A little more than a year ago, we blogged on the reported Appellate Division Case, Tannen v. Tannen, which addressed the issue of trusts in the context of family law cases.  Relatedly, we blogged on the impact of income from a discretionary trust and whether it reduced a party’s need.

In Tannen, the trial court, relying on the newest version of the Restatement of Trusts, required the trustee of a discretionary trust to make distributions to the beneficiary of the trust. Though the trust assets earned significant income, there was no requirement in the trust document for the distribution of the income to the beneficiary. 

The Appellate Division reversed, holding that by applying existing law, which has incorporated various provisions of the Restatement (Second) of Trusts, Wendy’s beneficial interest in the Wendy Tannen Trust was not an “asset held by” her for purposes of N.J.S.A. 2A:34-23(b)(11) of the alimony statute. As  such, the panel determined that no income from the Wendy Tannen Trust should have been imputed to Wendy in determining Mark’s alimony obligation. Addressing the trial court’s reliance on the newest Restatement, the Appellate Division noted:

[a]s a court of intermediate appellate jurisdiction, we do not presume to adopt the Restatement . . . as the law of this state and apply its provisions to the facts of this case. Given the significance of its principles in the context of [the New Jersey statute dealing with the power of a court to impute income to a party in a divorce action), such determination would be more appropriately made by our Supreme Court.

As a result, as practitioners, we all awaited the Supreme Court’s decision on this expecting that they would tell us one way or the other whether trial court’s rationale would become the law of this state.  Doing so might have weakened the sanctity of trusts, but might have been consistent with the jurisprudence of this State that is typically deferential to and supportive of the support recipient for public policy reasons. 

The Supreme Court decided – drum roll please – :The judgment of the Appellate Division is affirmed,
substantially for the reasons expressed in Judge Messano’s opinion of the Appellate Division reported at 416 N.J. Super.248 (2010)."  This one sentence opinion is an anticlimactic end to what could have been a very interesting discussion of an important legal issue.  Because Judge Messano deferred to the Supreme Court on a policy issue, as a student of the law, it would have been interesting to hear our high court explain their rationale given the limitations that the Appellate Division expressed in their opinion.


Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501 or esolotoff@foxrothschild.com.