## Facts

- Charles Dahl and Kim Dahl were married for nearly eighteen years and had two children.
- Charles was a practicing cardiologist; Kim had a master’s degree, had worked before marriage, and primarily cared for the children during the marriage.
- In 2002, a Dahl Family Irrevocable Trust was created, with marital assets transferred into it; the trust instrument selected Nevada law and was structured to protect assets.
- Charles filed for divorce in Utah on October 24, 2006; the litigation was highly contentious, with significant discovery disputes.
- After a lengthy bench trial, the district court awarded Charles sole legal and physical custody, denied Kim alimony, divided the marital estate excluding trust assets, and denied Kim attorney fees.
- Kim filed a separate action seeking a declaration that trust assets were marital property; the district court granted summary judgment against her, treating the trust as outside the marital estate.
- Kim appealed both the divorce decree and the trust judgment; the Utah Supreme Court consolidated the appeals.

## Issues

1. Whether the trust was a necessary party that should have been joined in the divorce action for proper adjudication of the marital estate.
2. Whether Nevada law (per the trust’s choice-of-law clause) or Utah law governed questions of revocability and enforceable interests in the trust.
3. Whether, under the applicable law, the trust was revocable and whether Kim had a settlor’s right to withdraw her contributed share of marital property.
4. Whether the district court committed reversible error in the divorce case regarding alleged judicial bias, evidentiary exclusions, denial of alimony, custody, and attorney fees.
5. Whether the marital property division required reversal and remand in light of the treatment of trust assets.

## Decision

- The Utah Supreme Court consolidated the divorce and trust appeals for purposes of appeal and remand.
- The court held that the trust should have been joined as a party to the divorce action and that adjudicating trust property separately was improper.
- The court refused to apply Nevada law where doing so would contravene Utah public policy; it applied Utah law to questions of trust revocability and interests.
- Applying Utah law, the court held the trust was revocable as a matter of law and that Kim, as a settlor as to her contributed marital property, was entitled to withdraw her share.
- In the divorce action, the court rejected the judicial-bias claim and affirmed the district court’s evidentiary rulings, denial of alimony, custody award to Charles, and denial of attorney fees to Kim.
- The court affirmed in part and reversed and remanded in part the marital property division to account for joinder and the inclusion and treatment of trust assets.

## Legal Principles

- A trust holding property alleged to be part of the marital estate may be a required party to a divorce action when its absence would prevent complete and consistent adjudication of property rights.
- A contractual choice-of-law clause in a trust will not be enforced when application of the chosen law would violate the forum state’s public policy, particularly in domestic-relations property division.
- Under Utah law, a trust labeled “irrevocable” may be treated as revocable when the settlor retains or is treated as having rights inconsistent with true irrevocability, allowing the settlor (and related claims in divorce) to reach contributed property.
- A spouse who is a settlor as to marital property transferred into a trust may have an enforceable right to withdraw that contributed share, affecting equitable distribution in divorce.
- Appellate review of custody, alimony, evidentiary rulings, and attorney-fee determinations in divorce is deferential; procedural noncompliance in disclosures and expert-related requirements can justify exclusion of evidence and denial of related relief.

## Conclusion

The Utah Supreme Court required that the trust be joined in the divorce, applied Utah law on public-policy grounds despite a Nevada choice-of-law clause, treated the trust as revocable, and recognized the wife’s right to withdraw her contributed marital share, while otherwise affirming the trial court’s custody, alimony, evidentiary, and fee rulings and remanding for revised property division consistent with the trust holdings.


Dahl v. Dahl, 2015 UT 23 (Utah 2015)