In our October, 2015 newsletter Attorney Baler reported on a Massachusetts Appeals Court case that held that a husband’s interest in a trust created by his father was a marital asset subject to division in his divorce (Pfannenstiehl v. Pfannenstiehl).
That Appeals Court decision was very disturbing to estate planning attorneys because prior to that holding, we could rely on hundreds of years of law holding that assets in a so-called spendthrift trust created by someone other than the beneficiary and managed by an independent trustee were protected from a beneficiary’s creditors.
The lower court’s decision was appealed and on August 4, 2016, the Supreme Judicial Court issued its unanimous decision reversing the Appeals Court holding. This is very good news for parents who have created trusts as part of their estate plan for the purpose of protecting their child’s inheritance from creditors including a divorcing spouse. If you are concerned about protecting your child’s inheritance, call Samuel, Sayward & Baler LLC or another experienced estate planning firm and schedule an appointment to meet learn how you can best protect your hard-earned assets from your children’s creditors.