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On Behalf of | Jun 29, 2016 | Family Law |

Curiously, in Dahl v. Dahl, 2015 WL 5098249, although the Utah Supreme Court emphasized the strong public policy in Utah to divide marital estates equitably such that a trust cannot hide assets of the marriage, the Court determined that Ms. Dahl could only withdraw from the trust those assets she contributed to the trust. Id. ¶ 34. Thus, Dr. Dahl was allowed to contribute property to the irrevocable trust that remained his separate property. True, the trial court could give all of Ms. Dahl’s contributions to her to offset whatever property remained in the trust, but this ruling leaves open the door for a creative spouse to plan a divorce by placing assets in an irrevocable trust and keeping them outside the marital estate-effectively picking and choosing what assets he or she wants and possibly even obtaining the lion’s share of the assets if the trust is properly done. Respectfully, the Utah Supreme Court ignores the reality that any asset created during the marriage is created through the labor and effort of both parties even though one party alone may physically create the asset or the asset is titled in only one party’s name. Dr. Dahl was able to work and create property because Ms. Dahl stayed home and reared their two children. Assets that he created through marital labor should be considered marital assets and even though he may separately contribute them to the trust, the contribution should be considered a marital contribution making both parties settlors to the trust with both having full ownership and rights as settlors. The case is good because it states Utah’s public policy with regard to marital division and even overrides express choice of law language in the irrevocable trust drafted under Nevada law, and it applies Utah law making the trust revocable. But the determination that effectively one spouse can secret assets into an irrevocable trust following a lengthy marriage is fodder for mischief. Hopefully, the Court corrects this before it makes the opinion final and subject to formal publication.

Lewis P. Reece

Snow Jensen & Reece P.C.

St. George, Utah