Siegfried v. Barger (In Re Estate of Barger), 303 Neb. 817

Background

Joan Barger executed a 2006 will that disposed of her property at death, included a residual clause (Art. III) distributing non-trust property equally to four children, specific distributions of trust property (Art. IV) by exercising a purported power of appointment, and a no-contest clause (Art. V) voiding gifts to anyone who contests the will.
The Barger Family Irrevocable Trust (1991) was purportedly terminated in July 2006 by a majority of trustees (Joseph and Steven) and Joan, and a court dismissed a related trust challenge in 2006, finding the trust effectively terminated.
After Joan’s 2012 death, William filed a will contest alleging lack of testamentary capacity and undue influence by Steven; William, Elizabeth, Joseph, and Brendon financed and participated in the contest litigation; the county court admitted the 2006 will to probate and the Court of Appeals affirmed.
Elizabeth later petitioned (2016) to construe the 2006 will, arguing that because the trust had been terminated before Joan’s death the former trust assets belonged to Joan and therefore should pass under Art. III (residual clause) rather than Art. IV (trust-specific bequests).
Steven and Shane cross-petitioned to exclude Elizabeth, Joseph, and Brendon from inheriting under the will under Art. V (no-contest clause) for their role in the 2012 contest. The county court found the trust had been terminated but concluded Joan intended the Article IV distributions to apply regardless and found probable cause existed for the 2012 will contest, so the challengers were not barred.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did Article V’s no-contest clause bar Elizabeth, Joseph, and Brendon from taking because they aided the 2012 will contest?	Appellees: aided participants should be barred under Art. V.	Appellants: they did not file the petition; some were only supporters.	Court: They aided/participated but probable cause for the contest existed, so Art. V is unenforceable as to them.
Was there probable cause to bring the 2012 will contest (undue influence/capacity)?	Contestants: facts (multiple wills, Joan’s frailty, Steven’s dominance, attorney discomfort, lopsided gifts) supported probable cause.	Estate proponents: insufficient proof of undue influence; trial court already admitted will.	Court: Sufficient evidence existed such that a reasonable, informed person could conclude the challenge had substantial likelihood of success.
Was the Barger Family Irrevocable Trust terminated before Joan’s death so its assets reverted to Joan individually?	Elizabeth: yes; trustees and Joan agreed to terminate in 2006 and the court dismissed, so the trust terminated and assets reverted to Joan.	Steven: trustees did not actually transfer assets out of trust, so trust continued and Art. IV operated as exercise of power of appointment.	Court: Trust termination was effective in 2006; termination makes it trustees’ duty to wind up, and Joan did not hold appointment power at death.
If the trust terminated, should the property formerly described as trust property be distributed under Art. III (residuary) or Art. IV (specific trust-based bequests)?	Elizabeth: terminated trust property reverted to Joan and thus falls into Art. III residual distribution.	Steven: Art. IV was Joan’s exercise of appointment and should control distribution of those items.	Court: Latent ambiguity existed; extrinsic evidence showed Joan intended the Art. IV distributions regardless of trust status, so Art. IV controls.

Key Cases Cited

In re Estate of Etmund, 297 Neb. 455 (probable-cause / will-contest context)
Martin v. Ullsperger, 284 Neb. 526 (no-contest clause and indirect participation principles)
McKinney v. Okoye, 287 Neb. 261 (definition of probable cause in civil context)
In re Estate of Clinger, 292 Neb. 237 (undue-influence proof and inferences)
In re Estate of Hedke, 278 Neb. 727 (trust wind-up duties and termination timing)
In re Estate of Odenreider, 286 Neb. 480 (wills speak at death / ambulatory nature of wills)
Burnett v. Maddocks, 294 Neb. 152 (rules on construing testator intent and will interpretation)
In re Estate of Mousel, 271 Neb. 628 (latent ambiguity and admissibility of extrinsic evidence)
Kluver v. Deaver, 271 Neb. 595 (use of extrinsic evidence to resolve latent ambiguities)
In re Estate of Bernstrauch, 210 Neb. 135 (extrinsic evidence to disclose/remove latent ambiguity)