Court Opinion

ID: 9730586
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:17:03.146691+00
Date Added: 2024-06-11T18:26:07.673968
License: Public Domain

JUSTICE GREIMAN, specially concurring in part and dissenting in part: I agree with the majority that there is no showing of “unclean” hands on the part of the Trustees. On the one issue that might have suggested “unclean hands,” they amended the bylaws of the Oakleaf Foundation to exclude any possibility of any direct salary or compensation to the several Trustees, now officers or directors of the Oakleaf Foundation. I disagree with the majority on the issue of the construction of the language of the trust with reference to the impact and effect of the settlor’s direction to terminate the trust after 50 years. The trust was executed in Omaha, Nebraska, and it provides for application by the Nebraska Attorney General to the District Court of Douglas County, Nebraska, in the event no successor trustee is appointed, requires the Trustees to notify the District Court for Douglas County, Nebraska, of the existence of the trust after the death of the settlor, and further provides that after the death of the settlor, the Trustees’ books, records and accounts are subject to inspection by the District Court of Douglas County, Nebraska. The majority, although quoting the Restatement of Conflicts of Laws, appears to ignore the rather plain language of the Restatement. There are at least four references to the State of Nebraska in the instrument and direct references to the role of the District Court of Douglas County, Nebraska. The document does not suggest that the Trustees go to “court” or that the moving party be “an Attorney General.” It is the District Court of Douglas County, Nebraska, that is directed to get involved with administration of the trust, and it is the Nebraska Attorney General that is directed to go into the District Court of Douglas County, Nebraska. The Restatement suggests that the trust be construed in accordance with the laws of the state designated for this purpose in the instrument. Surely these references to Nebraska in the trust should satisfy this prong of the Restatement. More compelling is the provision of the Restatement that directs the court to use “the rules of construction of the state which the testator or settlor would probably have desired to be applicable.” Restatement (Second) of Conflicts of Laws § 268, at 144 (1971). Certainly at least five references to the State of Nebraska, its District Court or its Attorney General should probably give us some idea which state’s laws should be employed in the construction of this document. Article VII of the trust agreement provides: “The Trust Estate shall be entirely distributed and the Trust terminated not later than fifty years (50) from the date of this Agreement, and if at such time any property shall remain in the hands of the Trustees, the same shall be distributed for such purposes as mentioned in Article V hereof. If, prior to the termination date, the Trustees shall have distributed the entire Trust Estate, the Trust shall thereupon end, and the Trustees shall stand discharged.” In Olson v. Sampson, 208 Neb. 18, 302 N.W.2d 32 (1981), the Nebraska Supreme Court examined the intent of the settlor and determined that a gift of the right to use the family house as long as any of his children were alive did not include a restriction on the use and sale of a huge parcel of adjoining land. In Olson, the court observed: “In searching for the intention of the testator, the court must examine the entire will, consider each of its provisions, give words their generally accepted literal and grammatical meaning, and indulge the presumption that the testator understood the meaning of the words used. Where a possible construction of the words in a will leads to a highly improbable result, the court will lean toward a construction that will carry out the natural intention of the testator.” (Emphasis added.) Olson, 208 Neb. at 21, 302 N.W.2d at 34. The majority is correct that Article V, which deals with the administration of the trust, grants “absolute discretion” to the Trustees to disburse the income and principal of the trust to a variety of charitable causes, including “foundations *** organized and operated exclusively for carrying on religious, charitable, scientific, literary or educational activities.” In Article VII, where the settlor directed termination of the trust after 50 years, he referred to the administrative provisions of the trust, Article V Could he have imagined that to comply with the direction to terminate the trust after 50 years, the Trustees would establish a foundation and pour over the $11 million? In establishing the trust, the settlor provided that distributions be for “religious, charitable, scientific, literary or educational purposes.” The charter of the Oak-leaf Foundation filed with the Illinois Secretary of State, in addition to those beneficiaries cited in the trust, adds “national or international amateur sports competition.” Amateur sports competition? Amateur sports competition! Fortunately, the trial court directed this new beneficiary be removed by the board of directors and this was done. Inserting the new beneficiary in the Oakleaf charter does, however, indicate how far we have come from Mr. Meyers’ state of mind on that day in 1946 when the trust was created. We should question whether the Trustees have complied with the terms of the trust in its termination and liquidation where, contrary to the express language of the instrument, the new arrangement provided compensation for the fund managers and changed the stated beneficiaries. It was only after court proceedings were commenced that there was compliance with the terms of the trust. Returning to Olson, where the construction “leads to a highly improbable result,” we should lean to a construction that will carry out the natural intention of the settlor. I would give effect to the clear intention expressed in Article VII, the termination of the trust. The majority allows the language — albeit clear — of Article V to trump the required termination of the trust. I do not give much credence to the Attorney General’s argument that continuing the foundation causes an unnecessary expense in the administration of the funds. However, I do believe that continuing the administration of the funds in the guise of a foundation deprives the poor and the needy of the corpus of the trust: $11 million. The majority sets out the requirements of the Internal Revenue Code, which imposes upon charitable foundations the obligation to annually distribute 5% of their net investment assets. Accordingly, the Oakleaf Foundation need only distribute about $550,000 a year rather than distribute the entire $11 million to the “end user” charities. If that was the desire of the settlor, why the 50-year termination? Why not the trust in perpetuity? I believe that a fair reading of this document is that the settlor wished to end this wonderful undertaking 50 years after he executed the document.1 Apparently, contrary to his expressed intentions, the majority believes that he wished it to go on in perpetuity.  Apparently the notion that charitable trusts and foundations are given a date certain for termination is neither new or unique. Julius Rosenwald, one of Illinois’s most generous philanthropists, required that his charitable foundation use both income and principal within 25 years of his death. In a 1929 article in the Saturday Evening Post, The Burden of Wealth, he reasoned “ T am opposed’ *** ‘to the principle of storing up large sums of money for philanthropic uses centuries hence, for two reasons: First, it directly implies a certain lack of confidence with regard to the future, which I do not share.... Second, I am against any program that would inject the great fortunes of today into the affairs of the nation five hundred or a thousand years hence.’ ” He also noted that he believed “ ‘the generation which has contributed to the making of a millionaire should also be the one to profit by his generosity.’ ” Diane Granat, Give till It’s Gone, Chicago, May 2003, at 109, quoting Julius Rosenwald, The Burden of Wealth, Saturday Evening Post, 1929.