Court Opinion

ID: 9532399
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:20:59.950752+00
Date Added: 2024-06-11T13:28:45.398670
License: Public Domain

Zenoff, C. J., and Mowbray, J.,
dissenting.
We respectfully dissent. The trust in question is a valid spendthrift trust as regards the appellant; a material purpose of the trust remains to be accomplished; and the appellant is collaterally estopped from asserting the trust does not provide for payments to her. For these reasons, the decision of the lower court should be affirmed.
1. Appellant urges that the trust is invalid since it was invalid as regarded her mother as an attempt to establish a spendthrift trust for oneself. Appellant does not argue that the trust was void ab initio, however, so the question is not determined by its earlier validity or invalidity with regard to her mother. Coughran v. First Nat’l Bank of Baldwin Park, 64 P.2d 1013 (Cal.App. 1937); 2 G. Bogert, Law of Trusts and Trustees, § 223 (2d ed. 1965). The sole question with respect to this issue is whether the trust is a spendthrift trust as regards the appellant.
The answer to this question is determined by the Spendthrift Trust Act (NRS Chapter 166). NRS 166.020 defines a “spendthrift trust” as “a trust in which by the term thereof a valid restraint on the voluntary and involuntary transfer of the interest of the beneficiary is imposed.” Appellant does not question the validity of the trust as regards herself (for example as a fraud against creditors), and as was indicated, its validity or invalidity as regarded her mother does not determine this *121question. Instead, she asserts that the trust was not intended to operate as a spendthrift trust as to her.
Though the preamble to the trust speaks only of the intent to restrain her mother’s spending, the body of the trust instrument was fashioned to restrain the appellant’s spending also. She is to receive money out of the trust only at the discretion of the trustee until she reaches age 28, and she is precluded from assigning, transferring, anticipating or creating a lien upon her interest in the trust. NRS 166.050 indicates that no magic words are necessary for the creation of a spendthrift trust.1
2. By use of these words, a restraint is imposed on the voluntary and involuntary transfer of the appellant’s interest within NRS 166.020. The material purpose of the trust remains to be accomplished so the appellant may not terminate it even though she is the sole living beneficiary. IV A. Scott, Law of Trusts, § 337.3 (3d ed. 1967). Under NRS 166.090 the existence of a spendthrift trust does not depend upon the character, capacity, incapacity, competency or incompetency of the beneficiary. It is not for us to decide the wisdom of the creation of the spendthrift trust as to the appellant, nor are those cases pertinent that allow beneficiaries to terminate an “ordinary” trust where the beneficiaries consent to a termination because the purposes of the trust are fulfilled. A spendthrift trust is “special,” one that is established usually to prevent the beneficiary from becoming impoverished.
The purpose of this trust, at least it so appears, was to protect the daughter from experiencing what was happening to her mother. Such material purpose does not allow the beneficiary to reach the trust fund. The material purpose of this trust has not been served as to the daughter, and for that reason alone she cannot terminate the trust. Some states have judicially declared policies against spendthrift trusts (see 2 G. Bogert, Law of Trusts and Trustees, §§ 222, 224 (2d ed. 1965)) but the legislature in this state has chosen to sanction them and we must follow that direction.
3. Furthermore, the only statutory exception to the general rule of anticipation of the trust according to NRS 166.120 exists when the trust does not provide for payments to the *122beneficiary.2 Appellant contends that even if the trust is a valid spendthrift trust as regards her, she may anticipate her interest in it because it does not provide for payments to her. The answer to this contention is that the trust does provide for the necessary payments. In November, 1969, a judgment was entered in the Second Judicial District Court, Washoe County, declaring that the respondent was empowered to pay the appellant discretionary sums under the trust instrument. The judgment recites that the appellant had notice of the respondent’s petition to the court. She did not contest the propriety of that judgment and may not now act in disregard of it.
In Clark v. Clark, 80 Nev. 52, 56, 389 P.2d 69 (1964), this court stated: “On the other hand, collateral estoppel (estoppel by record) may apply even though the causes of action are substantially different, if the same fact issue is presented.” See also Anno., 24 ALR3d 318 (1969). This rule applies here to bar the appellant’s right to claim relief under NRS 166.120(1).
The November, 1969, judgment declared that the trustee was empowered to pay the appellant discretionary sums out of the trust under the ambiguous trust instrument. The appellant’s assertion that she may anticipate recovery of her interest in the trust is founded upon the contention that the trust makes no provision for payments to her. She thus attacks collaterally the earlier judgment made in a proceeding of which she had notice. Allowing her to do so flies in the face of the well-reasoned rule announced in Clark. While it is true, as the majority indicates, that the earlier judgment did not determine the right of the appellant to compel an early termination of the trust, that judgment did make a finding which determines the outcome of this action.
It is well settled that judgments entered in probate proceedings are entitled to be treated as res judicata. Lucich v. Medin, 3 Nev. 93 (1867); 1 Banc. Prob. Prac. § 129 (1950); 46 *123Am.Jur.2d, Judgments § 623 (1969). The appellant thus may not re-litigate this question merely because she was a non-contesting party to a probate proceeding.
This case is comparable to In re Freman’s Estate, 8 Cal. Rptr. 311 (Cal.App. 1960), where the beneficiary was barred from contesting the propriety of the trustee’s first accounting on the assertion that it had improperly refused to make retroactive payments out of the trust. The trustee had earlier sought court instructions on the distribution of the trust and was told to make distributions prospectively only. The later attack upon the trustee’s accounting was viewed as a collateral attack on the earlier judgment and as such was held to be prevented by collateral estoppel. So also should the collateral attack presented here be prevented.
For the foregoing reasons, we respectfully dissent and urge that the judgment of the trial court should be affirmed.

 NRS 166.050. No specific language necessary for creation of trust. No specific language is necessary for the creation of a spendthrift trust. It is sufficient if by the terms of the writing (construed in the light of this chapter if necessary) the creator manifests an intention to create such a trust.

 NRS 166.120. Principle governing construction: Restraints on alienation.
1. A spendthrift trust as defined in this chapter restrains and prohibits generally the assignment, alienation, acceleration and anticipation of any interest of the beneficiary under the trust by the voluntary or involuntary act of the beneficiary, or by operation of law or any process or at all. An exception is declared, however, when the trust does not provide for the application for or the payment to any beneficiary of sums out of capital or corpus or out of rents, profits, income, earnings, or produce of property, lands or personalty. In such cases, the corpus or capital of the trust estate, or the interest of the beneficiary therein, may be anticipated, assigned or alienated. . . . (Emphasis added.)