IN RE STEINBERG FAMILY LIVING TRUST, DAVID L. STEINBERG, Appellee,
STEVEN C. STEINBERG, Appellant.
from the Iowa District Court for Decatur County, Dustria A.
brothers, beneficiaries of a family trust, filed competing
motions for summary judgment in this declaratory judgment
action. The district court granted summary judgment to David
and denied summary judgment to Steven. Steven appeals.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
W. Fern and Dale L. Putnam of Putnam, Fern & Thompson Law
Office, P.L.L.C., Decorah, for appellant.
M. Helton of Helton Law Offices, PLLC, Leon, for appellee.
declaratory judgment action, we are asked to decide whether
we should recognize an exception to the doctrine of
ademptionfor real estate in a trust
that was replaced through a like-kind tax exchange. In the
alternative, we are asked to judicially adopt section 2-606
of the Uniform Probate Code involving ademption. Two
brothers, the sole beneficiaries of the Steinberg Family
Living Trust, brought competing motions for summary judgment
regarding the distribution of property under the trust. The
brothers, David and Steven, disagree as to whether a specific
bequest was adeemed. Specifically, they requested a
declaration of how a Minnesota farm should be distributed.
While the Minnesota farm is now a part of the trust, it was
acquired after the creation of the trust through a like-kind
tax exchange of property. The property exchanged was
specifically bequeathed to Steven. However, the acquired
Minnesota farm is not specifically bequeathed to either
district court held that the specific bequest was adeemed
because the bequeathed parcel of land was no longer in
existence or part of the trust assets. The district court
further held that a piece of property that had been acquired
in a like-kind tax exchange could not be substituted for the
prior, specifically bequeathed parcel of property. Therefore,
pursuant to a residuary clause of the trust, the Minnesota
farm was ordered to be distributed equally between the two
the district court was asked to interpret Article 5, section
B(1) of the trust. The district court found that this
provision of the trust granting one brother the right to
purchase or rent the other brother's specifically
bequeathed property was ambiguous and conflicting. The
district court declared that the provision granting Steven
the option to purchase the Iowa farm from David, whether
called a repugnancy or an inconsistency, was ineffective and
struck it. The district court thereby granted summary
judgment to David.
following reasons, we affirm the decision of the district
court to the extent it declared the specific bequest to
Steven was adeemed and to the extent it concluded the
Minnesota farm was to be distributed equally between the
brothers. We reverse the decision of the district court to
the extent it granted summary judgment to David on the
disputed trust provision. While we agree the trust provision
was ambiguous, we also find that there are genuine issues of
material fact which preclude the entry of summary judgment in
favor of David. We remand to the district court for a trial
on the disputed trust provision.
Background Facts and Proceedings.
February 18, 2000, Jack and Clarine Steinberg established the
Steinberg Family Living Trust. They appointed themselves and
their son, Steven Steinberg, to serve as cotrustees. The
trust provided that Steven and their other son, David
Steinberg, would serve together as cotrustees upon the deaths
of both Jack and Clarine. In addition to ultimately serving
as cotrustees, David and Steven were the only named
beneficiaries. The trust was never amended by Jack or
passed away on August 22, 2011, and Clarine passed away on
July 24, 2013. At Clarine's death, the trust became
irrevocable and triggered the appointment of David as
cotrustee. David was appointed cotrustee in April 2014. At
the time of Clarine's death, the trust held several
assets, including the two parcels of real estate at issue in
this case. David and Steven disagree as to their respective
rights to the two properties and how they should be
first property, the Minnesota property, consists of
approximately eighty acres of land and is legally described
The West Half of the Southeast Quarter of Section 34,
Township 105 North, Range 19 West, Steele County, Minnesota,
excepting therefrom the following tract: Parcel Number 1 of
Steele County Highway Right of Way Plat filed in the Office
of the County Recorder the 5th day of April, 2001, at 8:00
A.M. in Book 13 of Plats, page 278 as Instrument No. 288400.
second property, the Iowa property, consists of approximately
forty acres of land and is legally described as "The
Northwest Quarter of the Northwest Quarter of Section 16, in
Township 99 North, Range 26 West of the 5th P.M., in
Winnebago County, Iowa." At the time of Clarine's
death, the Minnesota property was appraised at $567, 000. The
Iowa property was appraised at $9500 per acre, which amounts
to approximately $380, 000.
trust paragraph at issue, Article 5, section B, provides,
To the Trustors' son, David L. Steinberg, shall be
distributed the house at 112 N. Mill Rd., Buffalo Center, IA,
Lots 24, 25, & 26, Block 24, Buffalo Center, Winnebago
County, IA and the NW1/4NW1/4 Sec. 16-99-26. To the
Trustors' son, Steven C. Steinberg, shall be distributed
the W1/2SW1/4 Sec. 16-99-26. Steven C. Steinberg shall be
given the first right to purchase or rent David L.
Steinberg's interest in the NW1/4NW1/4 Sec. 16-99-26 for
$1500.00 per acre and can exercise this right at any time.
All of the remaining Trust Estate is to be distributed as
provided in Section C, or as specified in the "Specific
Distribution Schedule" attached hereto.
parties agree that the "NW1/4NW1/4 Sec. 16-99-26"
gifted to David refers to the Iowa property. Article 5,
section C provides that Steven and David will have equal
fifty percent shares of any remaining trust assets.
2008, while Clarine and Steven were cotrustees, the trust
sold the Winnebago County, Iowa property described as
"W1/2SW1/4 Sec. 16-99-26" (Winnebago property) and
purchased the Minnesota property in a like-kind tax exchange.
Therefore, at the time of Clarine's death, there were two
parcels of land contained in the trust: the Iowa property and
the Minnesota property. However, only the Iowa property was