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Wednesday, September 15, 2010



A-4185T1/4211-07T1 08-31-10 (consolidated)

Defendant/wife was the beneficiary of a discretionary

support trust settled by her parents. She and her parents were

the trustees of the trust.

The judge handling the divorce action ordered

plaintiff/husband to name the trust (and other family trusts) as

third-party defendants in the litigation. The trusts

participated in the trial.

At the conclusion of the trial, limited to the financial

issues of alimony, equitable distribution and child support, the

judge imputed income from the trust to defendant, and ordered

the trustees to make a monthly payment to her. He then further

ordered the trust to continue making payments for shelter-

related expenses that it historically had made. The judge then

computed plaintiff's alimony obligation based upon this imputed

income stream.

We concluded that defendant's beneficial interest in the

discretionary support trust was not an asset held by her for

purposes of the alimony statute, and therefore no income should

have been imputed to her. However, we recognized that the

current Restatement (Third) of Trusts, extensively relied upon

by the trial judge, has changed the law, and that pursuant to

its terms, defendant has an enforceable interest in the trust

income. As a court of intermediate appellate jurisdiction, we

refused to apply the terms of the current Restatement, which

have not been adopted in any reported appellate or Supreme Court

opinion in New Jersey.

We also reversed other provisions of the judgment of

divorce regarding computation of the alimony award, the child

support award, and equitable distribution.