Estate of Calvin, 963 N.W.2d 319

The Ben W. Calvin Trust (1955, Michigan) named John C. Calvin as lifetime income beneficiary and his children as remainder beneficiaries; Section I gave the Trustee broad discretion to allocate between income and principal and to make payments for the beneficiaries' "use and benefit."
Section II directed payment of the Trust’s net income to John during his life and division of principal among his children at his death.
Between 2009–2019 John requested and received disbursements of principal (allegedly $50,000–$92,000 annually) and periodic income distributions; appellants (his children) allege John fraudulently induced the Trustee to make improper principal payments despite his substantial personal assets.
After John’s 2019 death, his children filed a creditor claim against his estate seeking damages for depletion of Trust principal; the Personal Representative disallowed the claim and moved to dismiss, arguing the Trustee (not the children) is the real party in interest and that the Trust authorized the payments.
The circuit court granted the motion to dismiss, concluding the Trust granted the Trustee discretion to pay principal; the South Dakota Supreme Court affirmed, but on the independent ground that the children lacked standing as real parties in interest because they failed to show the Trustee was unable, unavailable, or unwilling to sue.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Trust authorized principal disbursements to John	Section II (pay net income in life; divide principal at death) shows settlor intended only income for John; principal payments were improper	Section I grants Trustee discretion to allocate between income and principal and to make payments for beneficiaries’ use and benefit	Not reached by the Supreme Court (circuit court had held Trustee had discretion; Supreme Court affirmed dismissal on standing grounds)
Whether appellants are the real parties in interest / have standing	Children were harmed by depletion of principal and can sue the Estate to remedy the harm	Trustee is the real party in interest for claims on behalf of the Trust; beneficiaries may sue only if Trustee is unable, unavailable, unsuitable, or improperly failing to protect the trust	Held for defendant: appellants lack standing; they did not show the Trustee refused or was unable to bring the claim, so they are not real parties in interest
Whether part of the claim is time-barred by statute of limitations	Some payments fall within limitations and claim should proceed	Payments before the limitations cutoff are barred	Not addressed by the Supreme Court (case resolved on standing)

Fodness v. City of Sioux Falls, 947 N.W.2d 619 (S.D. 2020) (standard of review for motion to dismiss)
Mordhorst v. Dakota Truck Underwriters & Risk Admin. Servs., 886 N.W.2d 322 (S.D. 2016) (pleading rules and deference on motion to dismiss)
In re Florence Y. Wallbaum Revocable Living Trust Agreement, 813 N.W.2d 111 (S.D. 2012) (standing and real-party-in-interest discussion)
Saks v. Damon Raike & Co., 8 Cal. Rptr. 2d 869 (Cal. Ct. App. 1992) (trustee is the proper party to bring actions on behalf of an express trust)
Naier v. Beckenstein, 27 A.3d 104 (Conn. App. Ct. 2011) (trustee as party to protect trust interests)
Browning v. Brunt, 195 A.3d 1123 (Conn. 2018) (beneficiary must show trustee improperly refuses or neglects to bring action to invoke exception)
Oldham-Ramona Sch. Dist. No. 39-5 v. Jensen, 503 N.W.2d 260 (S.D. 1993) (appellate affirmance permissible on alternative grounds)
Strassburg v. Citizens State Bank, 581 N.W.2d 510 (S.D. 1998) (definition and elements of fraud)
Benson v. State, 710 N.W.2d 131 (S.D. 2006) (standing reviewed de novo)
Cable v. Union Cnty. Bd. of Cnty. Comm’rs, 769 N.W.2d 817 (S.D. 2009) (standing as a threshold jurisdictional question)