Estates and Trusts

In Dissolution of Marriage Action, Court Orders Both an Allocated and Unallocated Alimony Award

In a recent dissolution of marriage action, the Court ordered a husband to pay to his wife unallocated alimony and child support for a period of two and one-half years, followed by allocated alimony and child support for a period of six years.  The parties originally met in 1998 and were married for 13 years.  They were the parents of two children, both of whom were minors at the time of trial.  The parties blamed each other for the breakdown of the marriage, with the wife accusing the husband of engaging in verbally and physically abusive behavior, and the husband accusing the wife of being unfaithful.  Despite the parties’ accusations, the Court ultimately found that neither was at greater fault for the marital breakdown.

At the time of trial, the wife was forty-one years of age.  She had suffered from asthma for approximately three years and also had heart spasms, though neither condition prevented her from working.  During the marriage, she earned between $30,000 and $40,000 per year until the birth of the parties’ second child.  According to the wife, at that point, the husband asked her to cut back so she could care for the children.  Based on her earnings history, the Court found the wife had an earning capacity of $40,000 per year.

The husband was fifty-two years of age and generally in good health.  At one point during the marriage he earned approximately $100,000 per year as a car salesman.  However, at the time of trial he was working as a general manager at a local dealership earning $211,120 gross annually, or $4,060 gross per week.

Based on its findings, the Court awarded the wife unallocated alimony and child support in the amount of $1,000 per week for a period of two and one-half years, followed by periodic alimony in the amount of $250 per week for a period of six years, and child support in the amount of $500 per week until the parties’ children graduate from high school, or attain the age of 19, whichever occurs first.  The Court designated both the unallocated award and the allocated periodic alimony as non-modifiable as to duration, and also allowed the wife a safe harbor, permitting her to earn up to $40,000 per year before the husband could seek a downward modification to his alimony obligation.

By: Michael D. DeMeola, Esq.

Should you have any questions regarding matrimonial matters, please do not hesitate to contact Joseph C. Maya, Esq.  He can be reached by telephone in the firm’s Westport office at (203) 221-3100 or by e-mail at JMaya@mayalaw.com.
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Our family law firm in Westport Connecticut serves clients with divorce, matrimonial, and family law issues from all over the state including the towns of: Bethel, Bridgeport, Brookfield, Danbury, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, New Fairfield, Newton, Norwalk, Redding, Ridgefield, Shelton, Sherman, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton. We have the best divorce attorneys and family attorneys in CT on staff that can help with your Connecticut divorce or New York divorce today.

If you have any questions or would like to speak to a divorce law attorney about a divorce or familial matter, please don’t hesitate to call our office at (203) 221-3100. We offer free divorce consultation as well as free consultation on all other familial matters. Divorce in CT and divorce in NYC is difficult, but education is power. Call our family law office in CT today.

Undistributed Income of a Spendthrift Trust is Excluded from Alimony Determinations

In a case before the Appellate Court of Connecticut, an ex-wife appealed a trial court ruling that reduced her ex-husband’s alimony obligations on the basis of her status as the beneficiary of a supplementary spendthrift trust.  The appellate court reversed the trial court ruling and remanded the case for further proceedings.

In April 2002, the couple’s forty-year marriage was dissolved.  The judgment of dissolution contained provisions that required the ex-husband to pay $5,000 per month to his ex-wife as alimony, and that permitted the court to take a second look at the alimony obligation on the ex-husband’s 65th birthday or upon the death of his father, which ever occurred first.  In 2006, after both events occurred, the ex-husband filed a motion to modify his alimony obligation.  In its memorandum of decision, the court found that the ex-wife was an income beneficiary of a trust in which the settlor’s primary intent was to provide generously for her care and maintenance, commonly known as a “spendthrift trust.”  The court also found that this trust earned more than enough income to provide for the ex-wife’s care and maintenance without any invasion of the principal. On the basis of its findings regarding the ex-wife’s status as a trust beneficiary, the court granted the ex-husband’s motion and modified the ex-wife’s alimony to $1 per year, retroactive to the date the motion was served.  The ex-wife appealed the trial court decision.

According to Connecticut case law, a court’s role in the construction of a trust instrument is to determine the meaning of what the grantor stated in the trust instrument and not to speculate upon what the grantor intended to state in the instrument. Connecticut Bank & Trust Co. v. Lyman, 148 Conn. 273, 278-79, 170 A.2d 130 (1961).  Expressed intent must control the court’s interpretation of the instrument.  Therefore, the plain language of the trust instrument itself, rather than extrinsic evidence of actual intent, is determinative of the grantors’ intent. Cooley v. Cooley, 32 Conn.App. 152, 159, cert. denied, 228 Conn. 901 (1993) (citing Heffernan v. Freedman, 177 Conn. 476, 481, 418 A.2d 895 (1979).  The provisions of the trust of which the ex-wife was a beneficiary classify it as a supplementary spendthrift trust:  “[T]he trustees shall pay to or for the benefit of [the ex-wife]… so much of the net income thereof as the Trustees, in their sole discretion, deem advisable for the comfortable maintenance of said child.”

In the case of a spendthrift trust which provided the beneficiary with only such sums as the trustee deems necessary for the beneficiary’s support, no title passes in the income passes to the beneficiary until the beneficiary receives a distribution from the trust.  Bridgeport v. Reilly, 133 Conn. 31, 35–36, 47 A.2d 865 (1946), quoting Reilly v. State, 119 Conn. 508, 512, 177 A. 528 (1935).  Therefore, the appellate court determined that, until the ex-wife receives a distribution from her supplementary spendthrift trust, the undistributed trust income cannot be considered for the purposes of determining an alimony award.  Furthermore, a court can only control the exercise of discretion by the trustee of a spendthrift trust when an abuse of discretion has occurred. Zeoli v. Commissioner of Social Services, 179 Conn. 83, 89, 425 A.2d 553 (1979).  In the instant case, there has been no claim that the trustees have abused their discretion in not making distributions to the ex-wife.

In examining the provisions of the ex-wife’s spendthrift trust, the appellate court concluded that the trial court improperly interpreted the provisions of the trust agreement when, in effect, it assumed that the trustees were obligated to distribute income to the ex-wife, in her capacity as trust beneficiary.  The court could not compel the trustees to make income payments and consider the unreceived income in modifying the alimony order.  Furthermore, it was an abuse of discretion for the court to consider the undistributed trust assets as income to the ex-wife when the court considered and applied the statutory factors for the determination of alimony.  Conn. Gen. Stat. §  46b-82. Therefore, the trial court incorrectly applied the law when it ordered the ex-wife’s alimony to be reduced because it could not reduce alimony based on a finding that the supplementary spendthrift trust earned enough to provide for the ex-wife’s support.

Because the appellate court agreed that the trial court abused its discretion by improperly crafting an order that tacitly compelled the trustees to make distributions of the trust to the ex-wife, the appellate court reversed the trial court ruling and remanded the case for further proceedings in accordance with the law.

By: Attorney Russell Sweeting

Should you have any questions relating to trusts or other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Joseph Maya, at JMaya@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Taylor v. Taylor, 978 A.2d 538 (Conn. App. Ct. 2009)
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Our family law firm in Westport Connecticut serves clients with divorce, matrimonial, and family law issues from all over the state including the towns of: Bethel, Bridgeport, Brookfield, Danbury, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, New Fairfield, Newton, Norwalk, Redding, Ridgefield, Shelton, Sherman, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton. We have the best divorce attorneys and family attorneys in CT on staff that can help with your Connecticut divorce or New York divorce today.

If you have any questions or would like to speak to a divorce law attorney about a divorce or familial matter, please don’t hesitate to call our office at (203) 221-3100. We offer free divorce consultation as well as free consultation on all other familial matters. Divorce in CT and divorce in NYC is difficult, but education is power. Call our family law office in CT today.

Accepting Funds from a Charitable Trust may Create a Contract that Cannot be Unilaterally Modified

In a case before the Superior Court of Connecticut, the Attorney General of the State of Connecticut brought a declaratory judgment action to represent the public interest in protecting gifts intended for charitable purposes, pursuant to Connecticut General Statute § 3-125.   The action posed four specific questions to the court regarding a charitable trust that was intended to honor a respected synagogue member and provide funds for capital improvements to the synagogue to which he belonged.

In 2002, a respected member of the synagogue passed away, and was survived by his wife and son.  The following year, a charitable foundation in New York City gave the synagogue he attended a gift of $40,000 which was contingent upon the synagogue’s agreement to name its sanctuary after the deceased.  The gift and additional donations of over $100,000 were placed in a memorial fund, which was controlled by the widow and her son.  After receiving the gift, the synagogue erected a plaque over the entrance to the sanctuary declaring that it was named in honor of the deceased.  At the synagogue’s next board of directors meeting, the widow offered, on behalf of the memorial fund, to give the money in the fund to the synagogue with the restriction that it be used only for capital improvements and not ordinary expenses.  The widow and the son would act as the trustees of the fund and disburse monies for capital improvements at their absolute discretion.  The board of directors approved the arrangement.

A dispute later arose between the widow and her son, and the board of directors.  The widow and her son were dissatisfied because the memorial plaque was covered on several occasions so that it was not visible to people in the synagogue.  For example, during the 110th anniversary celebration of the synagogue, a sign announcing the name of the synagogue was placed over the memorial plaque.  During one Chanukah celebration, decorations were placed over the plaque and left there until July of the following year. The board of directors was dissatisfied because the widow and her son stopped paying for capital improvements.  The board of directors that approved the arrangement with the widow and her son was dismissed and replaced with a new board.  This new board of directors voted to request the widow and her son to turn control of the fund over to the synagogue.

In an action seeking declaratory judgment, the sole function of the trial court is to ascertain the rights of the parties under existing law.  Ginsberg v. Post, 177 Conn. 610, 616 (1979).  Four specific questions were posed to the court to determine the rights of the trustees and the rights of the synagogue.  Prior to addressing these questions, the court found that a contract had been formed between the fund and the synagogue based on the synagogue’s acceptance of monies from the fund and other actions taken by the synagogue board of directors.  Therefore, the court found that the vote by the new board of directors had no legal significance because they could not unilaterally change the terms of the previous contract with the widow and her son.

Based on finding the existence of a contract, the court determined that the widow and her son were entitled to continue to control the fund and act as its trustees.  However, the court also found that equity required them, in their capacity as trustees, to reimburse the synagogue for the capital expenditures made in reasonable reliance on the agreement that the fund would pay for capital improvements.  The trustees had discretion to determine what constituted a capital improvement.  The fund was also required to continue to pay for capital improvements, on the condition that the memorial plaque was visible to all who would be able to see it.  The court ordered that the memorial plaque not be covered and, if it was, that would constitute a breach of contract on the part of the synagogue.  In that event, the widow and son would be free to terminate the trust and the fund, and either return the money to the donors or use it for other charitable purposes at their discretion.  Finally, the court suggested that the fund cease soliciting further donations and allow the remaining monies to be depleted to that the relationship between the parties could be terminated.

Should you have any questions relating to charitable trusts or other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Blumenthal v. Getraer, CV106007120S, 2011 WL 4953727 (Conn. Super. Ct. Oct. 4, 2011)

$211,000 in Fiduciary and Attorney’s Fees O.K. After Sibling Probate Quarrel

In a recent Appellate Court decision, the court upheld an award of $211,000 in fiduciary and attorney’s fees after probate of a highly disputed estate. The award was challenged by one of the three beneficiaries of the estate who claimed the award was excessive and inconsistent with the widely relied on Hayward factors set out by the Connecticut Supreme Court. Plaintiff also urged the court to adopt a new rule limiting the fiduciary and attorney’s fees that can be collected from an estate to an amount proportionate to the size of the estate. The court disagreed with the contention and declined to adopt such a rule.

The plaintiff and challenger of said fees was the daughter of the decedent. The other two beneficiaries in this probate were the two sons of the decedent. None of these siblings had a good relationship with the other and there was constantly disputes among them about how to best administer the estate. Ultimately, the court determined it was their constant bickering that resulted in the huge amount of attorney fees that in light of the situation could have been much more.

This probate case “involved more contentiousness, disputes, arguments, correspondence, pleadings, memoranda of law and judicial hearings than any other decedent’s estate” in the judge’s 30 years on the bench. The defendants’ expert witness, who reviewed the materials that detailed the requests the siblings made of Gallant(the defendant), testified that “the contentiousness [between the beneficiaries is] at a level I have only seen once in some forty-four years of this work.” The plaintiff’s expert witness conceded that the extensive quarrelling among the siblings made settling the estate “a very difficult matter,” and that one of the strategies defendant used to try to quell the siblings’ animosity was to directly and unequivocally tell them the truth: their constant quarrelling was resulting in fees that were diminishing the estate.

Despite this forewarning by the defendant lawyer, the plaintiff still sought to challenge the awarded fee. It was her firm belief that an attorney could not collect such a large amount of an estate. In actuality, the estate was worth over 1.2 million dollars and his fee constituted just 1/6th of the estate. This left more than 1 million to be dispersed between the three children.

In analyzing the issues claimed by the Plaintiff the Appellate Court reviewed the Hayward factor analysis made by the trial court who awarded the fee. First, the court stated it is well understood that “under [Connecticut] law an executor, administrator, trustee or guardian is entitled to a reasonable compensation for his services, depending upon the circumstances of the case.” Hayward v. Plant, 98 Conn. at 384, 119 A. 341. Further, in Hayward, our Supreme Court set forth nine factors for the trial court to consider when determining the reasonableness of such compensation: (1) the size of the estate; (2) the responsibilities involved; (3) the character of the work required; (4) the special problems and difficulties met in doing the work; (5) the results achieved; (6) the knowledge, skill and judgment required of and used by the executors; (7) the manner and promptitude with which the estate has been settled; (8) the time and service required; and (9) any other circumstances which may appear in the case and are relevant and material to this determination. Id., at 384–85, 119 A. 341.

After the determination of those factors, the trial court decided the figure of $211,000 was reasonable. In reviewing that decision “[t]he test is, has the court exercised a reasonable discretion, or, in other words, is its exercise so unreasonable as to constitute an abuse of discretion.” Hayward v. Plant, supra, 98 Conn. at 382, 119 A. 341. “This standard applies to the amount of fees awarded … and also to the trial court’s determination of the factual predicate justifying the award…. Under the abuse of discretion standard of review, [w]e will make every reasonable presumption in favor of upholding the trial court’s ruling, and only upset it for a manifest abuse of discretion…. [Thus, our] review of such rulings is limited to the questions of whether the trial court correctly applied the law and reasonably could have reached the conclusion that it did.”

There was much factual information that supported the trial court’s decision. At trial, the plaintiff conceded that the billing records submitted by the defendants to the Probate Court accurately reflected the work that the defendants performed, but she advanced an argument that much of that work was unnecessary and could have been avoided had Gallant been more decisive in his actions with regard to the estate. Her primary argument was that Gallant’s inability to sell the Bahamian property(which amount to about half of the estate) in a timely fashion and the erosion that occurred on the property during the time the property was for sale support a reduction of fiduciary and attorney’s fees under Hayward’s results and promptitude factors. The court, however, was presented with evidence of the siblings’ contentiousness and litigious nature, and determined that “an extensive amount of time was spent by Gallant in dealing with issues raised by the beneficiaries.” Among the myriad issues created by the beneficiaries included bickering about the listing price of the Bahamian property. Therefore, the award did have factual backing and could have been anticipated by plaintiff due to the siblings constant issues with how to best settle the estate.

So, with regard to the question of whether the court used the proper legal standard, the Appellate Court concluded that the trial court made an independent determination after a two day trial. It produced a written memorandum of decision, which provided in part: “When applying the standards set forth in Hayward v. Plant, the court finds that the fees charged by the defendants are reasonable under the unusual circumstances presented here.” Therefore, there was no error in the legal standard applied by the court.

Next, the Appellate Court addressed the plaintiff’s contention that a new rule should be adopted that limited attorney and fiduciary fees to a reasonable proportion of the estate. In declining to adopt such a rule the court stated that “size of the estate is one of the factors our Supreme Court set forth in Hayward, and as such, it should be considered by a court in determining whether fiduciary and attorney’s fees are reasonable. It is, however, one of nine factors. Elevating it to the dispositive level suggested by the plaintiff would run afoul of the sound holistic approach to reasonableness our Supreme Court set forth nearly a century ago.”
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Our estate planning firm in Westport Connecticut serves clients with will, trust, and estate law issues from all over the state including the towns of: Bethel, Bridgeport, Brookfield, Danbury, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, New Fairfield, Newton, Norwalk, Redding, Ridgefield, Shelton, Sherman, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton. We have the best probate attorneys in CT on staff that can help with your Connecticut or New York estate today.

If you have any questions or would like to speak to a probate law attorney about a will, trust, or estate matter, please don’t hesitate to call our office at (203) 221-3100. We offer free consultation on all matters. Call today.

Trustee Interpretation of Ambiguous Trust Provisions will not be Changed by a Court Without Evidence of a Clear Abuse of Trustee Discretion

In a recent case before the Superior Court, four trust beneficiaries filed a three-part complaint against the trustees of a trust created by their mother.  The complaint alleged breach of fiduciary duty, unjust enrichment, and other charges. The trial court ruled that the trustees had properly distributed the trust interests and entered judgment in their favor.

In 1953, a trust indenture known as the Hembdt Trust was drafted with assets consisting of royalty interests in oil, gas and mineral rights.  During her lifetime, the settlor and beneficiary of this trust (“the decedent”) married and had ten children.  Upon her death, the terms of the trust provided that the royalty interests would pass to “his or her legal representatives, heirs at law or next of kin in accordance with the provisions of law applicable to the domicile of the deceased beneficiary.”  In 1967, the decedent died. Pursuant to her will, several testamentary trusts were created, including a testamentary trust for the benefit of her husband (“marital trust”) and a trust for her children (“children’s trust”).  The trustees and executors of the decedent’s will determined that the provision in the Hembdt Trust required the trust’s royalty interests to pass into her estate which, in accordance with her will, resulted in these interests being distributed in a 54/46 ratio between the marital trust and the children’s trust.

The beneficiaries of the children’s trust argued that the entirety of the royalty interest should have been distributed to them as the decedent’s heirs at law because the term “legal representatives” in the Hembdt Trust provision, used under the circumstances provided, could only be interpreted to mean the children of the decedent.  The decedent’s husband, in his capacity as a fiduciary of the trusts, argued that the beneficiaries’ interpretation was inconsistent with the language of the trust instrument and the law.  He argued that the term “legal representatives” was used in conjunction with “heirs at law” and “next of kin;” therefore, the clear intent of the Hembdt Trust provision was that upon the death of the individual beneficiary, his or her interest would pass to: (1) the beneficiary’s legal representatives, which would be the beneficiary’s executors, if the person died testate, to be administered according to the beneficiary’s will, or the beneficiary’s administrators, if the person died intestate and a probate estate was opened; (2) the beneficiary’ heirs at law if the person died intestate and no probate estate was opened; and (3) the beneficiary’s next of kin if there were no heirs at law. The decedent’s husband further argued that if all three conditions existed, then the distributions would have to be in accordance with Connecticut law, which requires that, when a decedent leaves both a spouse and children, they both inherit.  Finally, the decedent’s husband argued that Connecticut law requires that if a decedent leaves a will, a distribution is made according to the will.   Conn. Gen. Stat. § 45a-431.  The remaining trustees adopted the arguments of the decedent’s husband.

According to Connecticut case law, a court’s role in the construction of a trust instrument is to determine the meaning of what the grantor stated in the trust instrument and not to speculate upon what the grantor intended to state in the instrument. Connecticut Bank & Trust Co. v. Lyman, 148 Conn. 273, 278-79, 170 A.2d 130 (1961).  Language in the trust instrument is to be accorded its common, natural and ordinary meaning and usage.  WE 470 Murdock, LLC v. Cosmos Real Estate, LLC, 109 Conn.App. 605, 609, 952 A.2d 106, cert. denied, 289 Conn. 938, 958 A.2d 1248 (2008) (internal quotation marks omitted). Furthermore, no language will be construed as to remove a trustee from equitable control; courts may intervene only to protect and preserve the trust in circumstances where the trustees have abused their discretion.  Gimbel v. Bernard F. & Alva B. Gimbel Foundation, Inc., 166 Conn. 21, 34, 347 A.2d 81 (1974)

Connecticut case law has established that the phrase “legal representatives” in a testamentary instrument is an ambiguous or equivocal term. Smith v. Groton, 147 Conn. 272, 274–75, 160 A.2d 262 (1960).   In interpreting the trust provisions, the court determined that the language did not permit the decedent’s beneficial interest to pass to each of the three categories (“legal representatives, heirs at law and next of kin”) or to pass to different recipients depending on an exercise of discretion (“legal representatives, or heirs at law, or next of kin”).  For that reason, the court found that the terms “legal representatives,” “heirs at law,” and “next of kin” did not conflict and that the provision required that the decedent’s beneficial interest pass to the recipients in the order clearly listed the trust instrument.  Therefore, the trustees did not abuse their discretion in determining that the royalty interests passed to the executors, as the decedent’s legal representatives, to be distributed to the marital trust and children’s trust in accordance with the decedent’s will.

Because the trial court did not find that the trustees of the decedent’s trusts abused their discretion, the court refused to upset their determination of how the decedent’s interests should be distributed.

Should you have any questions relating to wills, trusts, estates and other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Heath v. Heath, CV094044709S, 2012 WL 2477953 (Conn. Super. Ct. June 5, 2012)

Assets Protected From Creditors in Connecticut

In today’s economy more and more people find themselves having a hard time paying the bills and avoiding late payments.  Still others have a problem with creditors chasing them for unpaid debts.  Now more than ever it is important for you to know what assets are protected from creditors and what are not.

Connecticut law provides some protection from creditors in a situation where your income or assets are subject to a court judgment or lien.  You can protect yourself in a variety of ways by planning ahead and consulting with a professional financial planner and an attorney.   Taking out liability insurance or setting up a corporate entity or trust for your property are examples of how you can shield your assets from future creditors.  However, there are some individual assets that are automatically protected from creditors.  Here is brief summary of the law in Connecticut:

A.            Wages

Once a creditor obtains a judgment against you, it can apply for an execution against your wages.  See Connecticut General Statutes, Section 52-361a.  Connecticut law does provide for some protection in this situation.   No more than twenty-five percent of an individual’s weekly disposable earnings may be subject to a wage execution.  The portion of disposable earnings subject to the wage execution is withheld and applied to the amount of the judgment.    In some cases, the maximum amount that can be withheld may be less depending upon the ratio between the individual’s disposable earnings and the hourly minimum wage in effect at the time of the execution.

B.             Retirement Plans

Generally, retirement plans are exempt from claims by creditors.  Both IRAs and 401ks are protected assets pursuant to Connecticut General Statues, Section 52-321a.

C.             Personal Property

Connecticut law provides a list of exempt personal property that creditors cannot claim an interest in pursuant to Connecticut General Statutes, Section 52-352b.  The list of property includes basics necessities such as apparel, bedding, foodstuffs, household furniture and appliances.  Items necessary for a person’s occupation or profession such as tools, books, instruments, farm animals and livestock feed are also considered exempt property.  Wedding and engagement rings are not subject to creditor claims as well.

D.             Insurance and Government Assistance Payments

Some insurance and government assistance payments are exempt from creditors under Connecticut General Statutes, Section 52-352b.   Health and disability insurance payments are exempt as are Workers’ compensation, Social Security, veterans and unemployment benefits.  In addition, under Connecticut General Statutes, Section 38a-453, creditors of an insured cannot seek payment from a life insurance policy beneficiary under most circumstances.

E.             Child Support and Alimony Payments

Any court approved child support payments received by a debtor are exempt and protected from creditors.  Alimony payments, to the extent that wages are exempt from creditor claims, are also protected.  See Connecticut General Statutes, Sections 52-352b & 52-361a.

F.             Real Estate

Your homestead or personal residence is exempt from creditor claims up to the value of seventy-five thousand dollars.  If a creditor has a money judgment arising out of hospital services, then the value of the exemption increases to one hundred twenty-five thousand dollars.  The exemption is calculated based upon the fair market value of the equity in the property taking into account any statutory or consensual liens on the property.  See Connecticut General Statutes, Section 52-352b.

There is no such exemption in place for commercial real estate or rental properties.

G.             Motor Vehicles

Only one motor vehicle is exempt from creditor claims up to the value of one thousand five hundred dollars.  The exemption is calculated by estimating the fair market value of the motor vehicle and taking into account any relevant liens or security interests.  See Connecticut General Statutes, Section 52-352b.

H.              Bank Accounts

         A creditor can enforce a judgment by way of a bank execution.  However, the same exemptions apply to bank accounts as they do to government assistance, insurance, alimony and child support payments as outlined above.  Therefore, you have the opportunity to challenge a bank execution based on these exemptions and prevent a creditor from taking money out of your account.   In addition, you can claim a general exemption not to exceed one thousand dollars.

In conclusion, Connecticut law prevents creditors from seizing all of your income, property, possessions and savings pursuant to a judgment or lien.  However, the law does not prevent a debt collector from jeopardizing your livelihood and financial wellbeing.  You best bet is to limit individual liability and plan ahead to avoid a creditor claim in the first place.  Consulting with a professional financial planner and an attorney is recommended.

Estate Planning for Single Individuals

For single individuals without children and without any future plans to have children, it is still vitally important to formulate an estate plan in the event of untimely death.  A single person, of course, possesses assets, possessions, money, accounts, etc., and an estate plan allows for all of those assets to be distributed to the person, persons, charities, or organizations of the decedent’s choosing.

Without a will, an individual’s possessions and assets will be distributed to relatives and family members of the decedent in accordance with a preset order determined by law.  This, however, is predetermined and may not be the order in which the deceased may have wanted his or her assets to be distributed.  Furthermore, without a will, the deceased’s family might have to expend a lot of money navigating the waters of the administrative proceedings associated with intestacy.  Intestacy is the term for what happens when a person dies without a will.

Under Connecticut law, where a person dies without any children and without a will, the estate will be distributed in accordance with the following order: first a portion will go to the decedent’s husband or wife, if any; next, to the parent or parents of the deceased; if there is no parent, the estate will go to the siblings of the deceased and those who legally represent them.  If the deceased has no surviving parents or siblings, the “residue of the estate shall be distributed equally to the next of kin in equal degree.”[1] Those “next of kin” may be relatives you have never met or heard of or met, but who by law could be entitled to a share of your estate in the event of death.

It is important to consult with an attorney who is experienced in estate planning law.  The attorneys at Maya Murphy have years of experience in will consultations, preparation, and contests.  Should you have any questions relating to your estate planning, do not hesitate to contact our Westport, Fairfield County office at 203-221-3100.


[1] Conn. Gen. Stat. §45a-439.

What is a Pre-Need Funeral Services Contract?

A pre-need funeral services contract allows an individual to set aside funds, before his or her death, to be used specifically to pay for funeral expenses. Under the terms of such a contract, a “purchaser” signs the contract and advances funds, which are held in an escrow account for the purpose of paying for future funeral services for the “beneficiary” upon his or her demise. See C.G.S. §42-202. A pre-need funeral services contract may only be sold by a funeral director licensed by the public health commissioner. See C.G.S. §42-201.

There are strict requirements for such contracts under Connecticut law. For example, funeral services contracts must be in writing, and must contain the following:

(1) The name, address, telephone number and Social Security number of the beneficiary and the purchaser;

(2) The name, address, telephone number and license number of the funeral director for the funeral service establishment providing the goods or services;

(3) A list of the selected goods or services, if any;

(4) The amount of funds paid or to be paid by the purchaser for such contract, the method of payment and a description of how such funds will be invested and how such investments are limited to those authorized pursuant to subsection (c) of section 42-202;

(5) A description of any price guarantees by the funeral service establishment or, if there are no such guarantees, a specific statement that the contract contains no guarantees on the price of the goods or services contained in the contract;

(6) The name and address of the escrow agent designated to hold the prepaid funeral services funds;

(7) A written representation, in clear and conspicuous type, that the purchaser should receive a notice from the escrow agent acknowledging receipt of the initial deposit not later than twenty-five days after receipt of such deposit by a licensed funeral director;

(8) A description of any fees to be paid from the escrow account to the escrow agent or any third party provider;

(9) A description of the ability of the purchaser or the beneficiary to cancel a revocable funeral service contract and the effect of cancelling such contract;

(10) For irrevocable contracts, a description of the ability of the beneficiary to transfer such contract to another funeral home; and

(11) The signature of the purchaser or authorized representative and the licensed funeral director of the funeral service establishment.

See C.G.S. §42-200(b). A funeral services contract must also contain a statement that if the particular merchandise provided for in the contract is not available at the time of death, the funeral service establishment will furnish merchandise similar in style and at least equal in quality of material and workmanship to the merchandise provided for in the contract.  See C.G.S. §42-202(g). Funeral services contracts should not be confused with burial insurance policies, which are separately codified in the Connecticut General Statutes, under Section 38a-464.

For further information on pre-need funeral services contracts in Connecticut, see Chapter 743C of the Connecticut General Statutes. The General Statutes can be found online at: http://www.cga.ct.gov/. Additional information is available in the State of Connecticut’s Office of Legal Research Report on pre-need funeral services contracts online at: http://www.cga.ct.gov/2007/rpt/2007-R-0578.htm.

Probate Courts Hearing a Conservator’s Application to Transfer Income from a Conserved Person’s Estate Must Provide Notice to All Parties Who May Have an Interest in the Estate

In a recent case before the Superior Court of Connecticut, a named beneficiary of a will filed an appeal to reverse a probate court order that authorized the conservator of his benefactor to transfer all her assets into trusts.  The conservator brought a motion to dismiss the appeal based on  lack of standing.  The court held that the named beneficiary had standing to file his appeal and denied the motion to dismiss.

In January 2008, the probate court appointed John Nugent (“Nugent”) as the conservator of the person and the estate of Josephine Smoron.  In April 2009, the Nugent applied to the probate court to approve the creation and funding of a revocable trust and an irrevocable trust for Ms. Smoron.  At the time of the May 2009 probate court hearing, Samuel Manzo (“Manzo”) was a named beneficiary under Ms. Smoron’s will. The probate court approved Nugent’s application and authorized the creation and funding of the two trusts; however, the hearing was held without providing notice to Manzo or other named beneficiaries of Ms. Smoron’s will.  Nugent, in his capacity as conservator, established and funded the trusts by quitclaiming real property owned by Ms. Smoron to the irrevocable trust and by depositing over $218,000 of her assets to the revocable trust.  Pursuant to the terms of the trusts, upon Ms. Smoron’s death, the proceeds were to be distributed to three churches, with no provisions for the beneficiaries named under will.  In June 2009, Ms. Smoron died.

Nugent argued that Manzo’s appeal of the probate orders authorizing the creation and funding of Ms. Smoron’s trusts must be dismissed because Manzo was a “mere prospective heir” under Ms. Smoron’s will and, therefore, lacked a sufficient legal interest to challenge the rulings of the probate court.  However, in the instant case, the Superior Court found it to be a provable fact that Manzo was a beneficiary of Ms. Smoron’s will rather than a prospective heir.

Connecticut law specifically requires the probate court to hold a hearing and provide notice to “all parties who may have an interest” in the estate before authorizing a conservator to transfer his conserved person’s property.  Conn. Gen. Stat. § 45a-655(e).  The same law further provides that the probate court should also consider the provisions of an existing estate plan before authorizing the conservator to make transfers of income or principal from the estate of the conserved person.  The Superior Court found that, as a named beneficiary under Ms. Smoron’s will at the time of the May 2009 order, Manzo had both an interest in the estate and an interest in ensuring that the probate court considered Ms. Smoron’s will as part of the existing estate plan.  Therefore, Manzo should have received notice of the probate court hearing.

Therefore, the Superior Court held that, as a named beneficiary under the will, Manzo was aggrieved by the May 2009 probate court order, should it be permitted to stand. Pursuant to that order, Nugent not only placed Ms. Smoron’s assets in the trusts, but he also designated three churches as beneficiaries of the trusts upon Ms. Smoron’s death. The court characterized these actions as effectively disinheriting Manzo and nullifying any provisions that had been made for him under Ms. Smoron’s will.  Based these facts, the trial court determined that Manzo was a proper party to invoke the jurisdiction of the court.

The Superior Court denied Nugent’s motion to dismiss and permitted Manzo to go forward in the Superior Court of Connecticut with his appeal of the probate court orders authorizing the creation and funding of trusts for Ms. Smoron’s estate.

Should you have any questions relating to wills, trusts, estate planning or other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Manzo v. Nugent, X04HHDCV105035142S, 2012 WL 1959076 (Conn. Super. Ct. May 8, 2012)

Beneficial Interest in a Trust Does Not Equate to Beneficial Ownership of Real Property Held in Trust

In a case before the Superior Court of Connecticut, a beneficiary of a revocable family trust filed a motion to dismiss the summary process action brought by the trustee to regain possession of premises held in trust and occupied by the beneficiary.  The trial court denied the motion to dismiss.

In 2003, the trustee and her husband created a revocable family trust, consisting of three sub-trusts.  The trust named six beneficiaries, including the current trustee. The contested premises were allocated to “Sub Trust A” and occupied by one of the beneficiaries. The current trustee became the sole trustee upon her husband’s death in 2004.  In June 2009, the trustee served notice to the beneficiary to quit the contested premises within three weeks, citing nonpayment of rent, lapse of time, and that the beneficiary never had a right or privilege to occupy the premises.  The beneficiary moved to dismiss the summary process action.

According to Connecticut law, a summary process action requires the individual bringing the action to be the owner of the property. Conn. Gen. Stat. § 47a-23(a)(3).  In a trust, the trustee holds legal title to the assets of the trust. See B.A. Ballou & Co. v. Citytrust, 218 Conn. 749, 753, 591 A.2d 126 n .2, 218 Conn. 749, 591 A.2d 126 (1991). A trust beneficiary has no legal title or ownership interest in the individual assets of the trust.  The Connecticut Supreme Court has held that a beneficiary of a revocable trust does not have a vested property interest, but only an expectancy until the death of the settlor renders the trust irrevocable. See Bartlett v. Bartlett, 220 Conn. 372, 376–77, 599 A.2d 14 (1991).

Although the beneficiary did not dispute that the trustee held legal title to the contested premises, he argued that the trustee could not bring a summary process action against him because he was a co-owner of the contested premises.  He contended that he was entitled to beneficial ownership of the premises and, therefore, fell within the definition of “owner” provided by Connecticut law, Conn. Gen. Stat. § 47a-1(e).

Connecticut law defines property ownership in terms of both legal title and beneficial ownership.  Conn. Gen. Stat. § 47a-1(e).  An “owner” includes one in whom is “vested…all or part of the beneficial ownership and a right to present use and enjoyment of the premises.” Conn. Gen. Stat. § 47a-1(e)(2).  Beneficial ownership is the right to enjoy the premises where legal title is in one person, the right to beneficial use or interest is in another person, and the courts recognize and can enforce the right to beneficial use or interest. Bender v. Nuzzo, Superior Court, Judicial District of New Haven, Housing Session, Docket No. SPNH 9607 47892 (July 10, 1997, Levin, J.).  Beneficial use is distinguished from the right of occupancy or possession because the right to beneficial use encompasses the right to use and enjoy property to one’s liking.

In hearing the motion to dismiss, the court refused to determine whether the beneficiary had a vested or contingent beneficial interest in the family trust, which would not become irrevocable until the trustee’s death.  However, the court found that the beneficiary only demonstrated that he occupied the premises.  He did not show that he had any right to the present use and enjoyment of the premises, under the terms of the trust or otherwise, as required to establish beneficial ownership.  Absent legal title to the premises or vested beneficial ownership, the court found that beneficiary was not an owner of the property and that the trustee had proper standing to bring the summary process action against him.

Therefore, the court denied the beneficiary’s motion to dismiss the trustee’s summary process action to evict him from the contested premises.

Should you have any questions relating to real estate, trust or personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.