The Appeals Court of Massachusetts holds that gifts to a wife from her mother are subject to equitable division in a divorce because the couple relied on the gifts to support their lifestyle and inform their financial planning decisions. In Jones v. Jones (Mass. App. Ct. No. No. 21-P-655, Sep 6, 2023).
Juliana Jones appealed a divorce judgment. She argued that the lower court erred in including three assets in the marital estate that were gifts from her mother: a trust to which she was the beneficiary, real property in Michigan, and a certificate of deposit.
While these were gifts from her mother, she shared them with her husband, and there is no evidence she intended to keep them separate from the marriage. In reliance upon the gifts from her mother and an anticipated inheritance, the couple did not save for retirement or their children’s college tuition. Maintaining the same lifestyle would require the distribution of gifts, even the ones they have not tapped into yet because they relied on them when making their financial plans. For equitable distribution, the estate includes all property to which a person holds title, even if it was a gift.
The wife attempted to argue that the trust was outside the marital estate because her interest in the trust was not sufficiently immediate. The appellate court found that she had a measurable interest in the trust. Although the trustee could delay distributions, the terms of the trust required the trustee to distribute the trust upon her mother’s death, and the wife retained the power to leave the trust to her beneficiaries upon her death. She also has an enforceable right to receive the contents of the trust.
Mrs. Jones also argued that the lower court erred by not accounting for the tax consequences of making payments to her former spouse and fluctuations in the market. However, she needed to provide more information in support of her argument and proposed changes for the court to entertain them.
The appellate court affirms the lower court’s order, finding that the gifts are subject to distribution.