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In re Hirsch

July 16, 2009


Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable Gail H. Hagerty, Judge.

The opinion of the court was delivered by: Crothers, Justice.


Opinion of the Court by Crothers, Justice.

[¶1] Timothy Betz appealed from a district court order reforming a trust. Because we do not consider issues raised for the first time on appeal, we affirm the district court's order. We decline, however, to award attorney fees or costs under N.D.R.App.P. 38 for a frivolous appeal.


[¶2] In 1994, the "Emelia Hirsch June 9, 1994, Irrevocable Trust" was created, and Emelia Hirsch transferred assets to the trust. The stated purpose of the trust was "to supplement any benefits received (or for which Settlors may be or become eligible) through or from various governmental assistance programs and not to supplant any such benefits." The beneficiaries of the trust were Emelia Hirsch's three children, Carolyn Twite, Marlene Betz, and Duane Hirsch, and her ten grandchildren, including Timothy Betz. The trust named Carolyn Twite and Duane Hirsch as co-trustees. When disputes subsequently arose over the administration of the trust, Marlene Betz was added as a third co- trustee. Ultimately, the children were removed as trustees, and the court appointed professionals to act as trustees.

[¶3] The trust has become the source of protracted litigation and has caused a rift between two factions within the family. Emelia Hirsch, Carolyn Twite and her children, and Duane Hirsch and his children contend that Emelia Hirsch did not understand the terms of the irrevocable trust and that she never intended to give up control of her property during her lifetime. Marlene Betz and her children contend that the original trust is irrevocable and that they are entitled to benefits under the terms of the trust.

[¶4] In an affidavit, Emelia Hirsch explained her intent in creating the trust:

"5. That as Trustor I appointed Carolyn F. Twite and Duane J. Hirsch Co-Trustees of the Trust. However, the Co-Trustees had no knowledge of the actual provisions of the Trust. I did not disclose any information to any of my children regarding the Trust as I did not feel it was any of their business to know what my assets (personal property, real estate and investments) and business matters were. It was my intent that only upon my death, or in the event that I could not mentally make decisions, that my co-trustees would step in and make decisions for me and help control my business and personal matters.

"6. Since the time of discovery of the Trust my family has been torn apart with a minority of the family making demands for financial payments and for me to turn over my assets and possessions, including personal property and real estate. At no time did I ever intend to extend to them my possessions or assets in any form or give them access in any manner except as I determined them to be distributed.

"7. At no time was the Trust meant to be an outright distribution of my trust assets to my children and my grandchildren in the manner in which it is now being interpreted and my possessions distributed. At all times I desired to maintain total control of my personal and financial matters without interference from my family or the Court.

"8. At all times during preparation and signing of the Trust it was my understanding that I would have total control of all my assets and financial matters and could continue operating my business as I have always done-with me making all my decisions without interference from anyone.

"9. I had no understanding that the beneficiaries of the Trust were to receive funds during my lifetime. I only intended that upon my death my heirs and beneficiaries would receive the trust assets, if there would be any remaining after my death.

"10. There was no clear distinction made to me by my attorney regarding the function of the trust as revocable v. irrevocable. I did not fully understand the meaning of "irrevocable" and as such could not appreciate the ramifications of a trust being irrevocable. It was never my intention to create a trust which I could not alter or amend.

"11. If I had fully understood the content, restrictions and limitations of the Trust, I would not have agreed to enter into it nor would I have transferred property to the Trust.

"12. I have always strongly believed that I should be able to be in total control of all my personal and financial matters and would never give up my control to anyone, including a trustee. It was always my intent that I have total ...

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