Opinion ID: 1914382
Heading Depth: 1
Heading Rank: 2

Heading: recording the names of beneficiaries

Text: The names of each beneficiary of this trust must be recorded by the trust recordkeeper in the trust records.... An up-to-date list of these beneficiaries may be certified by the trustees.... [T]hat list is intended to represent a clear and definite means for the ascertainment of the beneficiaries of this trust. In First Nat. Bank v. Schroeder, 222 Neb. 330, 383 N.W.2d 755 (1986), we held invalid a trust that failed to adequately identify its beneficiaries. The trust at issue in Schroeder provided that the lawful possessor of the trust's units of beneficial interest would be the lawful owner of the interests. Id. at 332, 383 N.W.2d at 757. We declared the trust invalid, stating: The trust document contains no provision indicating who is to receive the certificates of beneficial interest, nor does it empower the trustees to make that determination. [The Settlor] argues that [under the trust provisions] ... the beneficiaries were at all times ascertainable. [The Settlor] misses the point that [i]t is essential to the creation and existence of a trust that a ... beneficiary ... be designated with sufficient clarity and certainty to be capable of identification, although not necessarily by name.... (Emphasis supplied.) [Citation omitted.] The trust simply designates the owner as the beneficiary without providing how possession and ownership shall occur. Resultingly, the trust, on its face, does not adequately identify its beneficiaries and therefore must fail. Id. (Emphasis supplied.) The T-M Enterprises Trust similarly fails, on its face, to adequately designate its beneficiaries. The trust, like the trust in Schroeder, supra, merely provides a method of ascertaining who owns the certificates of beneficial interest. However, nothing in the trust instrument itself indicates how possession and ownership shall occur. The trust provisions do not indicate who is to receive the certificates, nor do they give the trustees the power to make that determination. As was the case in Schroeder, the trust must fail. FNB also attacked the validity of the trust on other grounds, including failure to adequately identify its corpus and creating a spendthrift trust for the benefit of the settlor. Because failure to adequately identify beneficiaries is sufficient ground to invalidate the trust, we do not address FNB's other allegations. Having determined that no trust existed to which Ted and Mona Daggett could transfer their realty, we next must consider the effect of the two deeds. In Schroeder, supra, we were faced with a factual scenario strikingly similar to the one now before us. After the debtor in Schroeder had transferred most of his assets to a trust, the bank obtained a judgment against him. Its attempts at execution having failed, the bank successfully attacked the validity of the trust in district court. Schroeder, 222 Neb. at 331, 383 N.W.2d at 756-57. On appeal, we agreed that the trust was invalid and affirmed the district court decree which declared that [the trust's] assets are held by the Trustees in Constructive Trust for [the debtor]. Id. at 332-33, 383 N.W.2d at 757-58. Although our analysis in Schroeder was correct, we note that a resulting trust, rather than a constructive trust, is created when an inter vivos express trust fails and the settlor has not indicated how the property should be distributed upon such failure. See, In re Estate of Mooney, 131 Neb. 52, 267 N.W. 196 (1936) (citing Restatement of Trusts § 411); Holbein v. Holbein, 149 Neb. 281, 30 N.W.2d 899 (1948); V. William F. Fratcher, Scott on Trusts §§ 404.2, 411 (4th ed. 1989). The difference in name, however, does not change the result. As was the case in Schroeder, supra, the trustees of the T-M Enterprises Trust held the deeded real estate in trust for the settlors, Ted and Mona Daggett. Despite conveying his legal title to the real estate to the trustees, as a beneficiary of the resulting trust Daggett remains the equitable owner of the property. See, Holbein, supra ; Scott on Trusts, supra, at §§ 404.2, 462.1. As such, Daggett possessed an interest in the real estate that could be used to satisfy FNB's judgment. The requirements of Thies are therefore satisfied and FNB may satisfy its judgment through equitable proceedings. See Thies, supra . Neb.Rev.Stat. § 25-1564 (Reissue 1989) provides, in pertinent part: Where a judgment debtor has not personal or real property subject to levy on execution, sufficient to satisfy the judgment,... any interest he may have in any ... claims or choses in action, due or to become due to him ... shall be subject to the payment of such judgment by proceedings in equity .... Id. (Emphasis supplied.) The record indicates that at some point after June 20, 1988, the T-M Enterprises Trust was amended to cure the invalid beneficiary provisions. However, there is no indication of when the amendment occurred. FNB established a prima facie case for its equitable-assets creditor's action by proving that (1) it had obtained a judgment against Daggett; (2) it had exhausted its remedies at law; and (3) due to an infirmity in the trust, Daggett had retained an equitable interest in the realty until at least June 20, 1988. See Thies, supra . Having established these requirements, the burden was on the defendants to show that the trust had been successfully cured prior to the filing of this action. State ex rel. Beck v. Associates Discount Corp., 168 Neb. 298, 308, 96 N.W.2d 55, 65, modified 168 Neb. 803, 97 N.W.2d 583 (1959), overruled on other grounds Dailey v. A.C. Nelsen Co., 178 Neb. 881, 136 N.W.2d 186 (1965) (stating: The burden of evidence at any particular time rests on the party who would be defeated if no further evidence would be introduced.). The defendants have not shown that the trust was amended prior to the initiation of this suit. Because the defendants have failed to rebut FNB's prima facie case, we treat the trust as invalid at the time this suit was filed. At that time the trust held only bare legal title to the property. As a result, regardless of the curative effect of the subsequent amendment, the trust and Daggett's sons took Daggett's equitable interest in the real estate subject to FNB's judgment. See Nowka v. Nowka, 157 Neb. 57, 66, 58 N.W.2d 600, 605 (1953) (holding: [T]he beginning of a creditor's action to subject an equitable estate to the payment of a judgment gives a specific lien upon the property which it is sought to reach and this lien continues while the cause is pending.). FNB may reach Daggett's interest in the real estate to satisfy its judgment. See Neb.Rev.Stat. §§ 25-1503, 25-1564 (Reissue 1989). We next address the defendants' argument concerning the statute of limitations. The defendants argue that FNB's causes of action are barred by the statute of limitations and that, as a result, FNB's petition failed to state a cause of action. They further allege that the applicable statute of limitations in an action to set aside a conveyance as fraudulent is four years, pursuant to Neb.Rev.Stat. § 25-207 (Reissue 1989). We agree with the defendants' interpretation of the law; if FNB had brought suit based solely on allegations of fraudulent conveyances, § 25-207 would apply. However, as we have already discussed, FNB asserted another ground for making the real estate subject to its judgmentthe invalidity of the trust itself. This non-fraud ground falls outside the ambit of § 25-207. However, a judgment is a prerequisite for bringing a creditors' action, Thies, supra, and the equitable-assets action, not specifically governed by any other limitations period, is therefore governed by Neb.Rev.Stat. § 25-1515 (Reissue 1989). Section 25-1515 provides, in pertinent part: If execution shall not be sued out within five years from the date of any judgment that now is or may hereafter be rendered in any court of record in this state, or if five years shall have intervened between the date of the last execution issued on such judgment and the time of suing out another writ of execution thereon, such judgment ... shall become dormant.... Id. FNB clearly complied with § 25-1515. FNB received its original judgment in 1984 from the district court for Scotts Bluff County. In 1985 and 1988, FNB issued execution, collecting roughly $21,500. The present action was filed on October 5, 1988. FNB has allowed no five-year lapses between executions and has not allowed the judgment to become dormant. FNB's action is not barred. Because we have determined that the invalidity of the trust is dispositive on the issue of FNB's ability to reach the real estate, we do not address FNB's contentions that Daggett's transfers to the trust were fraudulent. We thus turn to the defendants' final assignment of error, that the district court erred in denying their motion for a new trial. A motion for new trial should be granted only where there is error prejudicial to the rights of the unsuccessful party. Kumar v. Douglas County, 234 Neb. 511, 516, 452 N.W.2d 21, 24 (1990). The District Court has the power and is required to consider and determine motions for a new trial by the exercise of its sound judicial discretion. Carnes v. Weesner, 229 Neb. 641, 650, 428 N.W.2d 493, 499 (1988) (quoting Alliance Tractor & Implement Co. v. Lukens Tool & Die Co., 199 Neb. 489, 491, 260 N.W.2d 193, 195 (1977)). The district court's denial of a motion for new trial will be affirmed when the court's decision is neither prejudicial nor an abuse of discretion. Schuster v. Baumfalk, 229 Neb. 785, 429 N.W.2d 339 (1988). Although we have not addressed each cause of action addressed by the district court, we agree with the court on the dispositive issueFNB's ability, as a result of the invalid trust, to reach Daggett's interest in the land. The district court correctly held that the trust was void and Daggett's interest in the realty could be reached to satisfy FNB's judgment. The court's ruling was not, as the defendants argue, contrary to the evidence or the law. The record indicates no abuse of discretion in the court's denial of the motion for new trial. We therefore affirm the district court's ruling on the motion. The district court correctly ruled that the trust was invalid. As such, Daggett retained an equitable interest in the deeded realty which FNB may reach to satisfy its judgment. We therefore affirm the district court on those grounds necessary to dispose of this case. AFFIRMED.