In the Matter of Trust T-1 of Mary Faye Trimble, Judith R. Cunningham, Trustee
2013 Iowa Sup. LEXIS 8
| Iowa | 2013Background
- Revocable trust created by Mary Faye Trimble on Sept. 29, 1999; Trimble was sole trustee and beneficiary during life, with no prior accounting obligation to beneficiaries.
- Trimble substituted Judith Cunningham as trustee effective April 8, 2009; Trimble remained alive and managed trust assets until June 2009.
- Marylynn Miller, a beneficiary, requested an accounting from April 8, 2009, to present, including predeath period; Cunningham refused.
- After Trimble’s death on Dec. 16, 2009, Miller sought accounting for the predeath period; probate court ordered accounting and fee allocations.
- Probate court held Cunningham personally liable for substantial fees under Iowa Code section 633A.4507, and ordered trust to bear most fees; Miller and Wibe (temporary administrator) were awarded or sought fees.
- This Iowa Supreme Court review reverses the accounting duty for the predeath period and reverses the fee-shifting order, remanding for trust-funded payment of fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trustee must account for the predeath period. | Miller contends beneficiaries have rights to predeath accounting. | Cunningham argues duties run to settlor during revocation, not beneficiaries. | Accounting not owed for predeath period; duties run to settlor while revocable. |
| Interpretation of sections 633A.3103 and 633A.4213. | Statutes allow postdeath accounting for revocable-period gaps. | Duties to settlor exclude beneficiaries during revocable period. | Settlor-only duties control; no beneficiary accounting for revocable period post-death. |
| Attorneys’ fees allocation under section 633A.4507. | Miller seeks fees, and court should award from trust where appropriate. | Fees should be allocated using justice and equity, considering various Atwood-style factors. | Probate court abused discretion; trust, not Cunningham personally, should pay most fees; Miller bears her own; Wibe’s fees paid by trust; Cunningham’s appellate fees to be paid by trust. |
| Role of temporary administrator’s fees. | Wibe’s fees should be paid by the trust. |
Key Cases Cited
- In re Estate of Myers, 825 N.W.2d 1 (Iowa 2012) (standard for reviewing equity-based probate orders; de novo review of statutory interpretation and fee awards)
- Hoelscher v. Sandage, 462 N.W.2d 289 (Iowa Ct. App. 1990) (beneficiaries lack standing to challenge cotrustee actions while trust revocable)
- In re Trust of Willcockson, 368 N.W.2d 198 (Iowa Ct. App. 1985) (beneficiary lacking standing when settlor’s interest contingent; revocable period duties limited)
- In re Stephen M. Gunther Revocable Living Trust, 350 S.W.3d 44 (Mo. Ct. App. 2011) (trustee owes duties to settlor during revocable period; no predeath accounting to beneficiaries)
- In re Estate of Giraldin, 290 P.3d 199 (Cal. 2012) (debate over standing of beneficiaries post-settlor’s death; distinguishable from Iowa facts)
- Atwood v. Atwood, 25 P.3d 936 (Okla. Civ. App. 2001) (factors for ‘justice and equity’ in fee allocations; prevailing party concept)
- Garwood v. Garwood, 233 P.3d 977 (Wyo. 2010) (fee allocations under similar statutes; Atwood-inspired factors)