This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. 480A.08, subd. 3 (1994).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Vallie B. Kriz, petitioner,
James J. Kriz, Jr.,
Filed June 4, 1996
Affirmed in part, reversed in part and remanded
Hennepin County District Court
File No. 194230
William F. Forsyth, John A. Mack, Henson & Efron, P.A., 1200 Title Insurance Building, 400 Second Avenue South, Minneapolis, MN 55401 (for appellant)
Robert H. Zalk, Sonja Trom Eayrs, Zalk & Eayrs, P.A., Sunset Ridge Business Center, 5861 Cedar Lake Road, Minneapolis, MN 55416 (for respondent)
Considered and decided by Short, Presiding Judge, Kalitowski, Judge, and Amundson, Judge.
U N P U B L I S H E D O P I N I O N
Appellant challenges the district court's award of spousal maintenance and division of property. We affirm in part, reverse in part and remand.
In 1961, Margaret Brewster established the Margaret Brewster trust fund, an irrevocable spendthrift trust, for each of Margaret Brewster's grandchildren, one of whom is appellant Vallie Kriz (now known as Vallie Brewster). The trust allows for the distribution of at least half of the income to the beneficiaries in quarterly payments. The trustees, however, have full discretion over the administration and distribution of the trust funds. A provision in the trust allowed for the termination of the trust once Brewster reached the age of 40, but no such termination ever occurred. The total trust assets were approximately $1,200,000 at the time of the dissolution proceedings.
In 1975, Vallie Brewster established the Vallie Trust, a revocable trust, with herself, an attorney, and the Bank of Boston-Connecticut as trustees. The total trust assets were approximately $61,500 at the time of the dissolution proceedings.
In this dissolution action, the parties disputed the divisibility of the Margaret Brewster trust, the Frederick Brewster trust, and the Vallie Kriz trust. Brewster was awarded her entire interest in the Frederick Brewster trust, and Kriz was awarded $1,200,000, which was to be paid by Brewster either from monies she held in the Margaret Brewster trust fund or from any other means possible. The district court found the assets of the Vallie Trust to be marital and awarded Kriz $61,500. Kriz was also awarded 96% of the parties' net marital estate and permanent spousal maintenance. This appeal followed.
D E C I S I O N
This court will not overturn the district court's decision regarding the distribution of property upon dissolution of a marriage absent a clear abuse of discretion. Aaron v. Aaron, 281 N.W.2d 150, 152 (Minn. 1979). We will affirm the district court's distribution of property as long as it has a reasonable basis in fact and principle. Kreidler v. Kreidler, 348 N.W.2d 780, 782-83 (Minn. App. 1984). However, characterization of a future entitlement as property subject to distribution in a marital estate is a question of law upon which this court exercises its independent judgment. See Salstrom v. Salstrom, 404 N.W.2d
848, 850 (Minn. App. 1987).
I. Spendthrift Trust
Brewster argues that the district court erred because it awarded Kriz income from Brewster's spendthrift trust even though the very nature of a spendthrift trust bars attachment of its assets until the receipt of those funds. We agree.
It is the intent of the donor, not the character of the donee's obligation, which controls the availability and disposition of the trust. Erickson v. Erickson, 197 Minn. 71, 78, 266 N.W. 161, 164 (1936). The donee's obligation to pay maintenance does not transcend the right of the donor to do as she pleases with her own property. Id. When a donor leaves the interest of the beneficiary assignable or transferrable, it generally may be reached by creditors. Id. If, however, the right to transfer is completely restrained by appropriate language, then the interest may not be reached by creditors. Id. If maintenance is to be an exception to the protection offered by spendthrift provisions, there must be some interpretation of the donor's language by which an implied exception may be construed into the instrument of the trust. Id.
Paragraph 10 of the Margaret Brewster trust provides that:
[T]he right of a grandchild for whom a trust fund is established to receive the income or principal or any part thereof shall not be alienated, voluntarily by assignment, conveyance or other form of transfer or by pledge, mortgage or other form of transfer or hypothecation, or involuntarily by attachment, garnishment, seizure or other form of sequestration or by bankruptcy or insolvency proceedings. In the event of an attempted alienation of income, contrary to the preceding provisions, the trustees, in the exercise of their discretion, may thereafter withhold and accumulate the income otherwise payable to a grandchild or they may expend so much thereof as they deem reasonably needed for the maintenance and support of such grandchild or its spouse or children.
The language of paragraph 10 attests to the donor's intent to keep the corpus of the trust out of the reach of creditors. Because this is the clear intent of the donor we conclude that the language of the Margaret Brewster trust bars the district court from attaching its assets in order to satisfy the judgment.
II. Revocable Trust
Brewster contends that the district court erred in finding that the assets of the Vallie Trust were marital property and awarding Kriz $61,500. She argues that, because the trust was established with assets Brewster received prior to the parties' marriage, those assets should remain nonmarital property.
Marital property is defined as "property, real or personal * * * acquired by the parties * * * at any time during the marriage relation between them." Minn. Stat. ' 518.54, subd. 5 (1994). All property acquired subsequent to the marriage is presumed to be marital property, and that presumption is overcome only by a showing that the property is nonmarital. Id. The party seeking to demonstrate that an asset is nonmarital "must do so by a preponderance of the evidence." Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993).
The district court, in awarding Kriz the assets in the Vallie Trust stated that "[n]o evidence was presented that the Trust assets are nonmarital." Thus, although Brewster contends that the assets were acquired prior to the marriage, she failed to satisfactorily trace the assets of the Vallie Trust to assets acquired prior to the marriage. See Rudbeck v. Rudbeck, 365 N.W.2d 330, 334 (Minn. App. 1985). After reviewing the record, we conclude that the district court did not abuse its discretion in finding that Brewster failed to satisfy her burden of proving the assets were nonmarital.
III. Marital Property Division
Brewster contends that the district court erred in awarding 96% of the parties' net marital estate to Kriz, arguing that the award is unfair and not supported by the findings.
On appeal, this court must affirm a district court's division of marital property if "it had an acceptable basis in fact and principle even though this court may have taken a different approach." Servin v. Servin, 345 N.W.2d 754, 758 (Minn. 1984).
After reviewing the record, we find that the district court's division of marital property is supported by the facts and thus, the court did not abuse its discretion in awarding Kriz 96% of the net marital estate.
IV. Attorney Fees
Kriz contends that the district court erred in ordering that each party be responsible for their own attorney fees, arguing that the district court's failure to award him attorney fees was an abuse of discretion.
An award of attorney fees falls within the discretion of the district court and will not be reversed absent a clear abuse of that discretion. Katz v. Katz, 408 N.W.2d 835, 840 (Minn. 1987). After careful review of the record, we find that the district court did not abuse its discretion in ordering that each party be responsible for their own attorney fees.
V. Spousal Maintenance
In light of our reversal of the award of $1,200,000 to be paid to Kriz from the Margaret Trust, we remand to the district court for a reevaluation of the spousal maintenance award.
Affirmed in part, reversed in part and remanded.