In re William R. Zutavern Revocable Trust, 309 Neb. 542

Background

William R. Zutavern established a revocable trust that, at his death, funded a Family Trust holding Wm. Zutavern Cattle Co. (WZCC) stock; the Family Trust directs that upon Meredith’s death the trustee distribute WZCC stock to "those of my children and/or grandchildren who are then actively involved in the operation and management of WZCC."
Shawn (William’s son) and Russell (Shawn’s son) allege they qualify as beneficiaries (contingent on being "actively involved") and that Meredith, as trustee, has mismanaged Family Trust assets, failed to account, and intends to sell the ranch for her own benefit.
Shawn and Russell sued for trustee removal, accounting, surcharge, and injunctive relief to stop a sale; they also filed related derivative and contract suits against WZCC and its directors.
The district court dismissed the trust action, concluding Shawn and Russell lacked standing (not beneficiaries because they were terminated from ranch employment in 2017) and alternatively holding that under Neb. Rev. Stat. § 30-3855(d) the trustee’s duties were owed exclusively to WZCC (interpreting "other power" to include corporate powers).
The Nebraska Supreme Court reversed: it held Shawn and Russell are ascertainable contingent beneficiaries with standing, rejected the district court’s broad reading of § 30-3855(d) to incorporate general corporate powers, and remanded for further proceedings (including reconsideration of the injunction on the merits).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing / beneficiary status	Shawn & Russell: named class members (child/grandchild) with contingent future interest as "actively involved" and thus have standing to sue the trustee	Meredith et al.: they do not qualify as beneficiaries because they were not "actively involved" at the relevant time; therefore lack standing	Reversed — Shawn and Russell are ascertainable contingent beneficiaries under the NUTC and have standing to sue the trustee
Scope of § 30-3855(d) ("other power") and to whom trustee duties are owed	Shawn & Russell: "other power" should be read in context with testamentary powers (e.g., power of appointment), not as importing corporate powers; trustee duties are owed to beneficiaries	Meredith et al.: "other power" includes corporate powers (e.g., a corporation’s power to determine management), so trustee duties are owed exclusively to WZCC	Reversed — "other power" construed in context to mean testamentary powers; district court erred to treat trustee duties as owed exclusively to WZCC
Ambiguity of the Family Trust phrase "actively involved in the operation and management of WZCC"	Shawn & Russell: terms could be ambiguous and subject to extrinsic evidence to show intent	Meredith et al.: terms are clear and unambiguous; no parol evidence allowed	Affirmed as to ambiguity — court found the clause unambiguous; class definition stands (assignment of error moot because beneficiaries established)
Exclusion of settlor’s/parol evidence and temporary injunction denial	Shawn & Russell: district court improperly excluded evidence of William’s intent and wrongly denied injunction	Meredith et al.: Trust is unambiguous and bars oral modification; exclusion was proper; injunction denied for lack of standing	Court affirmed exclusion of parol evidence (Trust unambiguous) and remanded injunction for merits review since standing exists

Key Cases Cited

Manon v. Orr, 289 Neb. 484, 856 N.W.2d 106 (2014) (addressed standing and rights in revocable trusts while settlor alive)
Rafert v. Meyer, 290 Neb. 219, 859 N.W.2d 332 (2015) (discussed strict fiduciary duty and duty of loyalty for trustees)
Newman v. Liebig, 282 Neb. 609, 810 N.W.2d 408 (2011) (ascertainability requirement for beneficiaries)
In re Trust Created by McGregor, 308 Neb. 405, 954 N.W.2d 612 (2021) (recent trust-administration precedent; standard of review)
In re Trust of Cook, 28 Neb. App. 624, 947 N.W.2d 870 (2020) (trust-administration principles cited)
In re Estate of Stuchlik, 289 Neb. 673, 857 N.W.2d 57 (2014) (NUTC statutory background and interpretation)
In re Estate of Hedke, 278 Neb. 727, 775 N.W.2d 13 (2009) (fiduciary duties and trust policy considerations)