In re Trust of Shire
299 Neb. 25
| Neb. | 2018Background
- Jennie Shire’s 1947 will created an irrevocable trust providing $500/month to her daughter Ruth for life, then to granddaughter Shirley Gronin; residue to other beneficiaries after survivor’s death.
- Gronin (the lifetime beneficiary) sought increased monthly distributions from trustee Wells Fargo, citing inflation and current needs; trustee petitioned county court to modify trust terms.
- Trustee identified known residuary beneficiaries and the court appointed counsel to represent any unknown/undiscovered heirs; some known beneficiaries consented, others did not affirmatively consent, and counsel for unknown heirs opposed.
- County court denied modification under Neb. Rev. Stat. § 30-3837(b) and (e), finding lack of unanimous beneficiary consent and that nonconsenting beneficiaries’ interests would not be adequately protected; § 30-3838 inapplicable.
- Gronin appealed; Nebraska Supreme Court reviewed de novo statutory interpretation and affirmed the denial of modification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 30-3837(b) permits modification absent unanimous, affirmative consent when known beneficiaries do not object after notice | Gronin/Wells Fargo: nonobjection by known beneficiaries should suffice; common-interest representation can bind unknown beneficiaries | Unknown beneficiaries: plain text requires consent of all beneficiaries; court-appointed representative’s objection controls | Held: § 30-3837(b) requires affirmative consent of all beneficiaries; unknown beneficiaries’ consent issues governed by §§ 30-3825–30-3826 and court-appointed representative’s objection precluded modification |
| Whether § 30-3837(e) allows modification over nonconsenting beneficiaries if their interests are "adequately protected" | Gronin/Wells Fargo: "adequately" means sufficient; slowing growth without touching principal should be allowed; avoid absurd results | Unknown beneficiaries: any increase prejudices future growth; "adequately protected" should impose strong protection against prejudice | Held: "adequately protected" incorporates Restatement-style safeguards; court must determine modification will not affect nonconsenting interests and impose protections; here, increased payments would impair residuary interests, so requirement not met |
| Whether modification could be justified under § 30-3838 (unanticipated circumstances) | Gronin/Wells Fargo: trial court analysis under § 30-3838 supported relief; common-law deviation should apply | Unknown beneficiaries: § 30-3838 did not apply; trial court did not address common-law deviation | Held: § 30-3838 inapplicable (trust predates UTC effective date); common-law deviation not raised/decided below, so not considered on appeal |
| Whether trustee could rely on comments or legislative history to allow broader modification or representation | Gronin/Wells Fargo: UTC comments and Nebraska enactment notes support flexible representation and common-interest aggregation | Unknown beneficiaries: statutory text controls; legislative history not incorporated where statute is unambiguous | Held: Court incorporated UTC comments where Legislature referenced them; but Nebraska’s comments document is legislative history and not incorporated; statutory text and §§ 30-3825–30-3826 govern representation and consent issues |
Key Cases Cited
- In re Estate of Radford, 297 Neb. 748 (de novo review of trust administration)
- Gillpatrick v. Sabatka-Rine, 297 Neb. 880 (statutory language given plain meaning)
- Doe v. McCoy, 297 Neb. 321 (statutory construction and when legislative history may be considered)
- Wayne L. Ryan Revocable Trust v. Ryan, 297 Neb. 761 (procedural rule on issues not presented below)
- Tadros v. City of Omaha, 273 Neb. 935 (construction limiting statutes that alter common-law rights)
- In re Family Trust Created Under Akerlund Trust, 280 Neb. 89 (respecting settlor intent as cardinal rule of trust construction)