In re Marriage of Dale, No. 02CA1523.

• Decision Date: 20 November 2003
• Docket Number: No. 02CA1523.
• Citation: 87 P.3d 219
• Parties: In re the MARRIAGE OF Tondeleyo L. DALE, Appellant, and Christopher T. Major, Appellee.
• Court: Colorado Court of Appeals

87 P.3d 219

In re the MARRIAGE OF Tondeleyo L. DALE, Appellant, and

Christopher T. Major, Appellee.

No. 02CA1523.

Colorado Court of Appeals, Div. I.

November 20, 2003.

As Modified February 5, 2004.

Rehearing Denied February 5, 2004.

Maguire & Rabun, LLC, Bruce H. Rabun, Greenwood Village, Colorado, for Appellant.

Stevens, Littman, Biddison, Tharp & Weinberg, LLC, Craig Weinberg, Boulder, Colorado, for Appellee.

Opinion by Judge LOEB.

In this dissolution of marriage proceeding, Tondeleyo L. Dale (wife) appeals from the division of property set forth in the trial court's permanent orders. We affirm.

Wife married Christopher T. Major (husband) in 1997, and the decree dissolving their marriage was entered by the trial court in March 2002. The marriage was the second for both, no children were born to the parties, and both parties waived maintenance. Therefore, only property division issues are raised in this appeal.

In reviewing a trial court's division of property, we recognize that the trial court has great latitude to effect an equitable distribution based on the facts and circumstances of each case. Thus, on review, an appellate court must not disturb a trial court's decision regarding division of property unless there has been a clear abuse of discretion. In re Marriage of Balanson, 25 P.3d 28, 35 (Colo.2001).

I.

Wife asserts that the trial court exceeded its authority by addressing her interests in various family trusts because, under § 14-10-113(7)(b), C.R.S.2003, those interests could not be considered either as property or an economic circumstance for purposes of the property division. We conclude that the trial court properly addressed wife's vested interest in her grandfather's irrevocable trust, and we need not consider her interest in her parents' revocable trusts.

A.

Remainder interests in irrevocable trusts have been deemed property for purposes of the disposition of property in a dissolution action. Such interests may present only a right to future enjoyment and are subject to complete divestment or defeasance, but they are certain, fixed interests subject only to the condition of survivorship and may not be withheld by the trustee in his or her discretion. Thus, they are distinct from interests in a discretionary or revocable trust, which are viewed as mere expectancies. In re Marriage of Balanson, supra, 25 P.3d at 41.

A division of this court in In re Marriage of Gorman, 36 P.3d 211 (Colo.App.2001), also determined that a remainder interest in a revocable trust constituted property. The division reasoned that such an interest is vested subject to a condition subsequent. Common conditions triggering divestment include the death of the remainderman during the life of the present beneficiary, the exercise of a power to revoke, or the invasion and depletion of the corpus. The division recognized that if a condition subsequent does not occur, the remainderman's interest will remain vested, thereby establishing that it is a present property interest.

Following the Gorman decision, the General Assembly enacted § 14-10-113(7)(b), which provides:

For purposes of subsections (1) to (4) of this section only, "property" and "an asset of a spouse" shall not include any interest a party may have as an heir at law of a living person or any interest under any donative third party instrument which is amendable or revocable, including but not limited to third-party wills, revocable trusts, life insurance, and retirement benefit instruments, nor shall any such interests be considered as an economic circumstance or other factor.

(Emphasis supplied.)

B.

Wife argues that her interest in the irrevocable trust falls within the exception to property created under § 14-10-113(7)(b) through the phrase, "any interest a party may have as an heir at law of a living person." We do not agree with her interpretation.

The parties stipulated to the following facts related to the irrevocable trust. Wife's grandfather, who died in 1947, created the trust in his will. In 1950, the trust was funded with a distribution of $616,031 from the grandfather's estate. Upon the death of wife's grandmother in 1959, the trust received an addition of $527,572.37 from her estate. No further principal was added to the trust.

In 1953, wife's father, the named trust beneficiary, became eligible to receive a distribution of one-half of the original principal. He exercised that right in 1963, when he took a distribution of $308,015.50. Since that time, wife's father has taken no further distributions from principal, but income has been distributed to him on a quarterly basis in accordance with the terms of the trust.

Pursuant to the terms of the irrevocable trust, the Wife's father appointed fifty percent of the trust to wife's mother for her lifetime. The other fifty percent will be distributed to wife and her three siblings upon their father's death. The remainder will then be distributed similarly following the death of wife's mother.

At the time of the permanent orders hearing, wife's father was eighty-three years old. The trust was worth $4,683,434 at the date of the marriage and $6,647,781 on the date of the permanent orders hearing.

Wife maintains that she holds her remainder interest in the trust as an "heir at law" of her father. She relies upon case law that defines that term as a "lineal descendant" and notes that she has acquired her remainder trust interest as a result of being the child and, therefore, the lineal descendant of her father, the life estate beneficiary. She further argues that she was not born when her grandfather's trust was created and that she became a member of the remainder class upon her birth. Accordingly, she urges that the phrase encompasses the remainder interest of any child of a life estate beneficiary because a person in that class only possesses the interest as a result of being a lineal descendant of a living person. We are not persuaded.

In any statutory interpretation, our task is to determine and give effect to the intent of the General Assembly. Welby Gardens v. Adams County Bd. of Equalization, 71 P.3d 992, 995 (Colo.2003). To determine intent, a court should look first to the language employed in the statute. If the words used are plain and unambiguous, our task is accomplished by giving effect to the commonly accepted meaning of those words. Applehans v. Farmers Ins. Exch., 68 P.3d 594, 597 (Colo.App.2003).

When a statute is amended, an intent to change the law is generally presumed. People in Interest of A.H., 74 P.3d 494, 495 (Colo.App.2003).

Black's Law Dictionary 727(rev. 7th ed.1999) defines the term "heir" as follows: "a person who, under the laws of intestacy, is entitled to receive an intestate decedent's property, especially real property. Also termed `heir at law.'"

Webster's Third New International Dictionary 1050(rev. ed.1986) defines "heir at law" as: "an heir in whom by operation of the law of intestate succession the habitable estate and part or all of the movables of a decedent are vested."

These definitions reveal that the term "heir at law" pertains to any interest or resource a spouse may expect to inherit from his or her parent were the parent to die intestate. As a practical consequence of that language, the trial court may not consider any such prospective inheritance as either a property interest or as an economic circumstance. By including the phrase "heir at law," the statute thus treats intestate expectancies consistently with interests under a donative third-party instrument that can be revoked or changed. Here, in contrast, wife holds her remainder interest not as an heir at law under the laws of intestacy, but as a vested beneficiary of an irrevocable trust.

Howlett v. Greenberg, 34 Colo.App. 356, 530 P.2d 1285 (1974), relied on by wife, does not support her position. Under that case, heirs at law pursuant to the laws of intestacy are construed to mean lineal descendants of the decedent for purposes of determining who has a proprietary interest in a Colorado wrongful death judgment. See also, Whitenhill v. Kaiser Permanente, 940 P.2d 1129, 1131 (Colo.App.1997)

.

Because we have concluded that the plain language of the statute is clear, we need not consider other interpretive aids. Nevertheless, because of the extensive legislative discussion surrounding the passage of § 14-10-113(7)(b), we explore the legislative history and conclude that our plain language interpretation is consistent with the legislative intent. See Welby Gardens v. Adams County Bd. of Equalization, supra, 71 P.3d at 995

.

The legislative history shows that § 14-10-113(7)(b) was adopted to overturn the holding in In re Marriage of Gorman, supra, that a vested remainder interest in a revocable or modifiable trust is a property interest subject to division. Speakers on behalf of the bill specifically referenced the Gorman decision and explained that subsection (7)(b) was drafted as a noncompromise measure to accomplish a complete reversal of that holding. The speakers also clearly advised that the statutory change did not address the holding in In re Marriage of Balanson, supra, and was not intended to change the classification of remainder interests in irrevocable trusts as property subject to division. Particularly, one speaker commented that the "heir at law" phrase "applied to anything a parent might leave a child even without a will." Hearings on S.B. 02-160 before the Senate Judiciary Committee and the House Judiciary Committee, 63rd General Assembly, Second Regular Session (Jan. 9, 2002).

Thus, the legislative history confirms that the General Assembly relied upon the plain meaning of "heir at law." Additionally, it reveals that the statute applies only to remainder interests in trusts that are revocable or amendable, and not to remainder interests in irrevocable trusts. See In re Marriage of Davisson, 797 P.2d 809 (Colo.App.1990)

(determining legislative intent...