In Re Steinberg Family Living Trust David L. Steinberg v. Steven C. Steinberg
894 N.W.2d 463
| Iowa | 2017Background
- Jack and Clarine Steinberg created an irrevocable family living trust naming sons David and Steven as sole beneficiaries; trust became irrevocable on Clarine’s 2013 death.
- At death the trust held two parcels: an Iowa 40‑acre parcel specifically devised to David and an 80‑acre Minnesota parcel acquired in 2008 (not specifically devised).
- In 2008 the trust sold a Winnebago County, Iowa parcel (which had been specifically devised to Steven) and acquired the Minnesota parcel in a like‑kind tax exchange.
- Steven claimed the Minnesota parcel was a replacement for the Winnebago parcel and therefore belonged to him; David argued the Winnebago bequest adeemed and the Minnesota parcel is part of the residue to be split equally.
- The district court held the Winnebago bequest was adeemed, ordered the Minnesota parcel split 50/50 under the residuary clause, and struck/limited Steven’s purchase option concerning the Iowa parcel; David moved for summary judgment and prevailed below.
- The Iowa Supreme Court affirmed ademption and equal split of the Minnesota parcel, declined to adopt the UPC ademption rule, but reversed the grant of summary judgment on the Iowa parcel option as ambiguous and remanded for trial on extrinsic evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the specific bequest of the Winnebago (Iowa) parcel adeemed when the trust sold it and acquired the Minnesota parcel in a like‑kind exchange | David: Sale was voluntary; bequest adeemed; Minnesota parcel is residuary property to be split under Art.5.C | Steven: Minnesota parcel is replacement property for the specifically devised Winnebago parcel and should pass to him | Court: Winnebago bequest adeemed; Minnesota parcel falls into residuary and is split equally between David and Steven |
| Whether Iowa should adopt UPC §2‑606(a)(5) (replacement‑property rule for ademption) | David: Iowa should not adopt UPC provision; existing Iowa ademption doctrine controls | Steven: Iowa should adopt UPC §2‑606 to avoid harsh results and allow replacement property to pass to specific devisee | Court: Declined to adopt UPC §2‑606; applied Iowa precedent (identity/modified‑intention approach) and denied replacement‑property rule |
| Interpretation of Article 5.B(1) option re Iowa parcel: does clause give Steven a purchase right at $1500/acre or only a rental right at that price? | David: The Iowa parcel was an absolute devise to David; the $1500/acre term limits only rental, not purchase; the purchase option is void/inoperative | Steven: The provision grants an express purchase option (or at least is ambiguous); he should be able to purchase under its terms | Court: Provision is ambiguous as to scope (purchase at $1500/acre vs. rental only); summary judgment improper; remand for trial to consider extrinsic evidence |
| Whether summary judgment was proper on disputed trust provision | David: No genuine issue of material fact; language suffices to grant summary judgment | Steven: Ambiguity exists and extrinsic evidence should be considered; triable issues remain | Court: Summary judgment improper on the option clause; genuine factual dispute; remanded for trial |
Key Cases Cited
- In re Estate of Anton, 731 N.W.2d 19 (Iowa 2007) (surveyed Iowa ademption law and modified‑intention approach)
- In re Estate of Wolfe, 208 N.W.2d 923 (Iowa 1973) (addressed replacement/exchange issues in ademption context)
- In re Estate of Bierstedt, 119 N.W.2d 234 (Iowa 1963) (applied modified‑intention test where incompetence barred ademption)
- In re Estate of Sprague, 57 N.W.2d 212 (Iowa 1953) (held ademption where property disposition removed specific devise)
- In re Estate of Keeler, 282 N.W. 362 (Iowa 1938) (found specific bequest adeemed and not replaceable by later acquired property)