Separate but Equal: Proposal for Harmonizing the Rules for Marital Property Characterization of Beneficial Interests in and Distributions from Trusts with Those Applicable to Similar Types of Property

Date

2012

Journal Title

Journal ISSN

Volume Title

Publisher

Abstract

Describes the different approaches circuit courts have used and the different rules they have developed for characterizing beneficial interests in and distributions from trusts. Proposes the adoption of standard rules that will harmonize all approaches. Section II describes the marital property rules for characterizing income-producing property and the income produced by such property and for characterizing the ownership interests in and distributions from separate entities other than trusts, such as corporations and partnerships. Section III discusses the issue of whether a trust is or should be treated for marital property characterization purposes as a legal entity separate from the owners of the beneficial interests in the trust. Section IV describes the different approaches utilized by the circuit courts, and the different rules they have developed as a result, to characterize beneficial interests in and distributions from trusts. Section V proposes standard rules that will (1) harmonize these various approaches and rules currently used and (2) allow the rules for characterizing beneficial interests in and distributions from trusts to exist in logical parity with the rules for characterizing similar types of property, regardless of whether a trust is treated as a separate legal entity or not.

Description

Keywords

Trusts, Marital property, Characterization rules, Distributions, Legal entity, Circuit courts, Interests, Income-producing property

Citation

James L. Musselman, Separate but Equal: Proposal for Harmonizing the Rules for Marital Property Characterization of Beneficial Interests in and Distributions from Trusts with Those Applicable to Similar Types of Property, 5 Est. Plan. & Cmty. Prop. L. J. 55 (2012).