Opinion ID: 1736103
Heading Depth: 1
Heading Rank: 21

Heading: Failure to Remove Reinbrecht as Successor Trustee

Text: Tipp contends that the county court erred in not removing Reinbrecht and replacing him with a successor trustee who is disinterested in the outcome and neutral as to the interests of the various beneficiaries. Brief for appellant at 40. Under the NUTC, [i]f a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to the beneficiaries' respective interests. Neb.Rev.Stat. § 30-3868 (Cum. Supp. 2006). As we noted in Rosenberg I, while this case began before the NUTC became operative, we can apply this law unless the application would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties. Neb.Rev.Stat. § 30-38, 110(a)(3) (Cum. Supp. 2006). Tipp relies on pre-NUTC case law generally holding that trustees should be impartial between all beneficiaries. See, Burnham v. Bennison, 126 Neb. 312, 253 N.W. 88 (1934); Northern Trust Co. v. Heuer, 202 Ill. App.3d 1066, 148 Ill.Dec. 364, 560 N.E.2d 961 (1990); Matter of Duke, 305 N.J.Super. 408, 702 A.2d 1008 (1995). In essence, Tipp's argument is equivalent to the law codified in the NUTC, specifically at § 30-3868. Furthermore, under the Nebraska Uniform Prudent Investor Act, [i]f a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries. Neb.Rev.Stat. § 8-2207 (Reissue 1997). While § 8-2207 has been repealed, it was repealed by the same legislative bill that enacted § 30-3868. See 2003 Neb. Laws, L.B. 130, §§ 68 and 143, operative Jan. 1, 2005. At all times relevant to this case, the trustee had a statutory duty of impartiality, either under the Nebraska Uniform Prudent Investor Act or the NUTC. Therefore, application of the NUTC will not substantially prejudice the rights of Tipp and should apply. Tipp does not point to any evidence indicating that Reinbrecht has violated his duty of impartially with respect to the three trust beneficiaries, and we find none in our review of the record. The record indicates Reinbrecht has diligently attempted to manage the assets of the trust. There is no indication, nor does Tipp argue, that Reinbrecht has or will divide the trust assets in any other way than equally between Tipp, Maynard, and Howard. Tipp's disagreement with Reinbrecht arises from his efforts to marshal assets into the trust that Tipp believes belong to her personally. While we agree with most of Tipp's arguments in this regard, as noted above, this does not lead to a conclusion that Reinbrecht violated his duty of impartiality in arguing to the contrary. Reinbrecht owes no duty of impartiality to Tipp in her individual capacity, only as a cobeneficiary of the trust. We conclude that there is competent evidence to support the decision of the county court to deny Tipp's motion to remove Reinbrecht as trustee.