Trust Of Shire v. Unknown/Undiscovered Heirs

907 N.W.2d 263 (2018)

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Nature of the Case

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Facts

A Trust was created by the last will and testament of Shire, which provided that the Trust would be funded with $125,000 and that the trustees would pay $500 monthly to Shire's daughter, Ruth Banner Gronin (Ruth), during her life and to Shire's granddaughter, Gronin, upon Ruth's death and Gronin's attaining the age of 25 years. Upon the death of the survivor of Ruth and Gronin, the balance of the trust fund was to be added to the residue of the estate and be distributed, as provided in Paragraph VI. Gronin was born in 1945. Shire died in 1948. After Ruth passed away in 1983, the monthly $500 payments from the Trust were made to Gronin. Gronin was also receiving monthly payments of $564 from Social Security and $88.38 from a casino pension plan. Her total monthly income was $1,152.38. She had two bank accounts, each with a negligible balance. As of September 26, 2016, the Trust had a principal balance of $981,874.58. P testified that the expected annual return for the rust, before fees and taxes, ranged from 6.40 percent to 8.10 percent. The Trust could expect income and appreciation from $64,000 and $81,000 annually. The present value of a $500 payment in 1948 would be between $4,997 or $5,400.29 today. P attempted to identify potential heirs of the beneficiaries identified in paragraph VI of Shire's will. It identified 12 individuals and entities that may have an interest in the residuary and requested the court to notify them of the proceeding. Six individual beneficiaries participated by counsel, one individual beneficiary participated pro se, and the Nebraska Attorney General's office participated on behalf of charitable beneficiaries. At P's request, the court appointed an attorney to represent the 'Unknown/Undiscovered Heirs,' if any, of the beneficiaries under paragraph VI of Shire's will. Counsel for the unknown beneficiaries was the only party that opposed P's motion. The court ruled that the requested modification of the trust was not warranted. It held that the plain language of the Trust did not permit an increased distribution; §30-3837(b) did not authorize a modification, because not all beneficiaries had consented; §30-3837(e) did not permit a modification, because increasing Gronin's annual payments would have a detrimental effect on the Trust's residue, which would not adequately protect the nonconsenting beneficiaries; and § 30-3838 did not allow a modification, because there was not an unanticipated change in circumstances. Gronin filed a timely appeal. Gronin and P argue that the only beneficiaries that count are those who are known. If they consent the modification should be allowed. The unknown beneficiaries argue that the plain language of § 30-3837(b) requires the consent of all beneficiaries and does not permit a commonality of interest representation for unknown beneficiaries.