The Rhode Island Supreme Court recently decided an appeal from a Superior Court ruling that interpreted a Family Court marital settlement agreement. The case is one of the first impressions in Rhode Island and has significant precedential value for those divorcing in Rhode Island.
In Glassie v. Doucette the daughter of the formerly married couple sued her father’s estate to enforce the marital settlement agreement that her mother and father entered years prior. The Rhode Island Family Court marital settlement agreement contained a provision creating a trust for the benefit of the daughter. It is not uncommon in Rhode Island for divorcing parties to negotiate a marital settlement agreement which contains trust provisions for the benefit of a child or other family member.
After the father’s death, the daughter alleged that the trust was not adequately funded to the level negotiated in the marital settlement agreement. The daughter sued her father’s estate to recover the funds that she alleged should have been paid into the trust.
The Supreme Court ruled that because the trust was a creature of the marital settlement agreement, the daughter did not have a standing to bring suit against the estate and did not have a direct cause of action on her own, meaning she could not bring a suit to enforce the terms of the marital settlement agreement.
The Supreme Court found that trust law controls the controversy, not contract law, and because the daughter is merely a beneficiary of the trust, she had no authority to maintain an action as a third party beneficiary. The Supreme Court stated that it was only the “trustee [who] is the appropriate party to bring suit against third parties on behalf of trust beneficiaries [and therefore] we conclude that [daughter] does not have standing to maintain this cause of action. In our opinion, once the Trust was created, the law of trust became the governing law.”
For a copy of the decision, contact McIntyre Tate LLP here.