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In re Trusteeship of the Trust Created Under Trust Agreement dated December 31

February 03, 2004

IN THE MATTER OF THE TRUSTEESHIP OF THE TRUST CREATED UNDER TRUST AGREEMENT DATED DECEMBER 31, 1974; AND
IN THE MATTER OF THE TRUSTEESHIP OF THE TRUST CREATED UNDER TRUST AGREEMENT DATED DECEMBER 30, 1980; AND
IN THE MATTER OF THE TRUST CREATED UNDER TRUST AGREEMENT DATED DECEMBER 30, 1980.



Hennepin County District Court File Nos. C6-91-166, C9-91-159, C5-91-160

Considered and decided by Halbrooks , Presiding Judge, Kalitowski , Judge, and Stoneburner , Judge.

SYLLABUS BY THE COURT

Minn. Stat. § 501B.16(3), (4) (2002), which authorizes trustees to petition the district court for an order determining trust beneficiaries and interpret trust terms, does not authorize trustees to mount a collateral attack on a beneficiary's previously determined paternity without regard for the standing and timeliness requirements of applicable parentage laws.

The opinion of the court was delivered by: Halbrooks, Judge

Reversed

OPINION

Respondent trustees brought a petition pursuant to Minn. Stat. § 501B.16 (2002), requesting the district court to determine beneficiaries and interpret terms of three trusts created by settlor JHM. Appellants, JHM's ex-wife PAM and the children born to her during her marriage to JHM (the younger children), challenge the district court's interpretation of trust language determining the beneficiaries of the trusts. Appellants argue that the district court erred by (1) interpreting the subject trusts as limiting beneficiaries to JHM's biological children and (2) concluding that relevant portions of the applicable parentage act did not conclusively establish the biological paternity of the younger children, thereby precluding any subsequent paternity challenge brought by respondent trustees. By notice of review, respondent beneficiaries challenge the district court's conclusion that it lacked personal jurisdiction over the younger children and could not therefore compel them to undergo genetic testing.

We conclude that Minn. Stat. § 501B.16 does not authorize trustees to challenge a previous determination of paternity made consistent with applicable parentage laws, and that the trustees here may not challenge the younger children's paternity in the context of their trust-clarification action. We further conclude that were such a challenge authorized by section 510B.16, it would nonetheless be unavailable to respondent trustees here because of their failure to comply with the standing and timeliness requirements of applicable parentage laws.

FACTS

In 1974, JHM created an irrevocable trust (the 1974 Trust), the primary beneficiaries of which were his "issue," defined in the trust as "all persons who are descended from [JHM], either by legitimate birth to or legal adoption by him or any of his legitimately born or legally adopted descendants." The 1974 trust authorizes the trustees to make discretionary distributions of trust income and principal to named beneficiaries.

In 1980, JHM created two more irrevocable trusts (the 1980 Trusts), both of which designated JHM's children as beneficiaries, defined "child" as "issue of the first generation," and defined "issue" as

all persons who are lineal descendants of [JHM] (including legally adopted lineal descendants and including lineal descendants in gestation, but not including step-children and foster-children of any generation) except (i) persons who become descendants by legal adoption after attaining the age of 18 years and their descendants and (ii) illegitimate descendants and their descendants.

Each trust provided that neither JHM nor any other person could modify, amend, or revoke the trust in any respect. Each trust is to be interpreted according to law of its situs, which for all three trusts has always been Minnesota. The combined value of the trusts is approximately $900,000,000.

JHM has been married three times. The six children born during his first two marriages are referred to in this matter as "the older children." JHM married PAM, his third wife, in 1979; they were divorced in 1991. During the marriage, PAM gave birth to DHM (in 1983), CWM (in 1985), and ACM (in 1987), referred to in this matter as "the younger children." On each child's birth certificate, JHM is listed as the father. PAM and DHM, who has since reached majority, are represented in this matter; the district court is representing CWM and ACM pursuant to Minn. Stat. § 501B.19 (2002), which authorizes a court to represent interested minors in trust proceedings.

In 1986, JHM filed a petition to dissolve his marriage to PAM that challenged the paternity of DHM and CWM. ACM was not yet born. JHM subsequently filed a notice of voluntary dismissal of the action, stating that "with respect to the issues raised by him relative to the paternity of [DHM and CWM]... [he] voluntarily dismisse[d the] petition with prejudice."

In 1989, the trustees of a fourth trust, created for the benefit of JHM and not at issue here, filed a petition in Minnesota district court seeking authorization to distribute trust assets to JHM's "children," a beneficiary class defined in the trust instrument as "all [of JHM's] legal issue and all adopted children." The petition, which was considered without objection from the older children, identified the younger children as JHM's and therefore eligible to receive trust ...


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