In re William R. Zutavern Revocable Trust
309 Neb. 542
| Neb. | 2021Background
- William R. Zutavern created a revocable trust in 2008; upon his death the trust funded a William R. Zutavern Family Trust that held Wm. Zutavern Cattle Co. (WZCC) stock.
- The Family Trust directs that, after Meredith (surviving spouse) dies, WZCC stock be distributed to "those of my children and/or grandchildren who are [then] actively involved in the operation and management of [WZCC]."
- Shawn (a son) and his son Russell alleged they qualify under that class, claimed Meredith (trustee) breached fiduciary duties (including possible sale of ranch and failure to account), and sought removal, accounting, surcharge, and an injunction to block sale.
- The district court dismissed, ruling Shawn and Russell lacked standing because they were not beneficiaries (they had been terminated from ranch employment in 2017) and alternatively held § 30-3855(d) meant Meredith’s duties were owed exclusively to WZCC.
- The Nebraska Supreme Court reversed: it held Shawn and Russell are ascertainable beneficiaries with contingent future interests and that the district court misread § 30-3855(d); the case was remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing: Are Shawn & Russell beneficiaries with standing to sue the trustee? | They are members of the definite class (children/grandchildren actively involved) and thus have a future contingent beneficial interest. | They were not "actively involved" at the relevant time and thus are not beneficiaries; therefore no standing. | Court: Shawn & Russell are ascertainable beneficiaries with contingent future interests and have standing. |
| Interpretation of § 30-3855(d): Does "other power" include corporate powers (so trustee owes duties exclusively to the corporation)? | "Other power" is a testamentary-type power; it does not encompass general corporate powers under the NMBCA. | The district court/defendants read "other power" broadly to include corporate authority to determine who manages/operates the corporation, making trustee duties owed to WZCC. | Court: "Other power" must be read in context with testamentary powers (e.g., power of appointment); it does not sweep in general corporate powers. The district court erred. |
| Trust language ambiguity: Is the phrase "actively involved in the operation and management of WZCC" ambiguous? | Plaintiffs urged ambiguity to admit extrinsic evidence supporting beneficiary status. | Defendants argued language is clear and excludes Shawn & Russell. | Court: Provision is unambiguous; meaning is clear (members of class must be actively managing/operating WZCC at Meredith's death). This did not defeat plaintiffs’ status as contingent beneficiaries. |
| Exclusion of extrinsic (parol) evidence re settlor intent and denial of temporary injunction | Plaintiffs relied on extrinsic evidence on settlor intent and sought a temporary injunction to block sale. | Defendants contended parol evidence was barred and injunction lacked foundation absent standing. | Court: Parol evidence was properly excluded because the trust language is unambiguous; injunction denial must be reconsidered on remand now that plaintiffs have standing. |
Key Cases Cited
- Manon v. Orr, 289 Neb. 484 (Neb. 2014) (revocable-trust standing principles; distinguished on facts)
- Newman v. Liebig, 282 Neb. 609 (Neb. 2011) (beneficiary ascertainability requirement)
- Rafert v. Meyer, 290 Neb. 219 (Neb. 2015) (pleading standard and review on dismissal)
- In re Trust Created by McGregor, 308 Neb. 405 (Neb. 2021) (standards for appellate review of trust matters)
- In re Estate of Stuchlik, 289 Neb. 673 (Neb. 2014) (fiduciary duties and trustee obligations)
- In re Trust Created by Cease, 267 Neb. 753 (Neb. 2004) (determination of ambiguity in trust instruments)