Nielsen v. Nielsen

• Citation: 93 Idaho 419,462 P.2d 512
• Decision Date: 11 December 1969
• Docket Number: No. 10379,10379
• Parties: , 39 A.L.R.3d 1281 Lou Jean NIELSEN, Plaintiff-Appellant, v. Christian E. NIELSEN, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 512

462 P.2d 512

93 Idaho 419, 39 A.L.R.3d 1281

Lou Jean NIELSEN, Plaintiff-Appellant, v. Christian E. NIELSEN, Defendant-Respondent.

No. 10379.

Supreme Court of Idaho.

Dec. 11, 1969.

Sharp, Anderson & Bush, Idaho Falls, for appellant.

Jones & Jones, Boise, for appellee.

SHEPARD, Justice.

The principal question presented for decision is: May payments from a trust established by paternal grandparents for the benefit of minor children excuse the father's nonpayment of child support required of him by the terms of a divorce decree?

The principal facts in the case at bar are not in dispute. The parties hereto were married and there were born of that marriage three children, all of whom are still under the age of majority. The parties were separated for a considerable time prior to the commencement of the divorce action by plaintiff. The defendant did not appear in the divorce action and a default and decree of divorce were entered on November 5, 1956. Therein the plaintiff-wife was awarded the custody of the children and the defendant ordered to pay child support in the amount of $120.00 per month.

Prior to the entry of the divorce decree the parents of the defendant, Evald and Ina Nielsen, on July 18, 1956, established a trust in which they had placed real property and corporate stock certificates. No specific valuation of that property originally placed in the trust is shown in the record. The trust donors provided by their wills that additional personal property should pour over into the trust upon their deaths. Both donors are now deceased, the pour-over provisions of their wills have been effectuated, and it appears that the present total amount of the trust corpus is in excess of $200,000.00.

The purpose of the trust is recited therein as:

'The remainder of the net income-if any-shall be used as the trustee deems prudent for the benefit of Lougean Nielsen (plaintiff-appellant herein) and the children born to her and the donor's son, Chris E. Nielsen, whether such children have now been born or are hereafter born, and in the event such income is not sufficient to provide said Lougean Nielsen and the children with the necessities of life, or in the event of some emergency which in judgment of the trustee would require additional money for said children, to sell a part of the property herein held by said trustee in the trust fund and to continue to distribute the income until said children reach the age of 25 years respectively. * * * 'Fourth-When the youngest of the said children shall have reached the age of 25 yrs., the trustee shall divide the said trust fund, including any accumulated income thereon, into as many equal parts as there may then be living children and deceased children leaving descendants then surviving of the marriage of said Lougean Nielsen and Chris E. Nielsen, and to pay over and deliver one of such equal shares to each of said living children and to divide among the descendants their divisional shares hereunder per stirpes and not per capita.'

The said trust agreement further provides that the:

'* * * said trustee shall at all times be governed by what it believes to be for the best interests of the said children, and if the said house is of no further use to the mother and children for their personal dwelling house, then said trustee shall have the right and power to sell the same and retain the funds from said sale in the trust funds for the use and benefit of the said children along with the other trust funds.' (Emphasis supplied.)

At the show cause hearing in 1968, there was admitted into evidence, over the objection of plaintiff-appellant, a letter dated December 31, 1957, written by Evald Nielsen to the trustee, which stated:

'Idaho First National Bank

Boise, Idaho

Attention: Trust Department

'Gentlemen:

'My attorney, Fred H. Snook of Salmon, Idaho, has recently prepared a will for me in which I have directed that an undivided one-third of my property be added to the trust fund which I have heretofore set up with you in the name of Lujean Nielsen for the use and benefit of the children of my son, Evald Nielsen, Jr., and the said Lujean Nielsen. My son and Lujean are no longer married to each other and I want it definitely understood and the purpose of this letter is to instruct you that in the event of her subsequent marriage, that none of the money set up in said trust account is to be used for the benefit of the new husband or any of the children of the new husband and Lujean Nieslsen, but instead is at all times to be used exclusively for the support, maintenance and education of the children of Evald Nielsen, Jr., and Lujean Nielsen.

Very truly yours,

Evald Nielsen'

It is undisputed that the defendant-respondent, father of the children, has never paid any monies for child support pursuant to the divorce decree. It was established that as of June, 1968, the defendant was then employed and earning at least $10,500.00 a year. He is also the beneficiary of a trust fund established by his parents which he will receive in approximately two years. The corpus of that trust is approximately $50,000.00.

On May 24, 1957, plaintiff-appellant initiated a show cause proceeding against the defendant-respondent requiring him to appear and show cause before the district court why he should not be held in contempt for failing and refusing to obey that portion of the divorce decree requiring him to pay child support. At that time the donors of the trust, Evald and Ina Nielsen, were traveling in Europe. At the hearing thereon both parties were represented by counsel and the testimony of the defendant was taken. The record does not, however, reveal the content of that testimony. Following the hearing the district judge entered an order finding that the defendant was not in contempt of court and continuing the case. From that order of the court no appeal was perfected and the attempt of the plaintiff-appellant to collect the child support was evidently abandoned.

The father and mother of the defendant-respondent (Evald and Ina Nielsen) are now deceased, having died on July 9, 1963 and September 20, 1966, respectively. On February 8, 1967, plaintiff-appellant instituted this action for an order to show cause why the defendant should not be held in contempt for failure to pay child support under the provisions of the divorce decree. Following a hearing thereon, the district court entered its findings of fact, conclusions of law, and supplemental judgment. That court in effect found and concluded that the trust established by the parents of the defendant-respondent deprived the defendant of an anticipated personal inheritance which he otherwise could have expected from the estate of his parents; that the payments to the plaintiff-appellant from the trust fund were in excess of the amount required by the divorce decree to be paid by defendant for child support; and that the defendant was released of the duty to support the children to the extent of the monies received from the trust.

From the findings, conclusions and decision of the district court plaintiff-appellant appeals assigning them as error. Plaintiff-appellant also assigns error in the admission of the letter from Evald Nielsen to the trustee. At the hearing testimony was admitted, over objection, to the effect that the trust was set up by the paternal grandparents for the purpose of discharging the defendant's obligation for child support as contained in the divorce decree. That testimony took the form of conversations between the witnesses and Evald and Ina Nielsen purporting to show their intent in establishing the trust. Plaintiff-appellant assigns error in the admission of such testimony.

The testimony at the hearing, although not uncontroverted, tends to indicate that the real property held in trust consisted of an apartment complex. Plaintiff-appellant and the children occupy one of the apartments free of any rent or other obligation, except minor maintenance. The plaintiff-appellant managed the apartment complex and received the rental income from the other apartments without the necessity of paying anything except minor maintenance. The income, taken together with the rent-free occupation of one of the units, and the cash payments made by the trust directly to the plaintiff, exceeded the $120.00 per month child support payments. For the past two years all rentals received from the real property are paid directly to the trustee, who in turn pays $250.00 per month to plaintiff-appellant. There was further testimony, supported by vouchers, that plaintiff-appellant received in excess of $7,000.00 cash, plus at least two automobiles, as gifts from the paternal grandparents of the children between the time of the divorce and the death of the grandparents. Plaintiff-appellant is able to and does work, although the record does not disclose her income therefrom.

We point out at his time that the question involved in the case at bar is relatively narrow. Although there is a question ancillary to a trust involved in this case, there is, however, no quarrel among any of the parties to the trust; there is no assertion of wrongdoing on the part of the trustee; there is no assertion of nonpayment of money to the beneficiaries; there is no question as to who are the beneficiaries of the trust; there is no dispute between the various beneficiaries of the trust; there is no dispute as to the amount of the corpus nor the amount of the income from the trust nor the payment of income to any of the beneficiaries. In short, the sole question relating to the trust which is presented to us for decision is: What was the intent of the donors when they established the trust and when they added to the corpus of the trust?

We consider first the assignment of error relating to the admission in evidence of the letter written by Evald Nielsen to the trustee purportedly indicating his intent in the initial establishment of the trust and...