Agnes M. Grassmann Revocable Living Trust v. Reichert

802 N.W.2D 889 (2011)

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Nature of the Case

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Facts

John and Agnes were married and had four children, John T. Gassmann, Mary Reichert, Jo Anne Dalhoff, and James Gassmann. John and Agnes executed separate, identical revocable living trusts to manage their assets. In 2001, they deeded some of their farmland to a limited liability limited partnership with each of their respective trusts holding a 49.5 percent partnership interest and their son, John T., who farmed the land, holding a one percent partnership interest. On death, the following dispositions were made: If John T. Gassmann, survives then to the Trustee, and successors in trust, and if John T. does not survive then handled for the benefit of his descendants. If John T. nor any of his descendants survive, then it shall become a part of the residue of the trust estate. Paragraph 2 of Article Ten created generation skipping trusts for each of their four children. Under Paragraph 1 of Article Ten, upon John A. and Agnes's deaths, the residue of their trust estates would be divided into equal shares for their four children and distributed to their respective generation skipping trusts. John and Agnes died. A dispute arose whether John T. was entitled to receive the farmland or whether it was to be distributed equally among the four children. The Trusts (P) petitioned the district court for an order clarifying and reforming the terms of the trusts. The attorney who drafted the trusts alleged that there was a mistake in drafting the trusts, and that Paragraph 6(a) of Article Five, rather than providing that the settlor's interest in the LLLP was to be distributed to 'my Trustee,' should have provided that the interest was to be distributed to 'the Trustee of the John T. Gassmann Generation Skipping Trust.' Ds argued that the trusts unambiguously provided that the interests in the LLLP were to be distributed equally to the four children's generation skipping trusts under Article Ten, or in the alternative, the interests in the LLLP should pass to John T.'s generation skipping trust but be considered part of his one-fourth share in the residue of the trust assets. The district court held there was clear and convincing evidence it was the intent of John and Agnes that John T. would receive all of the LLLP. It ordered reformation wherein John T. was to receive the interests in the LLLP in addition to a one-fourth interest in the remaining residue of the trusts. Ds appealed.