In re Conservatorship of Abbott, 295 Neb. 510

Background

Marcia Abbott created a revocable Survivor’s Trust and an irrevocable Family Trust; Marcia was primary income beneficiary and had limited powers; Russell and Cynthia were contingent beneficiaries.
Marcia had a stroke in 2011, required skilled care, and appointed her son Mark as successor trustee for certain accounts; Mark also acted under a power of attorney and managed trust assets, making transfers and signing documents as “Trustee.”
Russell and Cynthia sued to remove Mark as successor trustee, surcharge him, and obtain an accounting; Marcia resigned as trustee before trial and later died while appeals were pending.
The county court found Mark breached several fiduciary duties, removed him as successor trustee, appointed a replacement, awarded Russell and Cynthia reduced attorney fees for the trust case, and denied their fees in the conservatorship case.
On appeal the Nebraska Supreme Court dismissed the appeal challenging the conservator appointment as moot (Marcia’s death), affirmed the removal of Mark as trustee after de novo review, upheld the fee rulings for abuse-of-discretion review, and found any evidentiary error harmless.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Mootness of conservatorship appeal	Cross-appellants argued conservatorship relief remains reviewable	Appellants argued appeal should be remanded/dismissed due to death	Appeal of conservator appointment dismissed as moot; other trust claims survive
Standing to remove trustee	Russell & Cynthia: as contingent beneficiaries they may seek removal	Mark: owed duties only to settlor (Marcia) under §30-3855, so siblings lack standing	Russell & Cynthia had standing under §30-3862(a) as beneficiaries with contingent interests
Whether Mark owed fiduciary duties under Family Trust	Plaintiffs: Family Trust created present enforceable interests; Mark owed duties and breached them	Mark: argued limited power of appointment and actions as POA meant no duties to siblings	Court held beneficiaries had present interests; Mark owed duties to Russell & Cynthia and breached duty of impartiality; removal affirmed
Removal standard / breach sufficiency	Plaintiffs: hostile conduct and preferential conduct justified removal	Mark: disputed breach and standing; disputed scope of pleadings	Single serious breach (impartiality) warranted removal; pleadings gave fair notice; removal affirmed on de novo review
Attorney fees awards	Plaintiffs: sought ~ $139k fees and costs for both trust and conservatorship	Mark: argued fees inappropriate or should not be paid from trust	Trial court exercise of discretion affirmed; trust fees reduced, conservatorship fees denied; trustee reimbursement denied
Exclusion of evidence	Mark: excluded e-mail and contact log showed plaintiffs’ improper motives and contradicted claims	Plaintiffs: failure to produce and limited relevance justified exclusion	Even if exclusion erred, it was harmless; did not affect substantial rights

Key Cases Cited

In re Conservatorship of Franke, 292 Neb. 912 (Neb. 2016) (conservatorship mootness and review principles)
In re Trust Created by Hansen, 274 Neb. 199 (Neb. 2007) (beneficiary interests and trust interpretation)
In re Guardianship & Conservatorship of Karin P., 271 Neb. 917 (Neb. 2006) (standing and guardianship/conservatorship standards)
Rafert v. Meyer, 290 Neb. 219 (Neb. 2015) (trustee duties and administration under Nebraska Uniform Trust Code)
In re Estate of Stuchlik, 289 Neb. 673 (Neb. 2014) (trustee impartiality and removal where hostility interferes with trust administration)
Flores v. Flores-Guerrero, 290 Neb. 248 (Neb. 2015) (appellate scope and unnecessary analysis)