Discretionary Trusts in a Divorce with Mackenzie Ralstin | Episode 240

Discretionary Trusts in Divorce: What Is Actually Protected?

In this episode of Divorce at Altitude, Ryan Kalamaya is joined by associate attorney McKenzie Ralston to discuss discretionary trusts and how they are treated in Colorado divorce cases. Many people believe that assets held in a trust are “bulletproof” and completely protected from division—but as Ryan and McKenzie explain, that is not always the case. The episode explores when trusts are protected, when they may be considered property, and how trust distributions can still impact child support and spousal maintenance.

Guest Information

McKenzie Ralston is an associate attorney at Kalamaya Goscha with a background in estate planning and tax law. She earned both her Juris Doctor and a Master’s in Tax from the University of Denver Sturm College of Law. McKenzie brings a unique perspective to family law by focusing on the intersection of divorce, trusts, and estate planning, helping clients understand how wealth structures like trusts are treated in divorce proceedings.

Episode Highlights

Why people think trusts are “bulletproof”
Ryan explains that many clients come into divorce believing that if assets are in a trust, they are automatically protected. While this is sometimes true, it depends heavily on the type of trust and how it is structured.

What is a discretionary trust?
McKenzie breaks down discretionary trusts as trusts where the trustee has full discretion over whether to make distributions to the beneficiary. This means the beneficiary does not have a guaranteed right to receive money.

Revocable vs. irrevocable trusts
Revocable trusts can be changed or revoked by the person who created them and are generally not considered property in divorce. Irrevocable trusts, on the other hand, cannot be changed and may raise more complex issues.

When a trust becomes property in divorce
The episode highlights that not all trusts are protected. If a beneficiary has a guaranteed right to receive assets—such as in certain remainder interests—those assets may be considered property under Colorado law.

The Balanson case and why it matters
Ryan and McKenzie discuss In re Marriage of Balanson, a key Colorado case that established that even a future interest in a trust can be considered property if it cannot be withheld.

What is Divorce at Altitude?

Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.

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DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.