What is Divorce at Altitude?
Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.
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Ryan Kalamaya (1s):
Welcome to Divorce at Altitude, a podcast on Colorado family law. I'm Ryan Kalamaya each week, along with my business partner and cohost Amy Gosha or an expert, we discuss a particular topic related divorce or co parenting in Colorado. In addition, we have created a short series of lessons that will take you through the legal process of divorce and answer your questions from simple to complex divorce. Isn't easy. The end of a marriage, especially when children are involved, brings a great deal of loss and change. We hope these practical tips and insights will help you On your journey to a new and better life.
Ryan Kalamaya (42s):
This how to episode is about Trust Interests in a Colorado Divorce. Now, if we go to Eric, Wolf's divorced story. And if you aren't familiar with his story, check out episode one of this podcast, you can also search my last name and Eric Wolf, and you'll be able to read his story. So let's add on to that story. And let's assume that Eric Wolf was born in New York and his parents created a trust of which he is a beneficiary in 1985, far before he ever met and married Melanie, what happens to Eric's interest in that divorce? Surely his parents or his, his family's estate planning attorney will say, well, it is Bulletproof, or it can't be touched in a collar divorce.
Ryan Kalamaya (1m 27s):
Indeed. That is often what clients frequently tell us when the issue of a Trust Interests comes up, but Colorado is fairly expansive in how it treats Trust Interests. And most people are very surprised when they learn, whether they're on the other side, such as in Melanie's circumstance or an Eric's place that the, his interest in that trust may be a property interest. So what are the things that we should consider? And what are the things that make a Trust Interests property? Well, I will give you the caveat that this issue is far more complex than I can really delve into in a, how to episode, if you want a touch or more information on this subject, check out episode 20 with Kim Willoughby, where we have a long form interview with her on Trust Interests in a Colorado Divorce, simply put there's a big difference between revocable trusts and irrevocable trusts.
Ryan Kalamaya (2m 22s):
If Eric's parents made a revocable trust and they're still alive, then that interest under Colorado law is not a property interest for Eric. The simple reason is that they, his parents can always change those documents and Colorado law generally does not view revokable trust as property interests. Well, what about irrevocable trusts? Is it just that all irrevocable trust interests are property interests? Well, not exactly. It gets very complex and it often involves trust and estate planning experts in Colorado. It also involves in times when there's a potential property interest financial experts. And that is because there's going to be a difference between separate property in marital property.
Ryan Kalamaya (3m 7s):
So really the things that we can consider an Erik circumstance, well, one of the big tests is whether or not Eric is the beneficiary of what's called a discretionary trust. And that is that if his parents are the trustees and or some other person is named as a trustee, the trustee, if it's given the role of distributing income or the Corpus of the trust based on discretionary items, such as for the health, safety, maintenance, or education of Eric that could be seen by the court as significantly different than a provision that says that Eric gets $5 million when he turns 30 years old.
Ryan Kalamaya (3m 49s):
And the issue is that, does Eric have the ability to require the trustee to distribute money to him? If not, and it's discretionary then generally in Colorado laws says that that's not a property interest. And again, if you have any sort of Trust Interests involved in your divorce, you should certainly seek out legal representation because these issues are really complex. They also involve oftentimes hundreds, if not millions of dollars, there are several key cases in Colorado in remarriage of Jones. There's also NRA marriage of balancing. There's a whole host of different Colorado cases interpreting various trust provisions and whether or not they are or not property interests in The Colorado divorce.
Ryan Kalamaya (4m 31s):
There are other related topics or terms involved in these kinds of cases. And that might be whether or not Eric has the ability to appoint the trustee over his Trust Interests. He may himself be a co-trustee or the trustee for his own trust. And that could matter. Colorado law is unclear when it comes to whether or not Eric has a property interest when he can or cannot just fire or appoint the trustee under what's called a general power of appointment. As I referenced earlier, even when you're getting into Trust, Interests, being property, you then have to get into the difference between separate and marital property.
Ryan Kalamaya (5m 13s):
So going back to Eric's example, we would look at when Eric was married to Melanie and what the property interest in that trust was worth at that time versus what it is today. And as I said earlier, that often involves a financial expert to get into the various interests that Eric could or could not inherit. Other related topics are going to be whether there's income from the trust. And indeed, if there is not a property interest in a trust, if there is still nevertheless income that is distributed to Eric, that could be considered income for child support or maintenance purposes. Now, the final thing I'll wrap up with is that even if a Trust Interests is not, It may not necessarily need to be ignored by the court.
Ryan Kalamaya (6m 1s):
And that's because the court may consider a Trust Interests, even if it's not property to be considered an economic circumstance. So that could come into play in whether or not the marital property that is at issue between Eric and Melanie is divided equally or some sort of disproportionate allocation because of the trust that Eric is the beneficiary of, or it could also come into play in terms of the maintenance and child support awarded to Melanie. As I said earlier, if there is a trust involved, you need to seek legal counsel because these issues are extremely complex, but hopefully that gives you an overview of how Trust Interests are generally dealt with in a Colorado divorce.
Ryan Kalamaya (6m 46s):
Thanks for listening or watching this short lesson on the Divorce at Altitude podcast. If you found this helpful, please leave a review or share with a friend. It does help for others that are going through or thinking about a divorce in Colorado. If you want to find out more information, please visit Kalamaya dot law or email@example.com. That's K a L a M a Y a.law. Remember, this is educational information. It's not intended to be legal advice. Please consult with an attorney about particulars of your case. We're happy to answer questions. Feel free to give us a call at nine seven three one five two three six five.