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In re Wilson

Supreme Court of Nebraska

July 13, 2018

In re Henry B. Wilson, Jr., Revocable Trust Dated June 27, 2002.
v.
Roger A. Wilson and Roseannnn M. Wilson, Cotrustees of the Henry B. Wilson, Jr., Revocable Trust Dated June 27, 2002, appellees. Lou Annnn Godinging, appellant,

         1. Trusts: Equity: Appeal and Error. Absent an equity question, an appellate court reviews trust administration matters for error appearing on the record; but where an equity question is presented, appellate review of that issue is de novo on the record.

         2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

         3. Decedents' Estates: Trusts: Equity: Appeal and Error. The removal of a trustee is a question of equity, and therefore an appellate court reviews de novo the question of whether a trustee was properly removed.

         4. Pleadings. The issues in a given case will generally be limited to those which are pled. 5. Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.

         6. Courts: Judgments: Appeal and Error. Upon further review from a judgment of the Nebraska Court of Appeals, the Nebraska Supreme Court will not reverse a judgment which it deems to be correct simply because its reasoning differs from that employed by the Court of Appeals.

          Petition for further review from the Court of Appeals, Moore. Chief Judge, and Riedmann and Bishop, Judges, on appeal [300 Neb. 456] thereto from the County Court for Sherman County, Tami K. Schendt, Judge. Judgment of Court of Appeals affirmed.

          Nicole Seckman Jilek, Robert M. Schartz, and Thomas J. Malicki, of Abrahams, Kaslow & Cassman, L.L.P., and, on brief, Jeffrey J. Blumel, for appellant.

          Larry W. Beucke, of Parker, Grossart, Bahensky, Beucke, Bowman & Symington, L.L.P., and Sheila A. Bentzen and Anthony M. Aerts, of Rembolt Ludtke, L.L.P, for appellees.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and Papik, JJ., and Vaughan, District Judge.

          Funke, J.

         This matter concerns the administration of the "Henry B. Wilson, Jr., Revocable Trust Dated June 27, 2002" (Henry's Trust or Trust), and the related issue of the administration of three subtrusts created by Henry's Trust upon his death. Henry B. Wilson, Jr.'s daughter, Lou Ann Goding (Lou Ann), filed suit, asserting the mismanagement of Henry's Trust, and following a trial, the county court for Sherman County removed the cotrustees of Henry's Trust. Lou Ann appealed, asserting several errors, including that the county court failed to remove the cotrustees of her subtrust.

         In a memorandum opinion, the Nebraska Court of Appeals interpreted the county court's order to have removed the cotrustees of Lou Ann's subtrust and concluded that there was no error in need of correction.[1] Upon further review, we determine the Court of Appeals erred in interpreting the county court's order to have removed the cotrustees of the subtrusts. However, our ultimate conclusion on the judgment is the same. Therefore, although our reasoning differs from that of the Court of Appeals, we affirm.

         [300 Neb. 457] BACKGROUND

         Henry died on December 23, 2010. He was preceded in death by his wife, Eleanor Wilson, and was survived by three adult children, Lou Ann, Roseann Wilson, and Roger Wilson. During their lifetimes, Henry and Eleanor created an estate plan which included revocable trusts and pour-over wills. After Henry's death, Roseann and Roger were named successor cotrustees of Henry's Trust and copersonal representatives of Henry's estate.

         The documents for Henry's Trust and Eleanor's trust provided that upon the death of the last surviving spouse, real property interests within each trust were to be distributed to three separate and unequal subtrusts in the name of each of their children: the "Lou Ann Goding Trust," the "Roger A. Wilson Trust," and the "Roseann M. Wilson Trust." Henry's Trust and Eleanor's trust also distributed the residue of their respective trusts in equal shares to their three children. The three separate and unequal subtrusts had identical language regarding trust management. In relevant part, the instructions for the Lou Ann Goding Trust directed the trustee of the sub-trust, "Until the death of my said daughter, LOUANN [sic] GODING, the trustee shall pay the net income from the trust in convenient installments (at least annually) to my said daughter so long as my said daughter shall live."

         At the time of Henry's death, Henry's Trust owned approximately 4, 200 acres of land. In accordance with the Trust's language, in December 2011, the successor trustees transferred real estate previously owned by Henry's Trust and Eleanor's trust to the three subtrusts. However, no other steps were taken to administer the three subtrusts, such as opening separate bank accounts, obtaining federal tax identification numbers, or filing tax returns. The cotrustees continued to operate Henry's Trust for convenience as opposed to separately operating the subtrusts.

         An estate proceeding was opened in county court to address assets that were not identified in Henry's Trust, did not have [300 Neb. 458] a beneficiary, or were not payable on death to the Trust. An estate inventory was filed on December 28, 2011, and an inheritance tax worksheet and receipt were all signed "right at the end of December." According to the attorney who prepared Henry's estate plan and drafted Henry's will and Henry's Trust, the estate was ready to close at that point, but it had not been closed because of the pending litigation.

         In separate cases, Lou Ann filed petitions for the removal of Roseann and Roger as copersonal representatives of Henry's estate and cotrustees of Henry's Trust, and the matters were consolidated for trial.

         County Court

         In the trust case, the county court concluded that Roseann and Roger had breached their fiduciary duties as cotrustees of Henry's Trust, under Neb. Rev. Stat. § 30-3875 (Reissue 2016), by failing to keep accurate records, commingling assets, and not keeping the cotrustees' property separate from Henry's Trust property. The court also found the cotrustees breached their fiduciary duties under Neb. Rev. Stat. § 30-3878 (Reissue 2016) by failing to keep beneficiaries of the Trust reasonably informed about the administration of the Trust and of the material facts necessary for them to protect their interests. Finally, the county court determined the cotrustees breached their fiduciary duties by ...


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