In re Trust Created by Nabity, 854 N.W.2d 551

Background

Evelyn A. Nabity and her husband formed a joint trust in 1998 naming Robert and Mark Nabity as successor cotrustees; Evelyn later executed trust amendments in October 2011 naming herself, Patricia, and Elizabeth as cotrustees.
Evelyn executed a 1998 health care power of attorney naming LaVerne (then successor agents Elizabeth and Mary) and later executed additional powers of attorney in 2011 and 2012.
A September–October 2011 neuropsychological evaluation diagnosed Evelyn with moderate dementia of probable Alzheimer’s etiology and found impaired executive function and lack of capacity for complex decisions.
Family conflict over Evelyn’s care led Robert to seek appointment as temporary guardian and conservator and to petition for trust administration to resolve trustee identity; county court consolidated proceedings, held hearings, and received testimony including that Evelyn was confused when signing the 2011 documents.
County court (1) found by clear and convincing evidence Evelyn lacked capacity to execute the October 2011 trust amendments and the 2011–2012 powers of attorney, (2) set aside the 1998 health care POA under Neb. Rev. Stat. § 30-3421(1)(d) based on agents’ failure to act in Evelyn’s best interests, and (3) appointed Robert as permanent guardian and conservator and declared Robert and Mark cotrustees under the original trust.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Evelyn had capacity to execute October 2011 trust amendments	Elizabeth: Evelyn was competent; amendments valid	Robert: Evelyn lacked capacity; amendments invalid	Held: Evelyn lacked capacity; amendments set aside; Robert and Mark are cotrustees
Whether the 2011–2012 powers of attorney revoked the 1998 health care POA	Mary/Elizabeth: subsequent POAs (or agents) should control	Robert: later instruments or agents invalid; 1998 POA not controlling	Held: 2011–2012 instruments were invalid (Evelyn incompetent) and thus did not revoke 1998 POA; court nonetheless set aside 1998 POA under § 30-3421(1)(d) based on agents’ conduct
Whether the 1998 health care POA should be revoked for agent misconduct	Mary/Elizabeth: agents complied with Evelyn’s known wishes; should remain	Robert: agents failed to act in Evelyn’s best interests and disqualified themselves	Held: Court properly revoked 1998 POA — agents failed to provide necessary care and ignored medical advice; revocation under § 30-3421(1)(d) affirmed
Whether permanent guardianship and conservatorship should be appointed and who should serve	Mary: valid POA should preclude guardianship; custody should follow POA	Robert: Evelyn is incapacitated; guardianship/conservatorship necessary; Robert suitable	Held: Permanent guardianship and conservatorship proper (clear and convincing evidence of incapacity and necessity); Robert appointed; challenge to Robert’s selection not addressed on appeal

Key Cases Cited

In re Rolf H. Brennemann Testamentary Trust, 288 Neb. 389 (Neb. 2014) (standard of appellate review in trust administration matters)
In re Conservatorship of Gibilisco, 277 Neb. 465 (Neb. 2009) (standard of review for guardianship and conservatorship proceedings)
In re Trust Created by Hansen, 274 Neb. 199 (Neb. 2007) (questions of law reviewed de novo even when record review applies)
In re Estate of Dueck, 274 Neb. 89 (Neb. 2007) (appellate court defers to trial court factual findings supported by competent evidence)
Cotton v. Ostroski, 250 Neb. 911 (Neb. 1996) (clear and convincing evidence required to set aside instrument for lack of capacity)
In re Interest of Thomas M., 282 Neb. 316 (Neb. 2011) (public interest exception to mootness doctrine)
Holdsworth v. Greenwood Farmers Co-op, 286 Neb. 49 (Neb. 2013) (court may avoid unnecessary analysis beyond case and controversy)