Court Opinion

ID: 8029336
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:00:05.885643+00
Date Added: 2024-06-11T16:36:50.631373
License: Public Domain

JUSTICE TRIEWEILER
dissenting.
¶78 I join in the dissent of Justice Cotter to the extent that it is based on § 72-33-618(2), MCA. I conclude, based on the following additional thoughts, that removal of, and substitution of, Norwest Investment Management and Trust as trustee of the Berthot Estate was appropriate under both subsection (a) for breach of the trust and subsection (e) for other good cause. I depart from that dissent to the *383extent that it would reverse the District Court on the basis of § 72-33-406, MCA.
¶79 I agree with the majority’s conclusion that a trust must be managed to carry out the testator’s intent. My problem with the majority Opinion is what I believe to be its premise as set forth in ¶ 47 where the majority states, “the purpose of the trust is not to provide income for the income beneficiaries, but rather, to preserve trust assets for later distribution to the residual beneficiaries.” To believe that is to believe that Mildred I. Berthot, who executed this testamentary trust at the age of 73, in 1953 cared more about her unborn and unknown great grandchildren than she did her own daughter and living grandchildren. To make that assumption defies everything that I understand about human nature and relationships.
¶80 Mildred’s will, which includes the trust, mentions only three beneficiaries, her daughter Bernice B. Klingensmith and her granddaughters, Ellen M. Collins and Joanne Barrett, who are the petitioners in this case. Collins was 11 years old when the trust was executed and had no children. Barrett was 24 and, based on the record, may or may not have recently given birth to her first child but no others. (The oldest child has joined in the petition to replace the trustee.) It would have been unnatural for Mildred to be more concerned about the amount of the residual estate left to her yet unborn great grandchildren than the three descendants who were specifically mentioned as income beneficiaries of her trust and I would conclude that her primary reason for establishing the trust was to benefit her three named descendants. The original trustee would have known that. Mildred designated Security Bank and Trust of Bozeman as trustee. Her husband was a founder and the officers were friends of the family. It was not until after her death that Norwest was substituted as trustee.
¶81 The majority state in ¶ 51 that Mildred’s exact intent is a matter of speculation. I agree and only speculated based on the corresponding effort to do so in the majority Opinion. However, I continue to believe that reliance on human nature will bring us closer to the truth than reliance on the legal fiction drawn from boilerplate language that this 73 year old grandmother of two intended the current consequences of the discretion she vested in her family bank.
¶82 As Justice Cotter mentions in her dissenting opinion, the trust simply has not been managed by Norwest for the benefit of Mildred’s three named descendants. From the time of Bernice Klingensmith’s death in 1994, the percentage of the trust value paid to Mildred’s *384grandchildren has steadily declined and the fee paid to Norwest has steadily increased as the following table indicates:
Year Market Value Percent of Market Distribution Value Distributed to Each To Beneficiaries Beneficiary Norwest Fee1
1994 $ 565,599.80 3.9% $ 3,108.92 $ 4,807.60
1995 $ 717,893.22 3.7% $13,334.67 $ 6,102.10
1996 $ 861,648.30 2.9% $12,325.32 $ 7,324.01
1997 $1,096,306.23 2.1% $11,662.74 $ 9,318.60
1998 $1,393,057.53 1.7% $12,121.23 $11,841.00
¶83 The fact is that Norwest now receives practically the same amount in fees as is distributed as income to each of Mildred’s granddaughters. Furthermore, because Norwest collects half of its fee from the residual beneficiaries and half of its fee from the income beneficiaries, the income beneficiaries bear an increasingly disproportionate share of that expense. The trustee’s fee in 1998 equals nearly 49% of the income distributed to the income beneficiaries compared to 22% of the income distributed in 1995. By comparison, the percentage of Norwest’s fee paid by the residual beneficiaries in 1998 was the equivalent of .42%.
¶84 In 1998, while Mildred’s grandchildren were receiving 1.7% of the trust’s total value, Norwest was being paid a fee equal to 28% of the total dividend and interest income. If attorney and accounting fees are included, an amount equal to 31% of the total dividend and interest income was being paid to someone other than Mildred’s intended income beneficiaries. By 1998, Norwest had achieved a financial position equal to Mildred’s intended income beneficiaries. The reason was that from 1994 until 1998, the amount of the trust invested in equities increased from 70% to 87%. By 1998, it was clear to both beneficiaries, and five out of six of their children, that the trust was being managed primarily for the benefit of Norwest and not for the benefit of Mildred’s two grandchildren. The reason is clear. It was acknowledged during the District Court proceedings by Neil Severinson, Norwest’s vice-president and trust officer, when he gave *385the following answers to the following questions:
Q. Mr. Severinson, there’s something that I’ve been wondering and perhaps you can clear it up for both me and the Court. Why if beneficiaries of this trust and five of the six residual beneficiaries of the trust have signed a petition saying they don’t trust you and they don’t want you, why don’t you just resign?
A. If the reason for asking that is because of the litany of alleged offenses, we don’t believe we have done those things. We think we have had good performance.
Q. The question is why are you fighting it whether it’s true or not true? They don’t trust your judgment. They don’t trust your management. Why do you want to continue to be the trustee?
A. That is what we do.
Q. It’s the fees, isn’t it?
A. That’s why we are in the business; that’s how we make our living.
Q. Alright. Okay. So you lose this trust, you lose some fees?
A. Sure.
Q. Okay. And you realize, don’t you, that the higher the market value of the trust, the greater fees you’re going to generate?
A. Yes.
¶85 I would conclude there was sufficient basis, pursuant to § 72-33-618(2)(a) or (e), MCA, to remove Norwest as trustee and that the District Court abused its discretion when it refused to do so. Therefore, I would reverse the judgment of the District Court refusing to do so and dissent from the majority Opinion.

 Based on Norwest’s estimate, that fee is equivalent to 0.85% of trust value.