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

Background

William R. Zutavern created a revocable trust that, at his death, funded a William R. Zutavern Family Trust (Family Trust) holding WZCC stock; remainder assets went to his wife Meredith for life and then distribution per Family Trust terms.
The Family Trust directs that, on Meredith’s death, 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 (William’s son) and Russell (grandson) allege they worked on the ranch (Shawn until 2017), were wrongfully removed/terminated, and that Meredith (as trustee and WZCC officer) has mismanaged assets, failed to account, and plans an improper sale of the ranch.
Shawn and Russell filed for removal of Meredith as trustee, an accounting, surcharge, and sought a temporary injunction to enjoin any sale; defendants moved to dismiss for lack of standing and failure to state a claim.
The district court dismissed, holding Shawn and Russell lacked standing because they were not “actively involved” at the relevant time and alternatively holding § 30-3855(d) made trustee duties owed exclusively to the corporation.
The Nebraska Supreme Court reversed: it held Shawn and Russell are (contingent) beneficiaries with standing, rejected the district court’s statutory interpretation that corporate powers displaced trustee duties to beneficiaries, and remanded for further proceedings.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing/Beneficiary status	Shawn and Russell are beneficiaries (contingent future interest) under the Family Trust class (children/grandchildren) and thus may sue	They are not beneficiaries because they were not "actively involved" in WZCC at relevant time and thus lack standing	Held for plaintiffs: class-membership language makes them ascertainable contingent beneficiaries with standing to sue under § 30-3862(a)
Meaning of § 30-3855(d) — to whom trustee owes duties	§ 30-3855(d) should not be read to let corporate powers extinguish trustee duties to beneficiaries	§ 30-3855(d) "other power" includes corporate powers (e.g., control over management) so trustee’s duties are owed to corporation	Held for plaintiffs: "other power" must be read in context as referring to testamentary-type powers; district court erred in applying corporate-power theory
Ambiguity of Trust phrase "actively involved in the operation and management of WZCC"	Phrase could be ambiguous and construed in plaintiffs’ favor to establish beneficiary status	Phrase is plain; plaintiffs fail to allege facts showing the required involvement at Meredith’s death	Held for defendants on ambiguity point: clause is unambiguous, but that does not defeat plaintiffs’ contingent-beneficiary status — assignment of error on ambiguity is moot
Exclusion of extrinsic evidence of settlor's intent	Parol evidence was needed to show settlor’s intent and support injunction	Trust language is unambiguous and forbids oral modification; parol evidence properly excluded	Held for defendants: parol evidence properly excluded because the Trust is unambiguous and cannot be orally changed

Key Cases Cited

Manon v. Orr, 289 Neb. 484, 856 N.W.2d 106 (2014) (revocable-trust context where beneficiaries lacked standing because settlor retained control; distinguished here)
Newman v. Liebig, 282 Neb. 609, 810 N.W.2d 408 (2011) (beneficiaries must be ascertainable from the instrument)
Rafert v. Meyer, 290 Neb. 219, 859 N.W.2d 332 (2015) (standards for reviewing a motion to dismiss)
In re Trust Created by McGregor, 308 Neb. 405, 954 N.W.2d 612 (2021) (standard of review for trust administration matters)
In re Estate of Stuchlik, 289 Neb. 673, 857 N.W.2d 57 (2014) (discussing fiduciary duties under the NUTC and trust law)
In re Trust Created by Cease, 267 Neb. 753, 677 N.W.2d 495 (2004) (ambiguity in trust instruments is a question of law)