2005-808, I/M/O ELIZABETH A. CHAMBERLIN AND WILLIAM L. CHAMBERLIN

charitable institutions. Under the terms of the Trust, the only interest they personal tax benefits, generating income and funding donations to certain

During their marriage, they established the Trust for the purposes of gaining The record supports the following. The parties were married in 1987.

Trust, although marital property, was of negligible monetary value. We affirm. not marital property and that the settlors’ right to receive interest from the Chamberlin and Elizabeth Chamberlin Irrevocable Charitable Trust (Trust) was Family Division (Cardello, J.) determining that the corpus of the William recommended order of a Marital Master (Forrest, M.) approved by the Newport BRODERICK, C.J. The petitioner, Elizabeth A. Chamberlin, appeals a

the respondent. Loftus & Borgstrom, PC, of Lebanon (William R. Loftus on the brief), for

the brief), for the petitioner. to press. Errors may be reported by E-mail at the following address: Brennan Caron Lenehan & Iacopino, of Manchester (William J. Quinn on

page is: http://www.courts.state.nh.us/supreme. CHAMBERLIN IN THE MATTER OF ELIZABETH A. CHAMBERLIN AND WILLIAM L.

No. 2005-808 editorial errors in order that corrections may be made before the opinion goes Newport Family Division Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as in order to achieve an equitable division of the marital assets.” p. 2 respondent was “an additional lump sum [equalization] payment of $27,000.00

appeal followed. with percentages determined to be equitable in the final divorce decree. This deletion of the Trust corpus and to keep the overall division of assets in line

the balance awarded to the respondent. Among the assets awarded to the

respondent to retain the right to receive income generated from the Trust.

to correct for the change in the value of the total marital estate caused by the

approximately fifty-seven percent of the marital property awarded to her and overall property division was skewed in favor of the petitioner, with the sum of money necessary to increase the Trust corpus to $110,000. The

obligation to increase the Trust corpus to $110,000 and allowed the the . . . Final Decree.” As well, the trial court relieved the petitioner of her part of the respondent’s equitable share of the assets distributed pursuant to the petitioner’s lump sum equalization payment to the respondent by $8,000, exceeded $110,000 had negligible value. In addition, the trial court increased respondent’s right to receive distributions from the Trust once the corpus 2

of return, his interest in the Trust –

addition, the respondent was awarded the interest generated by the Trust and

irrevocable, and the [corpus] is not, therefore, an asset properly counted as

for the respondent, it is apparent that the trial court determined that the

$110,000, given his probable five-year life expectancy and a seven-percent rate

$90,827.23, treated as a marital asset, and awarded to the respondent. In sixty-six. In the final decree of divorce, the Trust corpus was valued at respondent, was seventy-four years old and in poor health. The petitioner was

The trial court granted the motion to reconsider, explaining that “[t]he Trust is

result in a split of fifty-seven percent for the petitioner and forty-three percent assets and the trial court’s ruling that its final distribution was intended to estate. He further argued that even if the Trust corpus were increased to Based upon the readily ascertainable values of all the other marital counted the corpus as a marital asset in its division of the parties’ marital asset” available to him, thus making it erroneous for the trial court to have

When the parties were divorced in 2005, William L. Chamberlin, the

it – was worth only $35,000 rather than the higher figure used by the court.

arguing that the “Trust [was] irrevocable and [its corpus was] not a spendable The respondent sought reconsideration of the final divorce decree,

divorce in 2003. At that time, the Trust corpus was valued at $85,596.84.

For reasons not relevant to this opinion, Elizabeth Chamberlin filed for

corpus if it exceeded $110,000. retained was the right to receive income distributions generated by the Trust is generally a pure question of law, subject to

other asset is or is not owned by either or both parties, and that determination

discretion or a weighing of the equities. Obviously, judicial discretion has a a legal analysis of the characteristics of the asset in question, not an exercise of the Matter of Valence and Valence, 147 N.H. 66 p. 3 3, 666 (2002), under which the does not belong to the husband or the wife, individually or collectively, calls for We now adopt, as herein modified, the two-step analysis outlined in In

cases have employed a different standard of review, they are overruled. RSA 458:16-a, I (2004) is somewhat unclear. de novo review. To the extent our

proper role for the exercise of discretion. A pension, an annuity, a trust, or any asset is marital property, as that term is defined in RSA 458:16-a, I, we see no RSA 458:16-a, II, but as to whether or not in the first instance a particular

practice as marital property”),

of law. Whether, at the time a divorce petition is filed, a given asset does or property distribution when fashioning a final divorce decree. approach is to treat a trial court’s RSA 458:16-a, I, determination as a matter those same determinations as a matter of law, as in Preston – the better determination that a particular asset is or is not marital property as defined by determinations as a matter of trial court discretion, as in Harvey, and treating disagree. Of the two approaches we have followed – treating RSA 458:16-a, I,

distribution”). annuity [owned by the husband] was marital property subject to equitable N.H. 48, 49 (2001) (“the trial court [did not] erroneously conclude that [an] discretion.

[husband’s] interest in certain real estate parcels, timeshares and [a] dental court did not unsustainably exercise its discretion by classifying the established that the trial court is afforded broad discretion in determining 4 p. 3 38 (“[g]iven the broad [statutory] definition of ‘marital property’ . . . the trial

II (2004). However, the standard we apply when we review a trial court’s and (2) the value of the respondent’s interest in the Trust was negligible. We “equitable division of property between the parties” pursuant to RSA 458:16-a, value for both parties in the form of tax advantages and income generation; The foregoing standard of review applies when we examine a trial court’s marital estate notwithstanding that it was funded with marital assets and had

Id.

court’s decision on property distribution absent an unsustainable exercise of Harvey & Harvey, 15 p. 3 3 N.H. 425, 430 (2006). We will not overturn a trial

We begin by discussing the applicable standard of review. It is well

discretion by determining that: (1) the Trust corpus was not a part of the The petitioner argues that the trial court unsustainably exercised its p. 4 Trust had little or no value. We answer both questions in the negative.

excluding the Trust corpus from the marital estate.

removed them from the statutory definition of marital property.

irrevocable trust. exercised its discretion by determining that the respondent’s interest in the

parties at the time of their divorce, the trial court did not commit legal error by Because the Trust corpus was not an asset belonging to either or both of the property is held in the name of either or both parties.” RSA 458:16-a, I. belonging to either or both of them once those assets were placed in the Trust

property). Thus, the parties’ act of placing liquid assets in an irrevocable trust husband’s trust terminated, trust corpus distributed to husband was marital to invade the Trust corpus. That is, indeed, one of the defining features of an determination, under unsustainable exercise of discretion standard, that once determining that the Trust corpus was not a marital asset or unsustainably Abrams v. Abrams, 131 N.H. 522, 524-25 (1989) (affirming trial court determines whether the trust and the income from it are [marital] property”); cf. interest in the trust rather than the source of funding for the trust that 230, 232 (Colo. Ct. App. 1999) (“it is the extent of the beneficiary’s right to or distribution of marital assets.”). See In re Marriage of Pooley, 996 P.2d

assets, real or personal, belonging to either or both parties, whether title to the that the assets the parties used to fund the Trust ceased being property Trusts and Trustees § 234, at 56-57 (2d ed. rev. 1992). It necessarily follows and Gifts § 31.02[2], at 399 (4th ed. 2003); G. Bogert & G. Bogert, The Law of

The petitioner concedes that neither she nor the respondent has the right before us; namely, whether the trial court committed an error of law by

sound discretion in establishing an appropriate valuation date for the equitable

Marital “[p]roperty shall include all tangible and intangible property and exercise of discretion);

the sound discretion of the trial court. normally a question of law, determining the value of any given asset is left to whether or not a particular asset is marital property under the statute is

Having established our standard of review, we now turn to the questions court determinations under RSA 458:16-a, I, are reviewed exercises its discretion to make an equitable distribution of those assets. Trial

771 (2002) (“We reiterate the rule that trial courts are free to exercise their

521 (1999) (reviewing trial court’s valuation of marital assets for unsustainable

unsustainable exercise of discretion. Finally, we note that while determining equitable divisions of property pursuant to RSA 458:16-a, II are reviewed for an

under RSA 458:16-a, I, and thus subject to equitable distribution, and then trial court first determines, as a matter of law, what assets are marital property must be taken into account in the division of marital property.

p. 5 distribution in a divorce and that such an entitlement has a present value that

draw. Decisions from other jurisdictions support our holding.

established to benefit him and his mother was marital property.

We hold that such an interest does constitute marital property subject to 5 an irrevocable charitable trust is a question of first impression in this state. definition of marital property includes a settlor’s right to receive interest from the Trust and awarded the respondent the right to distributions of interest,

asset, interchangeable with other assets upon which the parties freely may

death, to receive income from and invade the principal of an irrevocable trust

interest so long as the Trust corpus exceeded $110,000. Whether the statutory In the case before us, the trial court recognized the parties’ interests in the trust.” irrevocable trust, it would be incongruous to count such a trust as a marital be persuasive. neither the settlor nor the settlor’s creditors may invade the corpus of an Chilkott, 607 A.2d 883, 884 (Vt. 1992). We find the reasoning of these cases to can be distributed to or for the settlor’s benefit.” RSA 564-B:5-505(a)(2). If Chilkott v.

Vermont Supreme Court has held that a husband’s right, upon his mother’s trust corpus and a limited right to withdraw the principal. Id. Similarly, the Fox, the wife’s interest included the right to receive interest generated from the established by her husband. Fox v. Fox, 592 N.W.2d 541, 546 (N.D. 1999). In failing to place any value on a wife’s interest in an irrevocable insurance trust Dakota Supreme Court has held that a trial court committed clear error by remainder interest, but they did retain the right to receive distributions of

Findlen, 695 A.2d at 1220. Following that reasoning, the North

property interest incident to a trust. interest subject to division is not the [corpus] itself but the parties[’] interest in In Findlen, the Maine Supreme Judicial Court explained that “the marital

creditor or assignee of the settlor may reach [only] the maximum amount that

wife was not marital property);

340 (1994). As the trust at issue is a charitable one, the parties have no

not the end of the matter because ownership of the corpus is not the only However, determining that the Trust corpus was not marital property is

B (Supp. 2006), which provides that “[w]ith respect to an irrevocable trust, a who was not trustee or beneficiary was not marital property). App. 2005) (holding that insurance policy placed in irrevocable trust by wife

placed in irrevocable trust by husband’s mother for the benefit of husband and Findlen v. Findlen, 695 A.2d 1216, 1220 (Me. 1997) (holding that residence

We find support for our holding in the Uniform Trust Code, RSA ch. 564-

concluding and consequently affirm its ruling on that issue. 458:16-a, I. Accordingly, we hold that the trial court did not err in so interest in the Trust was negligible. p. 6 unsustainably exercised its discretion by determining that the respondent’s evidence supporting an alternative value, we cannot say that the trial court

respondent’s age and poor health, and the petitioner’s failure to present any

property. Given the terms of the Trust, the size of the Trust corpus, the

context of the task before it, which was to equitably divide the parties’ marital court’s determination that the respondent’s interest had little or no value in the the respondent’s interest – if not more so – providing further support for the

to conclude that the petitioner’s reversion interest was at least as valuable as

younger than the respondent, it would have been reasonable for the trial court still $20,000 short of paying interest, and because the petitioner is eight years revert to the petitioner upon the respondent’s death. Because the Trust was

reasonable for the trial court to deduce that the right to receive interest would

Trust that she was able to assign to the respondent, it would have been the extent the petitioner had a right to receive distributions of interest from the respondent was at least seventy-five years old and in poor health. Moreover, to

respondent would be able to draw interest income from the Trust, and the

DALIANIS, DUGGAN, GALWAY and HICKS, JJ., concurred.

value, the Trust corpus needed to grow by approximately $20,000 before the court determined that the respondent’s interest in the Trust was of little or no the value of that interest, to the respondent, was negligible. When the trial

distribution of marital assets, the court necessarily must have determined that once the Trust corpus reached $110,000. In doing so, given the overall