts have reached similar conclusions. See, e.g., In re Marriage of Beadle, 1998 MT 225, ¶ 43, 968 P.2d 698 (holding that husband’s beneficial interest in revocable trust was not properly included in marital estate and could not be considered as factor relating to future acquisition of capital assets in dividing marital estate); Johnston v. Johnston, 815 P.2d 1145, 1148 (Mont. 1991) (rejecting claim that wife’s “expected future inheritance” under her father’s will could be considered under statutory provision for “future acquisition of capital assets and income” since her interest was “highly speculative and thus, inappropriate” for consideration); In re Goodlander, 20 A.3d 199, 205, 210 (N.H. 2011) (holding that interest in revocable trust was “mere expectancy” that could not be included within marital estate or considered as an asset “outside of the marital property” in dividing marital estate); Petty v. Petty, 680 S.E.2d 894, 899 (N.C. Ct. App. 2009) (holding that party’s future inheritance under father’s will was “too speculative to be used as a distributional factor” in property division and its admission as evidence would render trial “overwhelmingly complicated” (citation omitted)); Powell v. Powell, 577 A.2d 576, 580 n.5 (Pa. Super. Ct. 1990) (rejecting husband’s assertion that court must consider money wife would inherit upon her mother’s death as an “opportunity ... for future acquisition *506of capital assets and income,” concluding that wife’s inheritance was “purely speculative”).8
¶ 38. The majority asserts that “because a property distribution cannot be modified where a change of circumstances occurs” it is all the more necessary to predict “future circumstances to bring about a fair result.” Ante, ¶ 23. The majority suggests that this somehow supports its holding, but the opposite is true: it is precisely the permanent nature of a property award that dictates against the consideration of such inherently speculative interests as revocable trusts, which turn entirely on circumstances beyond the party’s control and may never eventuate. Some uncertainty is unavoidable. Yet, as the Rubin court recognized, where an award is based “upon a possible inheritance, which may never materialize in any form or at any time remotely corresponding to the trial court’s assumptions, the risk of inequity is substantially greater.” 527 A.2d at 1191. This reasoning is sound. I would therefore affirm the trial court’s ruling excluding the revocable trusts from any consideration in the division of the marital estate.

 The majority’s response is to reject any statutory basis for excluding expectancies that are beyond the beneficiary’s control because the statutory language “on its face is only probabilistic.” Ante, ¶ 25. The argument proves too much, since taken to its logical conclusion the trial court would have no authority under the statute to exclude any alleged expectancy or opportunity so long as there was any likelihood of its fruition. On the contrary — and abstract “metaphysical” considerations aside — ante, ¶ 25, experience and ample authority support a principled distinction between opportunities over which a party has some — albeit not complete — control and others over which a party has little or none.

 The majority’s suggestion that we endorsed a contrary approach in Mizzi v. Mizzi, 2005 VT 120, 179 Vt. 555, 889 A.2d 753 (mem.), is questionable. The trial court there considered wife’s future inheritance in the property division but found that it was offset by other factors. We concluded that, “[g]iven the inherent uncertainty in the timing and amount of wife’s inheritance from her mother, it was not an abuse of discretion for the court to determine that neither party had a greater opportunity for future earnings.” Id. ¶ 9. This is hardly an endorsement of the consideration of future inheritance under § 751(b)(8), and indeed suggests, to the contrary, that it is error to consider such an inheritance — even from a parent — given its “inherent uncertainty.”