In re William R. Zutavern Revocable Trust
309 Neb. 542
Neb.2021Background
- William R. Zutavern created a revocable trust in 2008 that, after his death, funded a William R. Zutavern Family Trust (Family Trust) holding Wm. Zutavern Cattle Co. (WZCC) stock; residue passed outright to his wife Meredith.
- The Family Trust directs that, after Meredith’s death, WZCC stock be distributed to William’s children and/or grandchildren who are “then actively involved in the operation and management of WZCC.”
- Shawn (William’s son) and his son Russell allege they fall within that class (Shawn worked on the ranch until terminated in 2017; Russell had been employed there and was later fired) and filed suit seeking trustee removal, an accounting, surcharge, and a temporary injunction to block a proposed ranch sale.
- The district court dismissed for lack of standing, finding Shawn and Russell were not beneficiaries because they were not “actively involved” at the time of Meredith’s death (and alternatively held that under Neb. Rev. Stat. § 30-3855(d) the trustee’s duties ran exclusively to the corporation, WZCC).
- The Nebraska Supreme Court reversed: it held Shawn and Russell are ascertainable beneficiaries with contingent future interests and that § 30-3855(d)’s phrase “other power” should be read in context as referring to testamentary powers (not general corporate powers), so the trustee’s duties are not exclusively owed to WZCC; the case was remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument (Zutavern) | Defendant's Argument (Meredith/WZCC) | Held |
|---|---|---|---|
| Standing / beneficiary status | Shawn and Russell are beneficiaries (children/grandchild class) with contingent future interests under the Family Trust | They are not beneficiaries because they were not "actively involved" in WZCC at the relevant time and thus have only a mere expectancy | Court: They are ascertainable members of the beneficiary class and have standing (contingent future interests) |
| Scope of § 30-3855(d) — "other power" | "Other power" is a testamentary-type power (limited by NUTC context) and does not strip beneficiaries of enforcement rights | "Other power" encompasses corporate powers (e.g., a corporation’s power to control management), so trustee duties run exclusively to WZCC | Court: "Other power" must be read in context as a testamentary-type power; district court erred to import general corporate powers into § 30-3855(d) |
| Trust language ambiguity ("actively involved in the operation and management") | The phrase can be read to include plaintiffs as members of the class | The phrase is unambiguous and excludes plaintiffs because they were terminated before Meredith’s death | Court: The provision is unambiguous as written, but that does not defeat plaintiffs’ contingent-beneficiary status; this issue is moot as to standing |
| Parol evidence / settlor intent & evidentiary exclusion | Plaintiffs sought extrinsic evidence of William’s intent to support injunction | Defendants relied on the Trust’s unambiguous written terms and the Trust’s clause barring oral modification | Court: Parol evidence was properly excluded because the Trust terms are unambiguous and state they may not be changed orally |
Key Cases Cited
- Manon v. Orr, 289 Neb. 484 (Neb. 2014) (discussing beneficiaries’ rights under a revocable trust and limits on standing when settlor retains control)
- Newman v. Liebig, 282 Neb. 609 (Neb. 2011) (ascertainability requirement for beneficiaries from trust instrument)
- In re Estate of Stuchlik, 289 Neb. 673 (Neb. 2014) (NUTC derived from Restatement principles)
- Rafert v. Meyer, 290 Neb. 219 (Neb. 2015) (pleading standards and review of motion to dismiss)
- In re Robert L. McDowell Revocable Trust, 296 Neb. 565 (Neb. 2017) (discussion of power of appointment and related doctrines)
- In re Trust Created by McGregor, 308 Neb. 405 (Neb. 2021) (standards of review for trust-administration matters)