2025 NY Slip Op 51426(U)
N.Y. Sup. Ct., New York Cty.2025Background
- Married ~24 years; husband (former SL&K partner) and wife received a large windfall when SL&K was sold to Goldman Sachs in 2000, after which most marital assets were placed into irrevocable trusts (the GST and Family Trust) and related LLCs controlled by husband.
- Husband retained powers as grantor, investment advisor of LLCs, and the ability to remove/replace trustees; wife had limited, nominal roles (earlier trustee/Managing Director) and no independent counsel.
- Trust assets funded the couple’s lifestyle (multiple residences, ETC business interests, family expenses); husband continued active control and management of trust/LLC assets.
- After wife filed for divorce (2018), husband removed her from trust/LLC roles, caused decantings (including a mid‑trial transfer of GST assets into two Delaware trusts), made large unauthorized distributions and evicted wife from trust-owned homes without court approval.
- Trial found husband lacked credibility on control of trusts; court concluded the vast majority of marital assets ($181,469,321) were held in the trusts ($111,225,848) and includable in the marital estate for equitable distribution.
Issues
| Issue | Plaintiff's Argument (Wife) | Defendant's Argument (Husband) | Held |
|---|---|---|---|
| Whether trust assets may be included in the marital estate for equitable distribution | Trusts hold marital assets used to fund family life; wife expected lifetime benefit and lacked meaningful control — include trust value in distributive award | Trusts are irrevocable and intended to benefit children/descendants; assets outside marital estate and not subject to distribution | Court included trust assets in marital estate because husband retained control, trust assets funded marital lifestyle, and wife had equitable interest |
| Whether court may award distribution or otherwise affect irrevocable trusts | Wife sought inclusion of trust value in the distributive calculation (not dissolution) so she receives equitable share | Husband argued court cannot reach irrevocable trust assets and should distribute only non‑trust property | Court held it may consider and include trust asset value in the marital estate for equitable distribution though it would not dissolve trusts |
| Effect of husband’s post‑commencement transfers, distributions, and conduct | Husband’s unilateral decantings, distributions, evictions and failure to disclose constituted economic fault that supports an unequal remedy | Husband claimed authority over trust actions and no obligation to notify court; denied control assertions | Court found egregious economic fault and used DRL §236‑B(5)(d)(16) in fashioning an equitable remedy (50% award to wife) |
| Appropriate equitable distribution, maintenance, child support, counsel fees | Wife sought 65% of total marital estate, maintenance, child support, and full fees | Husband sought only non‑trust assets divided 50/50 and credits for distributions to wife; opposed fees | Court awarded wife 50% of total marital estate ($90,734,660 gross), credited $10,850,000 distributions, transferred specified non‑trust assets, set a $35,776,187 distributive payment (10 years), denied maintenance, ordered retroactive child support and awarded counsel/expert fees to wife |
Key Cases Cited
- Fields v. Fields, 15 N.Y.3d 158 (N.Y. 2010) (broad construction of "marital property" and recognition of marriage as economic partnership)
- DeJesus v. DeJesus, 90 N.Y.2d 643 (N.Y. 1997) (statute’s sweeping presumption that property acquired during marriage is marital)
- Oppenheim v. Oppenheim, 168 A.D.3d 1085 (2d Dep’t 2019) (irrevocable family trust held for children excluded from distributive award where parties relinquished control)
- Torkin v. Susac, 236 A.D.3d 1082 (2d Dep’t 2025) (trust containing marital property may be subject to equitable distribution)
- Yerushalmi v. Yerushalmi, 136 A.D.3d 812 (2d Dep’t 2016) (transfer of marital residence into irrevocable trust did not necessarily rebut marital‑property presumption when parties continued residence)
- Trafelet v. Trafelet, 150 A.D.3d 483 (1st Dep’t 2017) (importance of broad pretrial disclosures about trusts and parties’ participation)
- Reichers v. Reichers, 267 A.D.2d 445 (2d Dep’t 1999) (court may consider value of trust assets in distributive calculus even if trust is irrevocable)