Matter of John T. Gassmann Trust, 2017 ND 232

John T. Gassmann died in 2012; under a generation‑skipping trust created by his parents he held a testamentary special power of appointment over trust assets (real estate and residue), but could not appoint in favor of himself, his estate, or his estate's creditors.
In 2011 Gassmann exercised that special power by will and a revocable trust, directing real property to a Valley Township Land Trust and the residue (including Canadian mineral shares) to a Canadian Mineral Share Trust; Oakland (his only child) is a primary beneficiary of the mineral trust but not the land trust.
Oakland contested the will and related documents (alleging insane delusion); those challenges were rejected at trial and affirmed on appeal.
Bell Bank, as trustee of the generation‑skipping trust, petitioned to approve accounting, distribute assets per the appointment, and terminate the trust; Bell Bank sought permission to liquidate the mineral shares to help pay outstanding trust liabilities and loans the trust made to the estate and to Bell Bank.
Oakland objected at the termination hearing, arguing (1) Gassmann’s exercise of the power of appointment was invalid because appointed trusts exposed assets to estate creditors, and (2) Bell Bank breached its fiduciary duty of impartiality by seeking to liquidate mineral assets that would disproportionately burden mineral‑trust beneficiaries. The district court approved the petition and denied Oakland’s post‑judgment relief; this appeal followed.

Issue	Oakland’s Argument	Bell Bank’s Argument	Held
Validity of Gassmann’s exercise of the special power of appointment	The appointment was invalid because assets were directed to trusts accessible to pay estate debts/creditors, contrary to the generation‑skipping trust’s prohibition.	Res judicata: Oakland could and should have raised this challenge in her prior will/probate litigation; she had multiple prior opportunities.	Court: Res judicata bars Oakland’s challenge; she could have raised the issue in earlier proceedings and may not relitigate it now.
Trustee’s duty of impartiality (breach claim)	It is inequitable to liquidate mineral trust assets to pay trust liabilities because that disproportionately penalizes mineral beneficiaries (including Oakland) for litigation she pursued in good faith.	Trustee must protect trust assets and defend claims; litigation was necessary to defend the trust and estate, and liquidating the modest mineral assets to partially pay liabilities is equitable under the circumstances.	Court: No clear error in approving trustee’s petition; implicit finding Bell Bank did not breach fiduciary duty of impartiality given trustee’s duty to preserve assets and defend claims and the record showing liabilities incurred defending prior litigation.

SNAPS Holding Co. v. Leach, 895 N.W.2d 763 (N.D. 2017) (res judicata prevents relitigation of claims that were or could have been raised earlier)
Lucas v. Porter, 755 N.W.2d 88 (N.D. 2008) (res judicata principles and claim preclusion among same parties/privities)
Red River Wings, Inc. v. Hoot, 751 N.W.2d 206 (N.D. 2008) (breach of fiduciary duty is a factual finding reviewed for clear error)
North Dakota Pub. Serv. Comm’n v. Valley Farmers Bean Ass’n, 365 N.W.2d 528 (N.D. 1985) (trustee must act impartially among beneficiaries but also protect and preserve trust assets and defend against claims)
Carlson v. Carlson, 802 N.W.2d 436 (N.D. 2011) (appellate review requires findings of fact that disclose the trial court’s reasoning)
State v. Horning, 882 N.W.2d 247 (N.D. 2016) (findings are adequate if they enable appellate court to understand the trial court’s rationale)