In re Mark K. Eggebrecht Irrevocable Trust, 99-125.
Decision Date | 18 July 2000 |
Docket Number | No. 99-125.,99-125. |
Citation | 4 P.3d 1207,2000 MT 189,300 Mont. 409 |
Parties | In re The MARK K. EGGEBRECHT IRREVOCABLE TRUST Carla Eggebrecht, Alyssa May Eggebrecht and Terry Jean Eggebrecht, Petitioners and Respondents, v. Pauline Eggebrecht and Howard Eggebrecht, Respondents and Appellants. |
Court | Montana Supreme Court |
Robert L. Stephens, Jr., Southside Law Center, Billings, Montana, For Appellants.
Timothy A. Filz, Brown Law Firm, Billings, Montana (Carla Eggebrecht) Damon L. Gannett, Gannett Law Firm, Billings, Montana (Terry Eggebrecht), For Respondents.
¶ 1 The Respondent, Carla Eggebrecht, filed a petition for modification of the Mark K. Eggebrecht Irrevocable Trust in the District Court for the Thirteenth Judicial District in Yellowstone County. Carla sought to modify specific provisions of the trust in order to allow a corporate trustee to be appointed as the sole trustee upon her resignation as a joint trustee. The Appellants, Pauline and Howard Eggebrecht, joint trustee and trust advisor for the trust, respectively, opposed the modifications proposed by Carla. The District Court granted the petition for modification of the trust in order to allow Norwest Trust to be appointed as the corporate successor trustee for the trust. Pauline and Howard appeal the District Court's judgment. We affirm the judgment of the District Court. ¶ 2 The sole issue presented on appeal is whether the District Court erred when it granted the petition to modify the trust.
¶ 3 In March 1988, Mark K. Eggebrecht died and was survived by his wife, Carla, and their two young daughters, Alyssa and Terry. Mark was also survived by his parents, Howard and Pauline Eggebrecht. Carla was appointed the personal representative of Mark's intestate estate. However, shortly after Mark's death, Howard and Pauline sought to have a will, executed ten years prior to Mark's marriage to Carla, admitted to probate. The will left everything to Mark's brother and sisters and purported to disinherit any future spouse. Howard and Pauline additionally filed several creditor's claims against the estate.
¶ 4 Following extensive litigation, Carla, Howard, and Pauline agreed on a stipulation and settlement which was adopted by the District Court on September 4, 1992. As part of the settlement the parties agreed, among other things, to create a trust, known as the Mark K. Eggebrecht Irrevocable Trust. The beneficiaries of the trust were Mark's daughters, Alyssa and Terry. Carla and Pauline were named as joint trustees, and Carla, Pauline, and Howard were appointed as trust advisors.
¶ 5 The purposes of the trust, as set forth in the trust itself, are the following:
¶ 6 The Trust provides for the following powers of the trust advisors:
D. Each Trust Advisor shall have the authority to direct the Trustee with respect to subject matters where acting pursuant to individual authority, or where acting in unanimity with other Trust Advisors who have authority with respect to the same subject matter. The Trustee shall comply with such Trust Advisor's direction....
The trust provides the following duties for Howard in his role as trust advisor:
A. E. Howard Eggebrecht of Billings, Montana, shall serve as Trust Advisor with respect to the Trust's mineral rights and Wendy's and Taco Bell properties during his lifetime.... For all trust assets with respect to which he is Trust Advisor, E. Howard Eggebrecht shall retain the power to control, manage, lease, and operate such assets, in combination with other interests held by him or members of the Eggebrecht family.
The Trust also provides the following powers for Carla and Pauline, as trust advisors: "[Pauline Eggebrecht and Carla Eggebrecht] shall be Trust Advisor[s] with respect to investments (except mineral rights, Taco Bell and Wendy's properties), and change of corporate trustee."
¶ 7 The trust additionally sets forth the duties of Carla and Pauline as the joint trustees:
¶ 8 The trust also contemplated the resignation of a joint trustee:
Each joint Trustee shall have the right to resign as joint Trustee. In the event of resignation, or in the event either joint Trustee named herein dies, declines, ceases, or is otherwise unable to serve as Trustee, the successor Corporate Trustee named herein shall become the sole Trustee of the Trust.
¶ 9 Currently, the trust corpus includes bonds, mineral interests, and a one-eighth interest in two commercial real estate parcels in Billings, Montana, known as the Wendy's and Taco Bell properties. Originally, the Eggebrecht family farm was held by the trust in order to allow completion of a CRP contract. However, pursuant to an option agreement which was part of the original stipulation and settlement, following completion of the CRP contract, the farm was transferred to Howard and Pauline in exchange for the one-eighth interest in the Taco Bell and Wendy's properties.
¶ 10 Following the creation of the trust in 1993, there were no requests by Carla for any distributions from the trust until 1996. In 1996, Alyssa experienced some emotional and medical problems and was treated at a special school for girls in Utah. On January 8, 1996, Carla wrote a letter to Pauline and requested a distribution from the trust in order to cover three-months' tuition for Alyssa:
My health insurance will cover through this January of 1996. I have one month of health account funds to cover February tuition. I am working on VA benefits to see if I can get coverage through their provision for residential treatment. I would like to be able to have a distribution from the trust to cover her stay at Cross Creek Manor from March through May. I am asking you to please consider allowing this distribution for Alyssa. She has truly benefitted from this program and has finally found some joy in being who she is.
¶ 11 Pauline wrote the following response on February 16, 1996:
As you can plainly see, we cannot get into situations like this. We have little money and many years to take care of her financial needs. We have to be very careful as to how we use this money or we will find ourselves without any means to take care of these needs. This would be very poor judgement on our part and very careless in distributing her money.... As you may conclude, I will not agree to taking this money out of the trust.
¶ 12 Subsequently, Carla wrote Pauline requesting a distribution from the trust for specific items for the girls, including dental care, chiropractic services, driver's education training, car insurance and SAT test preparation. Pauline denied this request as well, with the following response:
As for her [Alyssa's] other requests, drivers training, $315.00, dental $274.13, insurance on the car, $730.90 and SAT, $240.00, these are common expenses incurred by all families.... The expenses for Terry, $315.00 for drivers training and $615.00 for Chiropractic services are also expenses incurred by a family. You will from time to time have a balance owing on a medical bill.
¶ 13 Following the denial of all of her requested distributions from the trust, Carla's attorney at that time, Gilbert Burdett, contacted TrustCorp, the named corporate successor trustee in the trust document, to determine whether it would accept appointment as trustee. TrustCorp responded by letter stating that it would only serve as trustee if certain modifications were made to the trust, including the elimination of the trust advisor roles.
¶ 14 Carla's present attorney, Timothy Fils, then contacted Norwest Investment Management to determine whether Norwest would serve as the corporate trustee. Fils received a response similar to TrustCorp's, which stated that Norwest would only serve as the corporate trustee if certain modifications were made to the trust, including elimination of the trust advisor role.
¶ 15 On April 14, 1998, Carla filed a petition to modify the trust, in which she stated her intention to resign as a joint trustee. Carla attached a modified version of the...
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