New Case: Dahl v. Dahl

In Dahl v. Dahl (2015), the Utah Supreme Court held that a trust is not a Domestic Asset Protection Trust (DAPT). 

Dr. Charles Dahl and Ms. Kim Dahl were married for nearly eighteen years. On October 23, 2002, Charles executed a trust instrument called The Dahl Family Irrevocable Trust that named Charles as Settlor and his brother C. Robert Dahl as Investment Trustee. Nevada State Bank was named as Qualified Person Trustee.  The trust named Nevada as the domicile in its choice of law provision.

On October 23, 2002, Charles transferred 97% of Marlette Enterprises, L.L.C., a Utah limited liability company, to the Trust, keeping 1% for himself and 1% for each of the parties’ two children.  As of December 31, 2002, the LLC owned brokerage accounts with a total value of $935,996.

On June 20, 2003, Charles and Kim jointly deeded their primary residence to the Trust. 

Charles filed for divorce on October 24, 2006 and the Decree of Divorce was entered July 20, 2010. Kim subsequently sought a share of the Trust assets, which she claimed were marital property.  Specifically, she argued that the Trust was null and void, that the Trust was revocable as a matter of law, that she was a settlor of the Trust, and that she was entitled to an accounting from the Trust.  The parties filed cross-motions for summary judgment, and the district court granted the Trust Defendants’ motion, dismissing Kim’s claims

On appeal, the Utah Supreme Court determined that Utah has a strong public policy interest in the equitable division of marital assets and that Utah state law should apply to the trust even though the stated choice of law in the trust was Nevada. The court said that the trust was clearly intended to be a DAPT.

Special thanks to Steve Oshins (Oshins & Associates LLC) for bringing this case to my attention.