When Irrevocable Trusts Aren’t: Lessons from Two Divorce Courts

Two recent divorce cases highlight critical risks for irrevocable trusts when spouses retain excessive control or fail to ensure informed consent.

In C.S. v. R.H.¹, a New York court included $110+ million in irrevocable trusts in the marital estate after finding the husband maintained “unrestricted control” as a “de facto trustee” and had systematically excluded his wife, who lacked independent counsel and relied on assurances the trusts were “just tax shelters.”

Connecticut’s Netter v. Netter² reached a mixed result: while a properly drafted third-party discretionary trust with an independent corporate trustee was protected, self-settled trusts created secretly with marital assets during divorce proceedings were deemed marital property.

For lawyers drafting irrevocable trusts, these cases underscore the importance of using truly independent trustees, avoiding settlor control powers such as appointment and removal authority, ensuring both spouses provide informed consent with separate counsel, and maintaining clear documentation that trusts serve legitimate estate planning purposes rather than asset concealment.

¹2025 N.Y. Slip Op. 51426 (U) (September 8, 2025)
²235 Conn. App. 774 (2025)