Juliet C Roberts v. John A Roberts, Jr.
219 N.E.3d 767
Ind. Ct. App.2023Background:
- Wife and Husband married in 1962. Wife is a beneficiary of a trust (the Trust) created by her mother (settlor) in 1967 and restated in 1981.
- The Trust requires the trustee to pay each daughter "all of the net income" at least quarterly and permits a beneficiary to direct distributions of principal except for "undivided interests in assets" (e.g., settlor’s farm) if the Trustee and Adviser believe a distribution would substantially diminish remaining value.
- The Trust owns a 50% undivided interest in three farms (over 1,400 acres), ~20 oil wells, and two real estate partnerships. Wife has received substantial, regular distributions (accounting showed ~$130,000 in a recent multi-month period).
- Husband served as trustee and faced trust litigation by another beneficiary; he was later removed and a new trustee appointed. Wife filed for dissolution and moved for summary judgment requesting a ruling that her Trust interest is not marital property.
- Husband opposed, arguing Wife receives ongoing distributions that are divisible and that Trust provisions permit distributions of principal under some circumstances. The trial court denied summary judgment, finding genuine issues of material fact about the Trust language; the Court of Appeals affirmed.
Issues:
| Issue | Plaintiff's Argument (Wife) | Defendant's Argument (Husband) | Held |
|---|---|---|---|
| Whether Wife's interest in the Trust is marital property subject to division | Wife: Trust principal is indivisible; she has no present right to withdraw principal and income is too remote to be a divisible marital asset | Husband: Wife receives current mandatory income and can obtain distributions under Trust terms; interest is not too remote | Court: Denied summary judgment; Wife's present income and fixed right to income make the interest includable in the marital pot (genuine factual issues remain) |
| Whether the Trust is a spendthrift trust that excludes Wife's interest from division | Wife: Spendthrift clause shields her interest from creditors and alienation, making it non-divisible | Husband: Trust permits beneficiary-directed principal distributions (subject to exception), so spendthrift protection is not absolute | Court: Spendthrift status not established as a matter of law; Trust language allowing beneficiary-directed principal prevents summary judgment for Wife |
| Whether future Trust income is too speculative/remote to value or divide | Wife: Future income (royalties/rents) is uncertain and speculative and thus should not be treated as divisible property | Husband: Payments have occurred and increased recently; future distributions are not purely speculative | Court: Because Wife receives ongoing mandatory income and has a presently fixed right to future enjoyment, interest is not too remote or speculative to be considered in division |
| Whether summary judgment was appropriate | Wife: No genuine issue of material fact; Trust interest should be excluded as a matter of law | Husband: Genuine issues exist about Trust language, distributions, and valuation | Court: Summary judgment improper; factual determination required at final hearing |
Key Cases Cited
- Fulp v. Gilliland, 998 N.E.2d 204 (Ind. 2013) (trust interpretation is a question of law and settlor intent controls)
- Bingley v. Bingley, 935 N.E.2d 152 (Ind. 2010) ("all assets" in marital-property statute is broadly inclusive)
- Helm v. Helm, 873 N.E.2d 83 (Ind. Ct. App. 2007) (vested rights to future payments may constitute marital property)
- Vadas v. Vadas, 762 N.E.2d 1234 (Ind. 2002) (property with vested interest at dissolution may be divisible)
- Harrison v. Harrison, 88 N.E.3d 232 (Ind. Ct. App. 2017) (trust interests subject to complete defeasance may be too remote to divide)
- Loeb v. Loeb, 301 N.E.2d 349 (Ind. 1973) (no pecuniary value for a trust interest subject to complete defeasance)
- United States v. Grimm, 865 F. Supp. 1303 (N.D. Ind. 1994) (defines elements of a spendthrift trust)
- Kendrick v. Kendrick, 44 N.E.3d 721 (Ind. Ct. App. 2015) ("one pot" theory: court must consider all assets when dividing marital estate)