Agnes M. Gassmann Revocable Living Trust v. Reichert
2011 ND 169
| N.D. | 2011Background
- John A. and Agnes Gassmann created identical revocable living trusts to manage their assets.
- In 2001 they deeded farmland to the John Thomas Gassmann LLLP, with 49.5% interests held by each trust and 1% by John T. Gassmann, who farmed the land.
- Article Five, Paragraph 6 provided disposition of LLLP interests among four children’s generation-skipping trusts under Article Ten.
- After the settlors’ deaths a dispute arose whether John T. was entitled to the LLLP or it should be divided equally among four children.
- Wells Fargo Bank petitioned to reform the trusts to reflect the settlors’ intent; the drafting attorney advised a drafting error existed in Paragraph 6(a).
- The district court reformed Paragraph 6(a) to direct the LLLP to John T.’s generation-skipping trust and held John T. would receive the LLLP in addition to a one-fourth residue share; judgments were appealed and remanded for clerical corrections.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the district court properly reform the trusts to reflect the settlors’ intent? | Gassmanns argued no intent supported reform; trusts were unambiguous. | Wells Fargo argued reform was appropriate to conform to intent. | Yes; reform upheld to reflect intended transfer to John T.'s GST. |
| Whether the LLLP interest was to be received off the top or from the residue? | Plaintiffs argued LLLP formed part of John T.’s one-fourth residue share. | Defendants argued LLLP was a separate allocation not within the residue. | LLLP allocated to John T.’s GST, not part of the residue. |
Key Cases Cited
- In re Wolff, 2011 ND 76 (ND Supreme Court 2011) (credibility determinations under clear and convincing evidence are the trial court’s function)
- S.H.B. v. T.A.H., 2010 ND 149 (ND Supreme Court 2010) (credibility determinations preserved; deference to trial court)
- In re A.B., 2009 ND 116 (ND Supreme Court 2009) (credibility determinations; refrain from reweighing evidence)
- Langer v. Pender, 2009 ND 51 (ND Supreme Court 2009) (read contracts and trusts as a whole to give effect to every part)