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White v. Sargent6/2/2005
Argued May 3, 2005
Before TERRY, REID, and WASHINGTON, Associate Judges.
In these consolidated appeals, appellants Eva White and Evelyn Parchment challenge the trial court's decision to grant summary judgment in favor of appellee Lucy Sargent. The trial court held that the trust created by her late husband, Ernest Sargent, was null and void because it was created for the fraudulent purpose of concealing assets and because it resulted in an improper circumvention of Mrs. Sargent's marital rights. We agree with the trial court's ruling and the reasons behind it, and accordingly we affirm the judgment.
I.
Ernest and Lucy Sargent married each other twice, first in June of 1991 and again in December of 1995. The couple had two children together: Mary, who was born shortly after the dissolution of the first marriage, and Angelique, who was born during the second marriage. In June 1992 Mr. Sargent filed for divorce, after Mrs. Sargent sued for a civil protection order; a final decree of divorce was entered soon thereafter. Because of the short duration of the marriage and the court's finding that Mrs. Sargent was able to work, the court denied Mrs. Sargent's request for permanent alimony, but ordered Mr. Sargent to pay child support for Mary. One issue during that proceeding was the net value of Mr. Sargent's assets. He denied ownership of certain bank accounts and certificates of deposit, with a total value of approximately $460,000, instead claiming that he merely had power of attorney over them. The court found as a fact, however, that Mr. Sargent owned those funds, that he had "deliberately divested himself of those assets on paper," and that his testimony regarding the assets was "neither credible nor supported by the record evidence."
The Sargents remarried on December 12, 1995, and had a second child, Angelique, approximately nine months later. During the course of that marriage, Mr. Sargent insisted that Mrs. Sargent stay home and care for Mary and Angelique. The couple separated in early November of 1997. This time, it was Mrs. Sargent who filed for divorce in May of 1998, and in that action she requested both child support and alimony. At issue again was the amount of assets held by Mr. Sargent, who testified in July of 1998 that he had a negative net worth and did not own or have an interest in any substantial financial assets. Nevertheless, in an October 1998 support order, a Magistrate Judge of the Superior Court found that Mr. Sargent had "significant assets from which he earn additional income above the amount he reported to the Court." Mr. Sargent's monthly child support obligation was thus increased.
During the pendency of the 1998 child support proceedings, Mr. Sargent created the Martha Baker Family Trust ("the trust") on August 4, 1998. The corpus of the trust consisted mainly of annuities. The original beneficiaries of those annuities had been Mr. Sargent's young daughters, Mary and Angelique. Upon creation of the trust, however, Mr. Sargent re-designated the trust itself as the sole beneficiary of the annuities. The declaration of trust named Eva White and Evelyn Parchment as trustees. Its "primary purpose" was "to provide for the education and health care of [Mary and Angelique]," as well as to "allow [Mr. Sargent] to live in the community for as long as possible and to ensure maximum level medical . . . care for during lifetime . . . ." In addition, the declaration of trust directed the trustees, upon Mr. Sargent's death, to rename the trust the "Ernest E. Sargent Trust." Mr. Sargent retained the power to obtain, from the trustees, as much of the income and principal as he desired during his lifetime. He also retai
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