Marriage of Rosenblum, In re, 78-477
| Decision Date | 16 August 1979 |
| Docket Number | No. 78-477,78-477 |
| Citation | 602 P.2d 892,43 Colo.App. 144 |
| Parties | In re the MARRIAGE OF Gordon S. ROSENBLUM, Appellant, and Sandra Z. Rosenblum, Appellee. . III |
| Court | Colorado Court of Appeals |
Thomas C. Seawell, Denver, for appellant.
Mason, Reuler & Peek, P. C., Maurice Reuler, Rosanne M. Hall, Denver, for appellee.
In this dissolution of marriage action, the husband appeals the permanent orders. We reverse.
The parties were married in 1954. They have two children, both boys, born in 1958 and 1960. Decree of dissolution and permanent orders were entered in December 1977.
In 1963, an irrevocable trust was created by the husband's mother as a gift to the beneficiaries, who were and are her son (the husband) and such of his issue as may be living at the time of each distribution. It was funded with $200,000 worth of stock. The husband and his sister were and remain the co-trustees, serving without pay. The trustees are authorized in their absolute discretion to distribute "all, none or any part" of the net income and principal to any of the beneficiaries, to make unequal distributions, or to withhold all income from "one or more or all." However, so long as the husband is a trustee, income or principal may not be distributed to him in excess of that necessary for his "health, education, support or maintenance." The trust instrument further provides that "no beneficiary shall have any right or power to enforce the payment of principal or income to himself or any other person." On the husband's death, the trust assets are to be divided into separate trust, one for each child living and one collectively for the issue of a deceased child, and in no event do these assets go to the husband's estate.
The trial court found that the value of the trust assets at the time of the hearing was approximately $3,500,000. The evidence before the trial court indicated, and the court found, that the husband had used the assets of this trust on occasions as if he were the sole owner thereof. There was evidence that the husband handled all transactions of the trust and that the co-trustee acceded to his decisions. The husband had borrowed money from the trust, sometimes without interest, and these loans were often made without the formality of promissory notes. The sums borrowed were used for his living expenses and business enterprises. Nevertheless, the court determined that this behavior did not have the effect of setting aside the trust and causing its assets to be his sole property. Instead, it held that "(t)his is a duly constituted trust that fulfills all the requirements of a valid trust, and it should stand as an entity in and of itself."
The court found on supporting evidence that, other than the trust, the parties had marital assets totaling $423,843 and liabilities of $349,220 for the husband and $36,650 for the wife plus substantial amounts owed for attorney fees. The husband's gross income for the current year was in excess of $80,000, exclusive of any distributions from the trust.
The court ordered joint custody of the boys, and directed the husband to pay their school expenses and $200 per month per child to the wife when they were with her. The wife was given maintenance of $2,000 per month for 14 months, and then $1,500, $1,000, and $500 per month for each succeeding 12 month period, after which maintenance was to terminate.
In dividing the property and liabilities, the court awarded the wife $50,000 in cash to be paid by the husband in 1978, plus $68,300 in other assets, and ordered the husband to pay her then debts and $28,000 on her attorney fees. The court then held that even though the trust was not marital property, the husband's interest in the total increase in the value of the trust assets was marital property pursuant to § 14-10-113(4), C.R.S.1973. Finding that the increase in the value was in excess of $3,000,000, that there were three present beneficiaries of the trust, and that the wife was entitled at most to one-half of the husband's share of the increase, the trial court arrived at a figure of $500,000 as the wife's interest in the increase. It then directed the husband to pay this amount to her in annual $100,000 installments commencing in January 1979. Although the court indicated that it was considering this increase "in awarding other non-trust assets to the (wife), without actually invading the assets that brought about the increase," the effect of the order was to require an invasion of the trust assets for the benefit of the non-beneficiary wife.
The husband contends that the trial court erred in considering his rights in the trust assets as property and the appreciation in value as marital...
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