Matthew Larson Trust Agreement
831 N.W.2d 388
| N.D. | 2013Background
- Clairmonts created two trusts for Matthew Larson: Trust I (1996) and Trust II (2009), both irrevocable with distributions planned at/after Matthew’s 65; Trust I included a general power of appointment; Trust II mirrored Trust I but with slightly different death provisions.
- Matthew Larson died in 2011 at age 25 with no will or issue; his death triggered residual provisions in Trust I and II.
- Greg Larson (Matthew’s father) had children from a second marriage (N.J.L. and L.M.L.), which Clairmonts did not want to benefit from the trusts.
- Clairmonts sought district court interpretation and reform to limit beneficiaries to their lineal descendants; Greg Larson challenged, arguing the trusts could include half-blood relatives under North Dakota intestate rules.
- District court held that Greg’s children were beneficiaries under NDCC § 30.1-04-07 and denied reform; court found no mistake of law or fact supporting reformation.
- Clairmonts appeal; the Supreme Court held the district court misapplied the law, and reformation of Trust I and II is warranted to limit benefits to Clairmonts’ lineal descendants only.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reformation is available to conform trusts to settlors’ intent | Clairmonts assert clear-and convincing evidence of a mistake of law affected terms and intent. | Larson argues no mistake of law under contract-based standards; insist no reform. | Reformation allowed under NDCC 59-12-15; mistake of law may support reform. |
| Whether misapplication of contract-law standards invalidated reform | Clairmonts contend district court applied contract principles, not trust reform standards. | Respondent contends courts should follow contract-law precedents. | District court misapplied contract-law; reform may proceed under trust reform standards. |
| Whether the term 'brothers and sisters' includes half-blood relatives | Clairmonts believed term referred only to Clairmont-line descendants; half-blood siblings were not intended. | Respondent argues statute N.D.C.C. § 30.1-04-07 makes half-bloods eligible. | Under correct law, ‘brothers and sisters’ includes half-bloods; reform to exclude them warranted if intended. |
| Whether clear-and-convincing evidence supports the Clairmonts’ intent and mistake in expression | Clairmonts assert extrinsic evidence shows intent to limit to lineal descendants. | Larson contends no sufficient extrinsic showing of intent and mistake. | Evidence supports intent to limit to lineal Clairmont descendants; mistake of law found; reform granted. |
| Whether remand for findings is required to support reform | Court should remand for proper findings under correct law. | No remand necessary if record supports reform. | Court remanded to effect reformation consistent with decision; require proper fact-finding. |
Key Cases Cited
- In re Estate of Samuelson, 2008 ND 190 (ND) (legal questions on reviewability and intent in estate matters)
- Agnes M. Gassmann Revocable Living Trust v. Reichert, 2011 ND 169 (ND) (review of trust reform with clear and convincing standard)
- In re Disciplinary Action Against McGuire, 2004 ND 171 (ND) (clear and convincing standard for reform decisions)
- In re Estate of Paulson, 2012 ND 40 (ND) (Uniform Trust Code influence and reform principles)
- Langer v. Pender, 2009 ND 51 (ND) (trust interpretation vs. reform distinction)