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In re Trust Created by Nabity

Supreme Court of Nebraska

September 26, 2014

IN RE TRUST CREATED BY LAVERNE D. NABITY AND EVELYN A. NABITY, GRANTORS. ROBERT D. NABITY AND MARK L. NABITY, APPELLEES,
v.
ELIZABETH A. RUBEK, APPELLANT. IN RE GUARDIANSHIP AND CONSERVATORSHIP OF EVELYN A. NABITY. ROBERT D. NABITY, APPELLEE,
v.
MARY C. ROSE, APPELLANT

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[Copyrighted Material Omitted]

Page 553

Appeals from the County Court for Douglas County: DARRYL R. LOWE, Judge.

Lawrence K. Sheehan, of Ellick, Jones, Buelt, Blazek & Longo, L.L.P., and, on brief, Nick Halbur, of Thompson Law Office, P.C., L.L.O., for appellants.

Lisa M. Line, of Brodkey, Peebles, Belmont & Line, L.L.P., for appellees.

HEAVICAN, C.J., WRIGHT, CONNNNOLLY, STEPHAN, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.

OPINION

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[289 Neb. 165] Wright, J.

I. NATURE OF CASE

These consolidated appeals arise from proceedings involving the appointment of a guardian and conservator for Evelyn A. Nabity and the administration of a trust established for her care. In the appeal from the trust administration proceeding, the issue presented is whether Evelyn was competent to execute amendments to the trust agreement which changed the identity of the trustees. We find that there was clear and convincing evidence that Evelyn was incompetent to execute those amendments, and we affirm the order setting them aside. In the other appeal, we consider whether the appointment of a permanent guardian and conservator for Evelyn denied her the benefit of a valid health care power of attorney. We conclude that it did not, and we affirm the order setting aside the 1998 health care power of attorney and appointing a permanent guardian and conservator for Evelyn.

II. SCOPE OF REVIEW

Absent an equity question, an appellate court reviews trust administration matters for error appearing on the record. In re Rolf H. Brennemann Testamentary Trust, 288 Neb. 389, 849 N.W.2d 458 (2014).

An appellate court reviews guardianship and conservatorship proceedings for error appearing on the record made in the county court. In re Conservatorship of Gibilisco, 277 Neb. 465, 763 N.W.2d 71 (2009). When reviewing a

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judgment for errors appearing on the record, an appellate court's inquiry is whether the decision conforms to the law, is supported by [289 Neb. 166] competent evidence, and is neither arbitrary, capricious, nor unreasonable. Id.

In instances when an appellate court is required to review cases for error appearing on the record, questions of law are nonetheless reviewed de novo on the record. In re Trust Created by Hansen, 274 Neb. 199, 739 N.W.2d 170 (2007). An appellate court, in reviewing a judgment for errors appearing on the record, will not substitute its factual findings for those of the trial court when competent evidence supports those findings. In re Estate of Dueck, 274 Neb. 89, 736 N.W.2d 720 (2007).

III. FACTS

Evelyn is a resident of Omaha, Nebraska. She has 11 living children: Elizabeth A. Rubek (Elizabeth); Robert D. Nabity; Gerald P. Nabity; Mark L. Nabity; Dwayne J. Nabity; Katherine M. Wells; Patricia J. Krehoff, now known as Patricia J. Brock (Patricia); Philip J. Nabity; Cynthia A. Ray (Cynthia); Sandra M. Burrows; and Mary C. Nabity, now known as Mary C. Rose (Mary). Evelyn's husband, LaVerne D. Nabity, passed away in 2004.

1. Creation of Trust

In September 1998, LaVerne and Evelyn formed the LaVerne D. Nabity and Evelyn A. Nabity Trust. LaVerne and Evelyn were designated as trustees. The trust agreement provided that if one of them became unable or unwilling to serve as trustee, " the remaining Trustee shall temporarily serve as the Trustee. Until a successor Trustee is appointed, the remaining Trustee may take any action or exercise any power granted to the Trustee . . . ." The surviving original trustee had the power to appoint a successor trustee to act as cotrustee.

The trust agreement provided that Robert and Mark were to serve as successor cotrustees. They were to become trustees " when there is no acting trustee or when the trustee is unable or unwilling to act." There is no indication that Evelyn appointed Robert and Mark to serve as her cotrustees after LaVerne died.

[289 Neb. 167] 2. 1998 Health Care Power Of Attorney

In September 1998, in addition to forming the trust, Evelyn executed a health care power of attorney. The document named LaVerne as Evelyn's attorney in fact for health care and Elizabeth and Mary as successor attorneys in fact for health care. It did not nominate anyone to serve as guardian in the event that one was later appointed.

3. 2011 Neuropsychological Evaluation and Powers of Attorney

In 1999, Evelyn was diagnosed with " mild memory impairment." By late 2010 and early 2011, her children started noticing a decline in her mental and physical condition.

On September 30, 2011, Dr. Nadia Pare, a clinical neuropsychologist, performed an examination of Evelyn to determine her " medical and financial capacity." During the examination, Evelyn did not know the date or the day of the week, was " repetitious in conversation," " show[ed] slowness in thinking," and had " difficulty with more complex tasks" meant to show " concrete thinking processes." The examination revealed that Evelyn suffered from impairments to multiple mental processes, including " working memory" and " executive functioning (including poor reasoning and problem solving, insight, concrete thinking, and impulsivity)."

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On October 3, 2011, Pare diagnosed Evelyn with " dementia of probable Alzheimer's disease etiology" with a " moderate level of severity." Pare opined that Evelyn did not have the capacity to " make complex medical decisions" or decide whether she should remain in her home. Pare also noted that Evelyn was " unable to define the concept of power of attorney" and " confus[ed] this concept with a lawyer or a trust, despite being re-explained the question." Pare recommended that Evelyn's family pursue a conservatorship and a health care power of attorney.

In response to Pare's recommendations, Patricia downloaded a durable general power of attorney from the Internet and took Evelyn to execute it before a notary. This power of attorney, [289 Neb. 168] signed on October 3, 2011, named Patricia and Elizabeth as joint agents.

On October 10, 2011, Evelyn executed yet another durable general power of attorney and a health care power of attorney. Both documents were prepared by her attorney and executed before a notary. The durable general power of attorney named Patricia and Elizabeth as Evelyn's attorneys in fact and gave them " full power to act or to omit to act regarding [her] estate or [her] person." The document specifically granted the power to name a guardian or conservator for Evelyn, but it did not require the attorneys in fact to nominate any particular individual. The health care power of attorney named Elizabeth and Mary as Evelyn's attorneys in fact for health care. The document did not nominate anyone to serve as guardian in the event that one was later appointed.

4. Amendment of Trust

Evelyn also executed amendments to the original trust agreement on October 10, 2011. The amendments identified Evelyn, Patricia, and Elizabeth as cotrustees and removed the provision designating Robert and Mark as successor trustees. The amendments were signed by Evelyn as " grantor" and by Evelyn, Patricia, and Elizabeth, allegedly as cotrustees. Since the trust agreement was amended, Patricia and Elizabeth have not taken over the duties of cotrustees.

5. 2012 Health Care Power of Attorney

On January 20, 2012, Evelyn executed a third health care power of attorney. The document named Mary as Evelyn's attorney in fact for health care and Elizabeth as an alternate agent. It differed from the prior powers of attorney in that it nominated the attorney in fact for health care to serve as Evelyn's guardian in the event a guardian was later appointed.

At the time Evelyn executed this health care power of attorney, her attorney believed Evelyn was competent to do so, because Evelyn " understood what she was signing and was willing to do so." Evelyn's attorney knew that Evelyn experienced " some confusion" but was not aware that Evelyn had [289 Neb. 169] been diagnosed with dementia or Alzheimer's disease. After the document was executed, Evelyn's attorney learned about the October 2011 neuropsychological evaluation.

6. Family Dispute

In the following months, a family dispute developed over Evelyn's care. Some of Evelyn's children, including Robert, did not feel that Mary was keeping the other children informed of their mother's condition. Evelyn's attorney attempted to facilitate communication between the children, to no avail, and on June 6, 2012, she recommended that the children engage in mediation, which did not occur.

In early June 2012, Mary took Evelyn to stay with her in Illinois. Evelyn believed she was going there for a 2-week vacation, and Mary represented to Evelyn's other ...


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