Chapter 2 - CHAPTER 2 INTERESTS IN TRUSTS AS PROPERTY

• Jurisdiction: Colorado

Chapter 2 INTERESTS IN TRUSTS AS PROPERTY

The law regarding treatment of interests in trusts as divisible property on the dissolution of marriage is diverse and may be determined both statutorily and judicially. The operation of a state's property division statute may preclude or limit the inclusion of beneficial interests in trusts in the pool of assets to be divided. Some courts have held that an interest in trust is not considered property until the interest becomes possessory (the beneficiary has received or has a present right to withdraw the trust property). Other courts have determined that certain remainder interests constitute property in situations where the trust instrument requires an outright distribution to a beneficiary during the beneficiary's lifetime. Yet other decisions treat interests in trusts as divisible, regardless of whether the interest is fully distributable to a beneficiary at some point in time. Mandatory income interests in...