Posted by Nydia Streets of Streets Law in Florida Divorce
Can a Florida divorce order a trust to be dissolved in order to effectuate equitable distribution? Sometimes, spouses place assets in trust for estate planning purposes. But if a divorce happens, the assets in the trust may be marital assets subject to a claim from both spouses. This was an issue in the case Hyatt v. Zimmerman, 4D22-896 (Fla. 4th DCA July 19, 2023).
In their divorce case, the former wife did not mention the existence of a trust which held two mortgages on the marital home. The beneficiaries of the trust were the former husband and former wife as joint tenants with right of survivorship. Shortly after the divorce was finalized, the former husband died and the former wife became the sole beneficiary of the trust. Once the trust was discovered, the trial court ordered the former wife to dissolve the trust in order to effectuate the equitable distribution ordered by the court regarding the marital home. The former wife appealed.
The appellate court affirmed, holding “We find the trial court had jurisdiction to order the former wife to dissolve the trust and compel her to quitclaim title of the marital home to the former husband’s estate in order to enforce the sale of the marital home, even though the trial court did not have jurisdiction over the trustee. See Lallouz v. Lallouz, 695 So. 2d 466, 468 (Fla. 3d DCA 1997) (“The court’s in personam jurisdiction alone provides the court with the authority to determine the equitable rights of the parties.”); see also Royal v. Parado, 462 So. 2d 849, 854 (Fla. 1st DCA 1985) (“[C]ourts of equity having jurisdiction of the person of a party have exercised the power to compel him to perform a contract, execute a trust, or undo the effects of a fraud . . . .”) (citation omitted).
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