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White v. Sargent6/2/2005
1998 complaint for absolute divorce clearly stated that she sought alimony from Mr. Sargent. Because Mr. Sargent established the trust in August of 1998, during the pendency of the second divorce proceeding, there can be no question that he created it while alimony was at issue.
B. Circumvention of Marital Rights: The Windsor Factors
In Windsor v. Leonard, the decedent established a revocable trust prior to her death and transferred $190,000 of her assets to the trust, the beneficiaries of which were various friends and charities. After her death, her husband renounced his rights under her will and elected instead to take one-half of her "net estate" under D.C. Code ยง 19-113. He claimed that the $190,000 in the trust should be included in his wife's "net estate" for the purpose of determining his statutory share. The Windsor court, noting that courts are generally "hesitant to set aside such transfers if they were made in good faith," laid out the " 'controlling rules' to be applied in determining whether or not an inter vivos transfer is an improper circumvention of the marital rights of the surviving spouse . . . ." 154 U.S. App. D.C. at 349, 475 F.2d at 933. They are: (1) the "completeness" of the transfer; (2) the motive for the transfer; (3) participation by the transferee in the alleged fraud on the surviving spouse; (4) the amount of time between the transfer and the decedent's death; and (5) the degree to which the surviving spouse is left without an interest in the decedent's property or other means of support. Id. at 350, 475 F.2d at 934 (citing Whittington v. Whittington, 205 Md. 1, 106 A.2d 72 (1954)). In the case at bar, the trial court considered all of these factors and concluded that the trust was established for the purpose of circumventing Mrs. Sargent's marital rights. Appellants challenge the court's rulings with regard to the Windsor factors. We address each one in turn.
1. Completeness of the transfer. Appellants assert that the trial court "misapplied the law in Windsor." With regard to completeness, however, the court determined that the transfer was, in fact, complete, even though Mr. Sargent "retained the right to receive income, draw from principal, change trustees, and amend the terms of the trust." Appellants do not appear to contest this ruling.
2. Motive for the transfer. The trial court stated that " he record illustrates several factors that suggest Mr. Sargent may have had a fraudulent motive when he created the trust." As noted above, those factors included "the timing of the establishment of the trust" (because it was created "in the midst of a dispute over child support and permanent alimony during the second divorce proceeding") and Mr. Sargent's lack of credibility on the subject of his finances. Viewing the record in the light most favorable to appellants, we find no error in the court's ruling. The record shows that Mr. Sargent lied (two judges so found) about the amount and value of assets in his possession during both the first and the second divorce proceedings. Moreover, his Last Will and Testament - also prepared during the pendency of the second divorce - reveals a motive to prevent Mrs. Sargent from obtaining any of his assets upon his death. He left her only $100 and directed that "under no circumstances shall the minors' mother . . . be allowed to serve or be designated as a guardian of the property, trustee, or in any other fiduciary capacity over the assets flowing from me directly or through my estate or any trust agreement to my minor children herein." In light of this record, the trial court did not err when it concluded that Mr. Sargent "may have had a fraudulent motive" to circumvent Mrs. Sargent's marital rights wh
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