Many people still use the term Executor and get confused when they hear other words describing the same thing.  The Uniform Probate Code now uses the term Personal Representative to replace the old term Executor.  Although the term has changed, most of the rules have not.  It is the Personal Represenative’s duty to settle and distribute the Decedent’s (the deceased’s) Estate according to the terms of the will.  The Personal Representative must also act in the best interest of the Estate.  Finally, the Personal Representative is responsible for paying managing, protecting, and preserving the Decedent’s estate, and settling the final taxes.

If you have further questions, contact us today for a free, no obligation consultation.  Simply fill out the free legal consultation form online or call the office that is located nearest you. 

Will Executor Minnesota

• Revocable Trust
• Irrevocable Trust
• Express Trust
• Implied Trust
• Irrevocable Life Insurance Trust
• Grant Retained Annuity Trust
• Minor’s Trust
• Charitable Lead Trust

What are the basic elements of a Trust?  A trust typically will have the following sections:

• Introductory Paragraph
• Recitals
• Reservation of Rights and Administrative Powers
• Disposition of Trust Assets
• Appointment of Trustees
• Trustees’ Powers
• Trust Administration
• Rules of Construction/Protective Provisions
• Trust Provisions for Married Grantor
• Making the Document Legal
• Inventory of Trust Assets and Trust Funding

Why do people draft trusts?

Some people want to avoid probate, and will have a Trust designed to do just that. A Trust can help avoid probate because your property is technically owned by the Trust, therefore the probate courts don’t have anything to administer. The Trustee distributes your assets pursuant to your instructions. Trusts are popular because they are very versatile, and can be used to accomplish many different purposes.

Contact us today for a free, no obligation consultation.  Simply fill out the free legal consulation form online or call the office nearest you.  We proudly serve the entire State of Minnesota.

Minnesota Trusts

If you need help drafting your last will and testament, please contact us today for a free, no obligation consultation.  Simply complete the free legal consulation form online or call the office nearest you.

A will is a gift of property that will only take effect upon the Testator’s death (Testator is the individual who makes the will).  In order to be valid, a Will must satisfy the following requirements:

• Person making the will must be at least 18 years old
• Must be sound mind
• Must be in writing
• Must be signed by the Testator
• Must be witnessed by at least two qualified witnesses

How does one Revoke a Will?

There are several ways to revoke a will.

Revocatory Writing – By writing a new will, the Testator can expressly revoke an older one.  If there is no express revocation present, a revocation can be presumed in certain circumstances.

Revocation by Changed Circumstances – A good example would be when the Testator gets divorced.  This act can revoke a gift to the former spouse.

Revocatory Act – The Testator can perform a revocatory act to revoke the will.  (or direct someone else to perform the act, as long as it’s in the Testator’s presence).  Examples wouldinclude burning the will or tearing it up.

What If I don’t want a Will?

There are other options available (it is important to consult with an attorney to determine which option is best for you).  Some examples include

• Intestacy (dying without a will, which allows State law to prescribe who receives the decedent’s property)
• Joint ownership of property
• Pay on Death Accounts (POD), beneficiary designations
• Revocable Living Trusts

What are the basic elements of a Will?

A basic Will includes the following elements:

• Identifies the Testator and revokes prior instruments
• Gives instructions for the payment of taxes, expenses, and debts
• Appoints a Personal Representative
• Grants fiduciary powers to the personal representative
• Has a residuary clause disposing all other property
• Specific bequests, including personal property items with reference to possible separate writing and residential real estate
• Has protective provision, tax allocation clause, and defines the terms
• Designates a testamentary guardian

Last Will and Testament

Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA

IN COURT OF APPEALS

C5-98-823

In re the Estate of Norman E. Olson.

Filed December 8, 1998

Affirmed

Amundson, Judge
Benton County District Court

File No. P6-97-664
Harry E. Burns II, 111 Ninth Avenue North, P.O. Box 486, St. Cloud, MN 56302 (for appellant)
Barbara Lee Elam, 3206 Brook Forest Drive, Tallahassee, FL 32312 (pro se respondent)

Considered and decided by Willis, Presiding Judge, Kalitowski, Judge, and Amundson, Judge.

U N P U B L I S H E D   O P I N I O N
AMUNDSON, Judge

Appellant wife challenges the district court’s denial of her petition to probate her late husband’s will, which was based on its finding that the will was not properly executed. She argues that this finding is clearly erroneous. We affirm.
FACTS
Norman Olson (decedent) died in May 1995, survived by his wife, appellant Mildred Olson (wife), and his four children from a previous marriage, including daughters Margaret Shipp and respondent Barbara Elam. On July 24, 1995, wife met with attorney Jill A. Pinkert to discuss decedent’s will and an affidavit of survivorship for their real estate. Pinkert reviewed the decedent’s will, which she recollects as being signed and appropriately witnessed. Pinkert told wife that the will would not likely need probating because the Olsons’ property was owned in joint tenancy. Pinkert prepared a new will for wife and told wife to destroy her old will. Wife, however, testified that she understood Pinkert as having instructed her to destroy both her and her husband’s old wills, which she did.

In May 1997, when wife was selling her home, she discovered that it was owned as a tenancy in common, rather than a joint tenancy. A real estate agent testified that he believed this was merely an error and that decedent had intended the property be owned in joint tenancy. Because of the need to settle the ownership of the home, wife petitioned for probate of decedent’s will. The copy of the will that wife had destroyed was the only signed copy. In support of her petition, she submitted an unsigned copy of the will, which had been kept by the Burns Law Office, the drafters of the 1989 will. At the hearing, wife testified that she observed decedent sign his will and that two witnesses signed it. She testified that she was very familiar with the will and that the unsigned copy was definitely the same as the signed will. Thomas Zupanc, the attorney who had prepared the will, stated in an affidavit that he believed decedent and his wife came to the Burns Law Office and executed their wills between May 23 and June 29, 1989. This belief was based on his recollection as well as his records of phone messages, billing records, and a letter from Zupanc to the Olsons. Decedent’s daughter, Margaret Shipp, appeared at the hearing without representation, presumably to oppose probate, and another of decedent’s daughters, respondent Barbara Elam, made submissions that the district court interpreted as opposing wife’s petition.

On January 30, 1998, the district court denied wife’s petition for probate of decedent’s will. This appeal followed.
D E C I S I O N
Here, the district court denied wife’s petition to probate decedent’s will on the ground that the will had not been duly executed. A district court’s factual determination regarding the validity of a proposed will offered for probate will not be reversed unless clearly erroneous. In re Estate of Botko, 541 N.W.2d 616, 617-18 (Minn. App. 1996).

Wife argues that the district court erred in finding that the will was not properly executed. Under statute, a will must be:
in writing;
signed by the testator or in the testator’s name by some other individual in the testator’s conscious presence and by the testator’s direction; and

signed by at least two individuals, each of whom signed within a reasonable time after witnessing either the signing of the will as described in clause (2) or the testator’s acknowledgment of that signature or acknowledgement of the will.
Minn. Stat. § 524.2-502 (1996). That there is no available copy of the original will that comports with the statute is undisputed. Minnesota courts, respecting the common law principle that a lost or destroyed will is presumed revoked, give the lost or destroyed status of a will “some evidentiary weight in determining revocation.” Botko, 541 N.W.2d at 618. The proponent of a lost or destroyed will has the burden of establishing that the will was unrevoked at the time of death. In re Estate of Sandstrom v. Wahlstrom, 252 Minn. 46, 57, 89 N.W.2d 19, 26 (1958). This burden is satisfied by a preponderance of the evidence. In re Estate of Langlie, 355 N.W.2d 732, 735 (Minn. App. 1984).

The district court’s principal reason for finding that the will was not duly executed was the failure of any witnesses at trial (wife, Pinkert, or Zupanc) to remember the identity of the subscribing witnesses. Therefore the court reasoned, “it would be impossible to offer any evidence that the witnesses signed in the testator’s presence.” Wife argues determining the identity of the subscribing witnesses is unnecessary in deciding the proper execution of a will.

Wife further contends that the district court ignored evidence that supported execution. Specifically, there was the affidavit of Pinkert, stating her recollection that the will was signed; the affidavit of Zupanc, who stated his belief that the will was executed between May 23 and June 29, 1989, based on telephone and billing records and his own practices; and wife’s testimony of her recollection that the will was properly executed.

While there may have been some evidence supporting execution of the will, the fact remains that the statute requires a signed and witnessed will. There was no such will provided, and not only was there no testimony or affidavits of subscribing witnesses, but also there was no evidence concerning who these witnesses were. For these reasons, we conclude that the district court did not err by finding that the will was not duly executed.

Affirmed.

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Benton County Probate

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2523

In re:  Conservatorship of Walter W. Apple.

Filed August 22, 2006

Reversed

Halbrooks, Judge

Stearns County District Court

File No. P0-00-3716

Robert A. McLeod, Marc A. Al, Lindquist & Vennum, P.L.L.P., 4200 IDS Center, 80 South 8th Street, Minneapolis, MN 55402 (for appellants Patricia A. Murphy and Professional Fiduciary, Inc.)

Gerald W. Von Korff, Pamela A. Steckman, Rinke-Noonan, 1015 West St. Germain Street, Suite 300, P.O. Box 1497, St. Cloud, MN 56302 (for respondent Walter W. Apple)

            Considered and decided by Minge, Presiding Judge; Willis, Judge; and Halbrooks, Judge.

U N P U B L I S H E D   O P I N I O N
HALBROOKS, Judge

            Appellant challenges the probate court’s order awarding respondent damages for breach of fiduciary duty, fraud, and negligent misrepresentation, as well as an award of attorney fees for bad faith and submitting false information to the court.  Appellant asserts, among other things, that the probate court did not have the authority to review or modify the annual accountings, which had been previously settled and approved.  Because the probate court did not have the authority to review the previous accountings, we reverse.  As a result, the award of attorney fees is also reversed.

FACTS
            Respondent Walter Apple petitioned the Hennepin County Probate Court for the appointment of a conservator of his estate in 1993.  The probate court granted his petition and appointed appellant Patricia Murphy as his conservator.[1]  Appellant filed five annual accountings with the probate court, all of which were settled and approved.  Respondent neither objected to those accountings nor did he appeal from the orders approving them.

Appellant continued to serve as respondent’s conservator until 1999, when respondent petitioned the probate court to discharge appellant and appoint Bremer Trust as the successor conservator.  Appellant agreed to resign as conservator, and the probate court appointed Bremer Trust as the successor conservator.  The probate court also authorized the change of venue to the Stearns County Probate Court because both Bremer Trust and respondent are in St. Cloud. 

Appellant then filed the final accounting, which the Hennepin County Probate Court approved as modified.  The probate court determined that appellant was charging respondent for many things that appellant should have been absorbing, for instance, parking fees, faxes, de minimis phone bills, and gift preparation.  The court found that the costs for those tasks should have been considered part of appellant’s overhead and not passed on to respondent.  Additionally, the probate court found that appellant took “excessively long” to complete some tasks, which contributed to her fees being “unreasonably high” for what was “a simple conservatorship.” 

            Thus, respondent questioned appellant’s fees and the services for which he was charged and requested financial documents from appellant.  Respondent retained counsel and requested that appellant disclose all documents related to his conservatorship.  Appellant refused to disclose the documents, arguing that the accounts could not be challenged.  Respondent then attempted to obtain similar documentation from other sources, but was unable to obtain all of the documents.  As a result, respondent petitioned the Stearns County Probate Court to compel appellant to provide the documents, which the court ordered. 

After respondent obtained his file from appellant, he petitioned the probate court for a hearing to review appellant’s annual accountings and the merits of her billing practices.  Appellant opposed the hearing, arguing that the accountings were final judgments that could not be collaterally attacked in this manner.  The probate court granted respondent’s petition for a hearing.  Appellant filed an interlocutory appeal challenging that decision, but this court dismissed the appeal as untimely.

            The probate court conducted an evidentiary hearing and concluded that appellant was liable to respondent for breach of fiduciary duty, fraud, and negligent misrepresentation.  The court found, as had the Hennepin County Probate Court, that appellant overcharged respondent for certain items, such as billing him for the time it took to sort through a phone bill, de minimis phone charges, going to the bank to deposit checks, and buying and wrapping gifts.  In addition, the court found that appellant charged respondent the same hourly rate regardless of who completed a task, whether it was herself or an employee. 

As a result, the court ordered appellant to pay damages of $81,389.59 plus interest.  In addition, the court ordered appellant to pay $25,000 in attorney fees because she had refused, without basis, to disclose the documents pertaining to respondent’s conservatorship and because she submitted false information to the court in her annual accountings.  Appellant was also ordered to pay $8,423.47 in costs, for a total monetary award of $114,813.06.  This appeal follows.

D E C I S I O N
Appellant asserts that the judgment against her is void for lack of subject-matter jurisdiction.  We review legal issues concerning jurisdiction de novo.  McLain v. McLain, 569 N.W.2d 219, 222 (Minn. App. 1997), review denied (Minn. Nov. 18, 1997).  Although the legislature repealed portions of chapter 525 of the Minnesota Statutes in 2003, it provided that any cause of action arising before the effective date of the successor statute shall be allowed under chapter 525.  2003 Minn. Laws ch. 12 art. 2 §§ 8, 9(c).[2]  Thus, because respondent’s causes of action arose between 1993 and 1998, his claims are grandfathered-in under chapter 525.  Id., § 9(c). 

The probate court

shall have power to correct, modify, vacate, or amend its records, orders, and decrees: (a) At any time, for the correction of clerical error . . .; (b) Within the time for taking an appeal, for the correction of judicial error; (c) Within two years after petitioner’s discovery thereof, for fraud, whether intrinsic or extrinsic, or misrepresentation unless petitioner be a party to such fraud; (d) Within two years after the date of filing of any record, order, or decree, for excusable neglect, inadvertence, or mistake.

Minn. Stat. § 525.02 (2002) (emphasis added). 

Because this matter arose as a petition in the probate court to review the prior accountings of a conservator, respondent did not actually bring civil claims against appellant but essentially argued that the accountings were erroneous as a result of fraud, breach of fiduciary duty, and negligent misrepresentation.  Thus, the probate court treated respondent’s petition as though he had brought those claims.  In order to determine whether the probate court had the authority under Minn. Stat. § 525.02 to modify the previous orders based on fraud or misrepresentation, we must determine whether respondent commenced the action within two years after discovering the facts supporting those claims.

            In order to assert a claim of fraud, the facts supporting such a claim must be specifically pleaded.  Minn. R. Civ. P. 9.02; Parrish v. Peoples, 214 Minn. 589, 591, 9 N.W.2d 225, 227 (1943).  “A general charge of fraud is unavailing.”  Parrish, 214 Minn. at 591, 9 N.W.2d at 227.  Here, in his petition to the probate court to review appellant’s annual accountings, respondent did not plead a claim of fraud and failed to allege facts supporting a claim of fraud.  Thus, because he failed to plead with specificity the facts supporting a claim of fraud, the claim must fail.  See Westgor v. Grimm, 318 N.W.2d 56, 58 (Minn. 1982) (affirming dismissal of fraud claim that was not specifically pleaded).

            Even if the fraud claim did not fail based on the pleadings, the claims of fraud and negligent misrepresentation are time-barred.  In general, the limitations period begins to run when a cause of action “accrues,” that is, when the action can be brought without being subject to dismissal for failure to state a claim.  O’Neill v. Illinois Farmers Ins. Co., 381 N.W.2d 439, 440 (Minn. 1986), overruled on other grounds by Oanes v. Allstate Ins. Co., 617 N.W.2d 401 (Minn. 2000).  A “cause of action [for fraud] does not accrue until the facts constituting the fraud are discovered.”  Kassan v. Kassan, 400 N.W.2d 346, 349 (Minn. App. 1987) (citing Minn. Stat. § 541.05(6) (1984)), review denied (Minn. Apr. 23, 1987).  The supreme court has stated that

the facts constituting the fraud are deemed to have been discovered when, with reasonable diligence, they could and ought to have been discovered. The mere fact that the aggrieved party did not actually discover the fraud will not extend the statutory limitation, if it appears that the failure sooner to discover it was the result of negligence, and inconsistent with reasonable diligence.

Bustad v. Bustad, 263 Minn. 238, 242, 116 N.W.2d 552, 555 (1962) (quotation omitted).

While denying that any fraud or misrepresentation occurred, appellant alleges alternatively that respondent should have been aware of the facts supporting these claims by 1999, when respondent became dissatisfied with appellant’s services and petitioned to change conservators.  Appellant argues that because respondent was represented by counsel and objected to portions of appellant’s final accounting, he was or should have been aware that he may have these causes of action.

            As noted, when it settled and approved appellant’s final accounting on February 10, 2000, the Hennepin County Probate Court pointed out several anomalies in appellant’s billing practices and, as a result, modified the accounting.  The court commented on the suitability of appellant’s charges by stating that “[t]he character of the Apple property did not require an extraordinary fee,” and “[t]here is no claim [by appellant] of extraordinary skill or success.”  The court stated that appellant “has virtually every item of expense billed to [respondent].  There is little overhead.  He pays for parking, phone, faxing, and holiday gift preparation.”  Additionally, “[a]ny time charged for preparing time records is a cost of doing business and not billable to respondent.”  The court further noted that “[t]he fees of the conservator are unreasonably high” and that respondent was objecting to certain billing items, stating, “Mr. Apple did not want Ms. Murphy to visit and is distressed by this double billing.” 

            The court noted, as did the court here, that appellant absorbed essentially no overhead:

Ms. Murphy seeks to have all attorney fees paid by Mr. Apple.  This is consistent with the absence of any discernible overhead in her business.  Just as all expenses are passed on to Mr. Apple, she seeks to pass along attorney fees she incurred trying to collect her fee.  That fee may have been necessary for her; it was not necessary for Mr. Apple or for the administration of the conservatorship.

            Therefore, because the Hennepin County Probate Court noted these anomalies and issues with appellant’s final accounting specifically and billing practices generally,we hold that respondent’s claims for fraud and negligent misrepresentation accrued as of February 10, 2000.  At that time, respondent should have been aware of the facts supporting these claims.  But respondent did not commence the action to review the annual accountings until December 3, 2003, nearly four years later.  Because the statute only allows the probate court to modify or amend orders up to two years after the claims were, or should have been, discovered, we conclude that the probate court did not have jurisdiction under Minn. Stat. § 525.02 (2002) to vacate the orders approving the final annual accounting of 1993 through 1998 and impose damages.

As a result of our holding, we do not reach the other issues raised by appellant.  Because the district court did not have the authority to review the accountings, we also reverse the award of attorney fees. 

            Reversed.

——————————————————————————–

[1] Appellant subsequently converted her sole proprietorship into a corporation, and both appellant and the corporation are named as appellants in this case.  This opinion refers to appellants jointly as Patricia Murphy.

[2] This opinion cites to the 2002 version of the statutes, as that is the version immediately preceding the repeal.

If you have questions about Minnesota Estate Law please contact us today for a free consultation.

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-00-1129

In Re:  Guardianship of
Karen E. Bruhn, Ward.

Filed February 6, 2001

Reversed and remanded
Peterson, Judge

Stearns County District Court

File No. P500360

Michael G. Blee, Blee Law Office, Ltd., P.O. Box 801, St. Cloud, MN  56302 (for appellant)

Thomas A. Janson, Schmitt & Janson Law Office, 124 East St. Germain Street, P.O. Box 1752, St. Cloud, MN  56302 (for respondent)

            Considered and decided by Randall, Presiding Judge, Peterson, Judge, and Shumaker, Judge.

U N P U B L I S H E D   O P I N I O N
PETERSON, Judge

Appellant seeks review of a probate court order appointing a guardian of her person and estate, contending that the evidence was insufficient to prove that she is incapacitated and in need of a guardian.  Because the findings lack the specificity required by statute, we reverse and remand.

FACTS

            After her father, with whom she had lived for the past 25 years, was hospitalized, appellant Karen E. Bruhn, a 50-year-old woman with chronic schizophrenia, was placed in the Willmar Regional Treatment Center on December 28, 1999.  Her father died on February 12, 2000.

            Diane Willis, appellant’s sister, filed a petition requesting that she and Jane Brown, a neighbor and family friend, and Dr. Alan Espelien, a physician and friend of appellant’s father, be named guardians of both appellant’s person and estate.  Following a hearing in probate court on April 19 and May 23, 2000, the court granted the petition.

D E C I S I O N

            The probate court has broad statutory authority in appointing a guardian and a reviewing court will affirm the probate court’s decision absent an abuse of discretion.  In re Conservatorship of Foster, 547 N.W.2d 81, 84 (Minn. 1996); In re Guardianship of Kowalski, 478 N.W.2d 790, 792 (Minn. App. 1991), review denied (Minn. Feb. 10, 1992).  The reviewing court is limited to determining whether the probate court’s findings are clearly erroneous, giving due regard to the probate court’s determinations regarding witness credibility.  Minn. R. Civ. P. 52.01; In re Conservatorship of Lundgaard, 453 N.W.2d 58, 60-61 (Minn. App. 1990).  The burden to show that a guardian is necessary rests with the petitioner and requires clear and convincing evidence.  Minn. Stat. § 525.551, subd. 3 (1998).

            Appointment of a guardian for a person or estate requires specific, written findings of fact.  Minn. Stat. § 525.551, subd. 5 (1998).  This court has previously warned that “‘general,’ conclusory findings” are insufficient to meet the legislative mandate.  In re Lundgaard, 453 N.W.2d at 63.

            In its order, the probate court found that “[t]he allegations of the Petition are true and correct, having been proved by clear and convincing evidence.”  The court provided no specific findings that explain how the evidence supports the court’s legal conclusions.  The petition, which the court adopted for its findings, merely states in conclusory language that appellant meets the statutory requirements for appointment of a guardian.  The probate court’s failure to provide the required specific findings requires a remand.  Id.

            We do not reach the issue of whether the evidence was sufficient to support a determination of incapacity.

            Reversed and remanded.

Minnesota Estate Planning Lawyer

IN COURT OF APPEALS

A06-559

In re:  Appeal of Decision of
Commissioner of Human Services
In the Appeal of
Lillian Flygare for Medical Assistance

Filed December 19, 2006
Affirmed

Klaphake, Judge

Nicollet County District Court

File No. 52-CV-05-438

Christopher E. Sandquist, Gislason & Hunter, LLP, P.O. Box 4157, Mankato, MN  56002-4157 (for appellant Lillian Flygare)

Kenneth R. White, Assistant County Attorney, Nicollet County Attorney’s Office, P.O. Box 360, St. Peter, MN  56082-0360 (for respondent Nicollet County)

Mike Hatch, Attorney General, Robin C. Vue-Benson, Assistant Attorney General, 900 Bremer Tower, 445 Minnesota Street, St. Paul, MN  55101-2127 (for respondent Commissioner of Human Services)

Considered and decided by Klaphake, Presiding Judge, Ross, Judge, and Harten, Judge.*

S Y L L A B U S
            A support trust is an available asset for purposes of determining eligibility for medical assistance and any trust provision limiting the trustee’s ability to make payments if the beneficiary is eligible for public assistance is unenforceable as against public policy under Minn. Stat. § 501B.89, subd. 1 (2004).

O P I N I O N

KLAPHAKE, Judge

            Appellant Lillian Flygare, through her son and attorney-in-fact Marcus Flygare, challenges the denial of her application for medical-assistance benefits.  Her application was initially denied after respondent Nicollet County determined that she has assets available from a trust established by her deceased husband.  Following a hearing, an appeals referee recommended affirming the county’s decision; that recommendation was adopted by respondent Commissioner of Human Services.  On appeal, the district court affirmed the commissioner’s determination of ineligibility.

            Because we conclude that the trust is a support trust under Minnesota law, it is an available asset for purposes of determining appellant’s eligibility for medical assistance.  And, because the trust provision restricting the trustee’s ability to make payments if appellant becomes eligible for public assistance is unenforceable as against public policy under Minn. Stat. § 501B.89 (2004), appellant can compel the trustee to provide for her support.  We therefore affirm the district court’s determination that appellant is ineligible to receive medical-assistance benefits.

FACTS
            On August 20, 1993, appellant’s husband, Ronald Flygare, executed his last will and testament.  The will provided that if appellant survived him, a portion of his estate, designated as the “Marital Share,” would be paid directly to appellant; the marital share consisted of the amount of the estate that was allowed to pass tax free because it qualified for a marital deduction.  The will further provided that the remaining assets of the estate designated as the “Family Share” would be deposited into a testamentary trust.

            Ronald Flygare died on December 17, 1993.  As provided by the will, the marital share of decedent’s estate was distributed to appellant outright.  The family share was placed in trust, with appellant and her son, Marcus Flygare, appointed as trustees.

            By 2004, appellant had less than $3,000 in personal assets remaining and because her health had deteriorated, she required additional care.  On August 26, 2004, her son, acting as her attorney-in-fact and authorized representative, applied for medical assistance benefits through the county.  At the time of her application, the principal in the trust totaled approximately $300,000.

            On December 23, 2004, the county notified appellant that her application was denied.  The county explained that because appellant had failed to prove that the trust was unavailable, the trust was counted as an asset and put appellant over the $3,000 limit.  See Minn. Stat. § 256B.056 (2004).

            On March 15, 2005, appellant challenged the county’s denial and a hearing was held before a referee.  See Minn. Stat. §§ 256.045, .0451 (2004) (providing for administrative and judicial review of certain human services matters, including applications for medical assistance and setting forth hearing procedures).  At the hearing, appellant’s attorney argued that the trust was intended to supplement rather than supplant public assistance and that it could not be considered an available resource for purposes of medical-assistance eligibility.  The referee concluded that the trust is contrary to public policy because its unambiguous language expressly limits any payment from the “Family Share” of the trust to appellant “in the event she would be eligible for assistance under any government funded program.”  See Minn. Stat. § 501B.89, subd. 1 (2004) (making unenforceable as against public policy trust provisions that allow for limitation or suspension of payments if beneficiary is determined eligible for public assistance).  The referee’s recommendation that the county’s eligibility denial be affirmed was adopted by the commissioner on May 25, 2005.

            On appeal, the district court affirmed the final determination of the commissioner.  In a detailed memorandum, the district court concluded that the trust clearly violates Minn. Stat. § 501B.89 because it requires the trustee to withhold distributions to appellant should she become eligible for public assistance.  The court further explained its rejection of appellant’s attempt to reform the trust so as to allow appellant to receive supplemental distributions from the trust while receiving public assistance.  On appeal to this court, appellant concedes that the trust violates Minn. Stat. § 501B.89, but insists that when the unenforceable provision is removed and the remaining trust provisions are analyzed under common law, the trust must be characterized as a discretionary trust and therefore the assets are not available to appellant for purposes of determining her eligibility for medical assistance benefits.

ISSUE
            Did the agency err in determining that appellant is ineligible for medical assistance benefits because the assets of the trust are available for her support?

ANALYSIS

            Standard of Review 

            This court will review an agency’s medical-assistance eligibility determination independently, without deference to the district court’s review.  Atkinson v. Minn. Dep’t of Human Servs., 564 N.W.2d 209, 213 (Minn. 1997).  We may reverse only if the challenging party establishes that the agency’s decision contains errors of law, is unsupported by substantial evidence, or is arbitrary and capricious.  Minn. Stat. § 14.69 (2004); In re Kindt, 542 N.W.2d 391, 394 (Minn. App. 1996).

            Issues involving the interpretation of language in a statute or in a testamentary trust are issues of law that we review de novo.  See Atkinson, 564 N.W.2d at 213 (acknowledging that this court is not bound by agency’s interpretation of governing statute, even though we often give deference to that interpretation); Smith v. Smith, 517 N.W.2d 394, 397-98 (Neb. 1994).  The issue of whether resources in a trust are available to a beneficiary for determining his or her eligibility for medical assistance purposes is also a question of law.  In re Carlisle, 498 N.W.2d 260, 263 (Minn. App. 1993).  The trust beneficiary has the burden to establish that a trust is not an available asset.  Id.

            Enactment of Minn. Stat. § 501B.89

            Minnesota courts have long recognized that placing assets in a trust for the support of another person but withholding consideration of those resources for that person’s medical assistance eligibility is generally disfavored as against public policy.  McNiff v. Olmsted County Welfare Dep’t, 287 Minn. 40, 44-45, 176 N.W.2d 888, 892 (1970).  The broad policy is clear:  persons who have the means should pay for their health care and not shelter available resources in order to enrich their heirs.  See Kindt, 542 N.W.2d at 398.

            In 1992, the Minnesota legislature enacted Minn. Stat. § 501B.89, to solidify its position concerning trusts that were structured to limit payments in cases where a beneficiary was eligible for public assistance.  1992 Minn. Laws ch. 513, art. 7, § 129.  In particular, this statute states that

a provision in a trust that provides for the suspension, termination, limitation, or diversion of the principal, income, or beneficial interest of a beneficiary if the beneficiary applies for, is determined eligible for, or receives public assistance or benefits under a public health care program is unenforceable as against the public policy of this state, without regard to the irrevocability of the trust or the purpose for which the trust was created.

Minn. Stat. § 501B.89, subd. 1 (2004).

            The statute was further amended during the 1993 legislative session to allow a narrow exception for “supplemental needs” trusts, which are designed to assist people with disabilities when public assistance programs would fall short of meeting their basic needs and reasonable living expenses.  Minn. Stat. § 501B.89, subd. 2.  To qualify as a special needs trust, the person must be disabled when the trust is created, the trust’s general purpose “must be to provide for the reasonable living expenses and other basic needs of a person with a disability when benefits from publicly funded benefit programs are not sufficient to provide adequately for those needs,” and the trust “must contain provisions that prohibit disbursements that would have the effect of replacing, reducing, or substituting for publicly funded benefits.”  Minn. Stat. § 501B.89, subd. 2(d).

            Minn. Stat. § 501B.89, including the 1993 amendments, applies to all trusts created after July 1, 1992.  Because the trust at issue here was created in 1993, it is subject to this statute.

            Flygare Trust Provisions

            In relevant part, the trust provides:

D.        The FAMILY SHARE shall be transferred to my trustees . . . and shall be administered and distributed as follows:

First:  The net income of this trust shall be paid to my spouse in quarterly or other convenient installments; provided that if my trustee, Marcus R. Flygare, determines that my spouse has adequate other income, said trustee may withhold all or any part of that income and may distribute all or any part thereof to and among my children and their issue in whatever proportions are deemed advisable by my said trustee.  Any net income which is not so distributed shall be accumulated and added to principal for reinvestment.

Second:  In addition to the benefits hereinbefore provided for my spouse, my trustee, Marcus R. Flygare, acting alone and without my spouse for the purposes of this subdivision . . . may in his sole and exclusive discretion during the time this trust is being held for the benefit of my spouse, withdraw installments of principal from this trust from time to time and pay the same to or for the benefit of my spouse as my trustee, Marcus R. Flygare, deems necessary and advisable in order to provide for the proper support and maintenance of my spouse;  provided, nevertheless, that no such sums of principal or income shall be paid to or applied for the benefit of my spouse, except for the assets available to the trustee, in the event my spouse would be eligible for assistance under any government funded program and in such event, no such trust funds shall be so expended, and to or for the benefit of my children, for their support and maintenance. 

Appellant concedes that certain language in the trust violates Minn. Stat. § 501B.89, subd. 1, and cannot be given effect.  Appellant insists that the offending language should simply be stricken or deleted from the trust document and that the settlor’s intent should be reevaluated without that stricken language.  Appellant argues that reconsideration of the trust document without the stricken language makes it clear that the settlor intended the trust to be a discretionary trust, not a support trust, and that its assets should be deemed unavailable to appellant for purposes of determining her eligibility for medical assistance.

            While the parties offered different analyses of the issues, at oral arguments appellant and the commissioner agreed that the initial focus should be on the type of trust involved:  if the trust is a true discretionary trust, its assets are not available for purposes of determining eligibility for medical assistance and the analysis would end there; but if the trust is a support trust, its assets are available and Minn. Stat. § 501B.89 makes any provisions to the contrary unenforceable.[1]

            The issue of whether a trust is a support trust or a discretionary trust is generally an issue of law that we can determine de novo by examining the “four corners of the instrument.”  McNiff, 287 Minn. at 43, 176 N.W.2d at 891; see In re Fiske’s Trust, 242 Minn. 452, 460, 65 N.W.2d 906, 910 (1954) (absent ambiguity, intention of settlor is ascertained from trust instrument in its entirety).  A support trust directs the trustee to distribute trust income or principal as necessary for the support and maintenance of the beneficiary; a discretionary trust, on the other hand, gives the trustee complete discretion to distribute all, some, or none of the trust income or principal to the beneficiary as the trustee sees fit.  Carlisle, 498 N.W.2d at 264 (citing Restatement (Second) of Trusts §§ 154, 155 (1959)).

            The trust here includes language giving the trustee some discretion, but that discretion is limited:  the trustee is directed to act as he “deems necessary and advisable to provide for the proper support and maintenance of my spouse.”  While the trustee maintains discretion to determine the total amount and perhaps the extent of proper support and maintenance, he must consider appellant’s basic needs and has no discretion with regard to making expenditures to meet those basic needs.  See McNiff, 287 Minn. at 43, 176 N.W.2d at 891.  The clear purpose of this trust was to insure that appellant’s basic needs are met:  she thus has the ability to bring an action to compel the trustee to make payments as necessary to provide for her proper support and maintenance.  See United States v. O’Shaughnessy, 517 N.W.2d 574, 577 (Minn. 1994) (even when vested with complete discretion, trustee cannot violate settlor’s intent or trust’s purpose without committing abuse of discretion).  We therefore conclude as a matter of law that this trust is a support trust rather than a discretionary trust.

            Appellant relies heavily upon Carlisle and In re Horton, 668 N.W.2d 208 (Minn. App. 2003), two cases involving trusts created prior to 1992 and enactment of Minn. Stat. § 501B.89, subd. 1.  In Carlisle, 498 N.W.2d at 262, the trust expressly excluded payments for the basic necessities of life—food, clothing, and shelter—and the trustee was under no obligation to make any payments to the beneficiary.  As a result, this court concluded that the trust was discretionary.  Id. at 264-65.  In Horton, 668 N.W.2d at 214, the trust provided that the trustee “may pay” amounts necessary to provide for the proper support and maintenance of the donor or his family.  Nothing in the trust required that the trustee determine the needs of the beneficiaries or insure that those needs were met, and the entire document was in the permissive form.  Id. at 215.  As a result, this court concluded that the trust was discretionary.  Id. at 214-15.

            Here, the trust requires the trustee to consider appellant’s needs and make payments to meet those needs.  Nothing in the trust gives the trustee discretion to ignore appellant’s needs or to refuse to make payments to provide for her basic support.  Accordingly, we distinguish this trust from the trusts in Horton and Carlisle.  We therefore conclude that because the trust is properly characterized as a support trust, the agency did not err in determining that it is an available asset for purposes of determining appellant’s eligibility for medical assistance.

D E C I S I O N

            We affirm the determination that appellant is not eligible for medical assistance benefits.  The county properly determined that the trust of which she is a beneficiary is an asset that is available to provide for her support.

            Affirmed.

——————————————————————————–

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] The county, however, took a slightly different stance, one with which we do not entirely agree.  The county asserts that if Minn. Stat. § 501B.89, subd. 1, applies, then the trust assets are available regardless of whether the trust is a discretionary or support trust.
Minnesota Trust Attorney

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-02-738

In re:

The Estate of Mathew Alan Spangler,

Decedent.

Filed December 24, 2002

Affirmed

Harten, Judge

Washington County District Court

File No. P7-02-400027

Mary M. Huot, Huot & Spangler, P.L.L.P., Merriam Park Professional Offices, 1678 Selby Avenue, St. Paul, MN 55104 (for appellant Evon Spangler)

Peggy L. Stevens, Larry B. Stevens & Associates, 2233 North Hamline, Suite 412, Roseville, MN 55113 (for respondent F. Joseph Williams)

            Considered and decided by Klaphake, Presiding Judge, Kalitowski, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N
 

HARTEN, Judge

Appellant challenges the district court’s order appointing a personal representative for her deceased husband’s estate.  Because we see no error in the district court’s decision to appoint a personal representative, we affirm.

FACTS
On 5 April 2000, Michael Spangler, Timothy Hannon, and William Wilson died in a plane crash in Florida.  All three men were pilots employed by BankAir, Inc. (BankAir).  Spangler and Hannon were preparing to take a flight exam, and Wilson was instructing them.  Spangler was a Minnesota resident.  His widow and sole heir, appellant Evon Spangler, never commenced proceedings to probate her husband’s estate.

In June 2001, Hannon’s parents filed a wrongful death action in Florida against multiple parties, including Spangler’s estate.  They were unable to serve process on the estate, however, because a personal representative had never been appointed.

In January 2002, F. Joseph Williams, acting on behalf of Hannon’s parents, petitioned to begin formal testacy proceedings in Minnesota.  In the petition, Williams stated that he was an “interested person” because Hannon’s parents were “creditors” of Spangler’s estate.  He also stated:

This petition is brought for the purpose of a wrongful death lawsuit brought against the Estate of Matthew Spangler, which is attached hereto.  This negligence action cannot be maintained without the Estate of Matthew Spangler.  There is insurance coverage for the airplane accident, which would cover Matthew Spangler.

Williams included a copy of a liability insurance policy held by BankAir.  The policy indemnified BankAir’s employees from claims asserted by other employees arising out of the use of its aircraft.  Finally, Williams requested that the district court appoint him personal representative of Spangler’s estate.

Appellant formally objected to the appointment of Williams as personal representative of her husband’s estate, arguing that Williams had fraudulently claimed that Hannon’s parents were creditors of Spangler’s estate.  Appellant also asserted that, if the district court needed to appoint a personal representative, she should be appointed.  After a hearing, the district court appointed Williams as personal representative but ordered that appellant would become successor personal representative upon qualification, acceptance and notice to Williams.  Appellant was eventually appointed personal representative.

Appellant now challenges the district court’s order appointing her.  She argues that (1) Williams was not an “interested person” and therefore lacked standing to bring the petition, (2) service on appellant was improper, and (3) Spangler’s estate had no assets.

D E C I S I O N

1.         Standing As Interested Person

Application of a statute to the undisputed facts of a case involves a question of law, and the district court’s decision is not binding on this court.  O’Malley v. Ulland Bros., 549 N.W.2d 889, 892 (Minn. 1996).

Under Minnesota’s Uniform Probate Code, “[a] formal testacy proceeding may be commenced by an interested person * * * filing a petition * * * .”  Minn. Stat. § 524.3-401 (2000).  An “interested person” is defined to include

heirs, devisees, children, spouses, creditors, beneficiaries and any others having a property right in or claim against the estate of a decedent, ward or protected person which may be affected by the proceeding.  It also includes * * * other fiduciaries representing interested persons.  The meaning as it relates to particular persons may vary from time to time and must be determined according to the particular purposes of, and matter involved in, any proceeding.

Minn. Stat. § 524.1-201(24) (2000) (emphasis added).  The term “interested person,” like all provisions of the probate code, is to be liberally construed.  See Minn. Stat. § 524.1-102(a) (2000) (provisions of probate code are to be liberally construed); see also In re Eklund’s Estate, 174 Minn. 28, 33, 218 N.W. 235, 237 (1928) (construing predecessor statute and stating that “[i]t is now well settled in this state that a literal, strict construction is not to be placed upon the words ‘person interested in the estate’”).

Minn. Stat. § 524.3-803 (2000) concerns limitations on the presentation of claims against an estate.  The statute provides:

                        Nothing in this section affects or prevents: * * *

                        any proceeding to establish liability of the decedent or the personal representative for which there is protection by liability insurance, to the limits of the insurance protection only[.]

Minn. Stat. § 524.3-803(c)(2).  The district court relied on this statute and implicitly found that Williams was an interested person when it granted his petition.  The district court concluded that

[t]he appointment of a personal representative of the Estate is necessary for the Florida Court to reach the decision whether [Spangler’s] estate is liable for anything from which his estate is protected by liability insurance.

See also Minn. Stat. § 524.3-104 (2000) (a proceeding to enforce a claim against an estate may not be commenced “before the appointment of a personal representative”).  The legislature has explicitly recognized the validity of proceedings against an estate for which there is protection by liability insurance.  We conclude that the district court did not err in finding that Williams was an interested person and appointing a personal representative so that such a proceeding could commence.

2.         Notice of Appointment Proceedings

            In proceedings for the formal appointment of a personal representative, Minn. R. Gen. Pract. 404(b) provides that

[m]ailed notice shall be given to * * * all interested persons as defined by the code * * * and shall include in appropriate cases * * * lawyers representing the interested persons.

Although appellant received notice of the proceedings, she argues that service was improper because her Florida attorney did not receive notice.  Minn. Stat. § 524.1‑401(d) (2000), however, states that “[n]o defect in any notice * * * shall limit or affect the validity of the appointment * * * of the personal representative.”  Appellant received notice, and Williams’s failure to send notice to appellant’s Florida attorney does not affect the validity of the district court’s appointment of a personal representative.

3.         Lack of Assets

            Appellant argues that no personal representative should have been appointed because the estate had no assets.  An appellate court will reverse a district court’s findings of fact “only when those findings are clearly erroneous.”  Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 102 (Minn. 1999) (citing Minn. R. Civ. P. 52.01).  “Findings of fact are considered clearly erroneous only if they are not reasonably supported by the evidence.”  Id.  The district court found that Spangler’s estate included at least some assets.  The record supports this finding; appellant admitted that Spangler left an automobile worth $900.

            We conclude that the district court did not err in appointing a personal representative.

            Affirmed.

Washington County Wrongful Death

IN SUPREME COURT

A03-797

Court of Appeals

Blatz, C.J.

Matthew Radke, as trustee for the next of kin of

Makaio Lynn Radke,

                                    Appellant,

v.

                                                                                                                                            Filed: April 21, 2005
                 Office of Appellate Courts
County of Freeborn, et al.,

                                    Respondents.

S Y L L A B U S

            A cause of action exists for wrongful death based on the alleged negligence of the county and two county child protection workers in the investigation of child abuse and neglect reports as required by the Child Abuse Reporting Act, Minn. Stat. § 626.556 (2004).

            Reversed and remanded.

            Heard, considered, and decided by the court en banc.

O P I N I O N

BLATZ, Chief Justice.

            The issue in this case is whether a negligence cause of action can be maintained for the intervention and investigation of reports of suspected child abuse and neglect as required under the Child Abuse Reporting Act, Minn. Stat. § 626.556 (2004) (CARA).  Appellant Matthew Radke (appellant), as trustee for the next of kin of his son Makaio Lynn Radke (Makaio), brought a wrongful death action against Freeborn County and two county child protection workers alleging that they negligently investigated reports of suspected abuse of Makaio.  The district court granted respondents’ motion to dismiss for failure to state a claim upon which relief can be granted under Minn. R. Civ. P. 12.02(e).  The court of appeals affirmed, holding that the “legislature did not expressly or impliedly create a civil cause of action under the Child Abuse Reporting Act.”  Radke v. County of Freeborn, 676 N.W.2d 295, 301 (Minn. App. 2004).  We hold that a cause of action can be maintained for negligence in the investigation and intervention of child abuse and neglect reports as required under CARA.  We therefore reverse and remand.

            Nineteen-month-old Makaio was beaten to death on April 21, 2001 by Paul Gutierrez, a friend of his mother’s.  During the months preceding Makaio’s tragic death, he was the subject of a child abuse and neglect investigation by the Freeborn County Department of Human Services.[1]   At the time of his death, Makaio’s parents had separated and were in the process of dissolving their marriage.  In January 2001, appellant had moved out of the family’s home and Makaio was living with his mother, Peggy Radke (Radke), and two other adults, Gutierrez and Kristina Baker.  Upon learning that Gutierrez was living at the home, appellant become concerned and called the Albert Lea Police Department to make a complaint on January 20, 2001. 

            On February 28, 2001, appellant brought Makaio to the Albert Lea Medical Center where a doctor examined Makaio.  Based on his examination of Makaio, which revealed that Makaio had lesions behind his ears and bruises on his cheeks, the doctor reported suspected child abuse and neglect to the Freeborn County Human Services Department.  In response to that report, Tammy Ressler, a Freeborn County child protection worker, visited Radke’s residence on March 2, 2001.  Radke told Ressler that Makaio’s injuries were caused by a fall.  Ressler did no further investigation and took no protective action on behalf of Makaio. 

On March 21, 2001, appellant brought Makaio to the Albert Lea Police Department after he discovered bruising on Makaio’s testicles.  The police reported the suspected abuse to the county the next day.[2]  After the police took photographs, appellant again took Makaio to the Albert Lea Medical Center.  The doctor who examined Makaio at the medical center noted Makaio’s injuries which included abrasions on his head, a bruise on his jaw and his back, and wounds on his thigh and foot which resembled burns.  Based on this examination of Makaio, the doctor also reported suspected abuse to the county. 

In response to these reports, Ressler again visited Makaio at Radke’s home on March 26, 2001.  Radke told Ressler that the mark on Makaio’s foot was caused by “hand-foot-and-mouth disease.”  Ressler apparently accepted this explanation, despite the fact that the doctor who examined Makaio diagnosed his injuries as resembling a burn.  Although Ressler observed Gutierrez present in the home and talked to him briefly, she did not question him about Makaio.  No further investigation was conducted at that time, nor was any protective action undertaken. 

Shortly thereafter, on April 10, 2001, appellant received a letter from Ressler advising him that the Freeborn County Department of Human Services had determined that no abuse had occurred and that child protective services were not necessary.  The following day, appellant again contacted the Albert Lea Police Department to report his concern that Makaio was being abused.  Two days later, Makaio’s guardian ad litem also contacted the police after she visited the Radke home and observed that Makaio had some bruises on his face.  The guardian ad litem took photographs of the bruising and reported to the police that Radke had claimed that the bruising occurred the night before while Makaio was in the bathtub. 

It was not until April 20, 2001, seven days after the guardian ad litem reported suspected abuse to police and nine days after appellant’s report, that the county took any steps to investigate.  On that date, Lisa Frank, a second county child protection worker, visited Makaio at Radke’s home at approximately 11:00 a.m.  Present at the home during the visit were Radke, Makaio, Makaio’s sister, Baker, and Baker’s child.  Frank was aware of the prior reports of abuse, and observed a small bruise on Makaio’s left temple, a similar bruise on his rib cage, a third bruise on his backbone just above his diaper, and a healing injury to his foot.  Frank also observed that Makaio was lethargic and had a runny nose.  After a half-hour visit, Frank departed without instituting any precautionary measures and left Makaio with Radke at the home. 

Later that day, Radke and Baker went out leaving Gutierrez in charge of Makaio, Makaio’s sister, and Baker’s child.  Radke and Baker returned home at about 1:00 a.m.  The next morning, Radke brought Makaio to the medical center where he was pronounced dead at 10:19 a.m.  An autopsy conducted by the Ramsey County Medical Examiner determined that Makiao had died 10 to 12 hours before he was confirmed dead at the hospital.  Makaio had multiple bruises on his face, back, legs, arms, lower extremities and head.  Makaio also had multiple fractures of his ribs, sub-subcutaneous emphysema, a small abrasion on the back of his head, and a laceration on the edge of his rectum.  Gutierrez was subsequently convicted of two counts of first-degree murder by criminal sexual conduct and by child abuse, and one count of second-degree murder.  We affirmed his convictions.  State v. Gutierrez, 667 N.W.2d 426 (Minn. 2003).

Appellant was appointed trustee and next of kin of Makaio by order of the Freeborn County District Court on December 18, 2002.  Shortly thereafter, appellant commenced this wrongful death negligence action against Freeborn County and the county’s child protection workers Frank and Ressler, individually and in their capacities as employees of Freeborn County.  Radke and Gutierrez were also named in the suit, but did not respond to the complaint and are not parties to this appeal.

Pursuant to Minn. R. Civ. P. 12.02(e), respondents Freeborn County, Frank, and Ressler moved to dismiss for failure to state a claim upon which relief can be granted.  On June 2, 2003, the district court granted the respondents’ motion to dismiss.  The court of appeals affirmed the dismissal holding that “[t]he legislature did not expressly or impliedly create a civil cause of action” under CARA.  Radke, 676 N.W.2d at 301.  We granted review to answer the question of whether a cause of action exists for the wrongful death of a child alledgedly caused by the negligent investigation of child abuse or neglect reports by the county and two county child protection workers.     

Review of a case dismissed for failure to state a claim upon which relief can be granted is limited to whether the complaint sets forth a legally sufficient claim for relief.  Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn. 2003).  An appellate court reviews the claim’s legal sufficiency de novo and, in doing so, the facts of the complaint are accepted as true and all reasonable inferences are construed in favor of the nonmoving party.  Id.  We will not uphold a Rule 12.02(e) dismissal “if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded.”  N. States Power Co. v. Franklin, 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963).

Relying heavily on Cracraft v. City of St. Louis Park, 279 N.W.2d 801 (Minn. 1979), appellant argues that a special relationship existed between the county, its child protection workers, and Makaio because, under the factors established in that case, CARA created a special duty requiring respondents to act with due care in investigating reports of abuse.  Appellant also relies on our decision in Andrade v. Ellefson, 391 N.W.2d 836 (Minn. 1986), in which we applied the Cracraft factors and held that the county owed a special duty to children who were injured in a county-licensed home day care facility.  Respondents, however, argue that no cause of action can be maintained under CARA as it is very similar to the Vulnerable Adults Reporting Act, Minn. Stat. § 626.557 (2004) (VARA), the statute at issue in Hoppe v. Kandiyohi County, 543 N.W.2d 635 (Minn. 1996), where we held that no cause of action could be maintained under VARA.

Generally, a person has no common law duty to prevent a third person from injuring another unless there is some kind of special relationship.  Andrade, 391 N.W.2d at 841; Restatement (Second) of Torts § 315 (1965).  Applying this principle to governmental torts in what is called the “public duty rule” requires that a governmental unit owe the plaintiff a duty different from that owed to the general public in order for the governmental unit to be found liable.  Cracraft, 279 N.W.2d at 806.  In other words, a purely “public duty”—as opposed to a “special duty”—cannot give rise to government tort liability.  Id.  Our decision in Cracraft set out the test for determining whether a special duty exists.  Id. at 806-07.  Under Cracraft, the existence of a statute or ordinance is not sufficient to create a special duty; instead, a special duty of care arises only when “there are additional indicia that the [governmental unit] has undertaken the responsibility of not only protecting itself, but also undertaken the responsibility of protecting a particular class of persons” from the risks associated with a particular harm.  Id. at 806.

The issue before the court in Cracraft was whether a special duty existed on the part of the city under its fire code ordinance.  Id. at 803.  In Cracraft, two children died and one child was injured when a 55-gallon drum of duplicating fluid ignited on the loading dock of a high school.  Id.  The suit against the city brought on behalf of two of the children by their parents alleged negligence because of the failure of a city fire inspector to discover the drum on the loading dock—a violation of the city’s fire ordinance—at the high school during an inspection conducted a few weeks earlier.  Id. at 802. 

In determining whether a special duty existed in Cracraft, we listed four factors to be considered:

(1)  Whether the governmental unit had actual knowledge of the dangerous condition;

(2)  Whether there was reasonable reliance by persons on the governmental unit’s representations and conduct (such reliance must be based on specific actions or representations which cause the persons to forego other alternatives of protecting themselves);

(3)  Whether an ordinance or statute set forth mandatory acts clearly for the protection of a particular class of persons rather than the public as a whole; and

(4)  Whether the governmental unit used due care to avoid increasing the risk of harm.

Id. at 806-07.  In setting out the four factors, we were careful to note that the factors were not exhaustive and that we were not creating a “bright line test.”  Id. at 806.  After analyzing the facts of the case within this framework, we concluded that none of the four factors were present in Cracraft and thus refused “to impose a duty of care merely because an inspection is undertaken.”  Id. at 808.

Subsequently in Andrade v. Ellefson, we applied the same four-factor test and held that the county had a special duty of care to the children injured in the county-licensed home day care facility.  391 N.W.2d at 843.  The underlying statute at issue in Andrade was the Public Welfare Licensing Act, Minn. Stat. §§ 245.781-245.812, 252.28, subd. 2 (1984) (PWLA).  The PWLA required that certain day care facilities obtain annual licenses and, as part of the licensing process, the county sent inspectors to the applicant’s facility.  Andrade, 391 N.W.2d at 838.  Additionally, in response to complaints of overcrowding, the county conducted two unannounced inspections of the day care facility.  Id.  During one of the unannounced inspections, the county inspector found more than the maximum number of children in the facility than the license allowed.  Id.  The county inspector nevertheless continued to recommend approval of the license.  Id. at 838-39.  Two children were eventually injured at the day care facility—one child sustained a skull fracture and developed epilepsy and the other child sustained a subarachnoid hemorrage, an injury consistent with a violent fall or shaking, and an arm fracture.  Id. at 837.

The injured children and their parents filed suit against the county for negligence in supervising, inspecting, and recommending relicensing of the day care facility where the children were injured.  Id.  On appeal from the trial court’s grant of summary judgment for the county, we applied the Cracraft factors and concluded that the county owed a special duty to the children in the county-licensed day care facility.  Andrade, 391 N.W.2d at 841-43.  In doing so, we concluded that the first factor—actual knowledge of a dangerous condition—was “arguably met partially” because there was “some evidence that the county had actual knowledge of overcrowding.”  Id. at 841-43.  We then concluded that the second and fourth factors—reasonable reliance and increasing the risk of harm, respectively—were not met.  Id. at 842-43.  However, we concluded that the third factor—that the ordinance or statute set forth mandatory acts for the protection of a particular class of persons—was “so overwhelmingly dominant” that we had “no difficulty” in finding a “special relation” existed between the county and the children in the home day care facilities it inspected for licensure.  Id. at 843.  We then held that the county owed a special duty to the injured children, emphasizing that “the [Public Welfare Licensing] Act clearly mandates that small children in a licensed day care facility are a particular protected class” and that the class consisted of “uniquely vulnerable persons.”  Id. at 842.  Thus, the statute was “doing more than benefiting the general public * * * as its immediate concern is for the children.”  Id. at 842.      

Ten years later, in Hoppe v. Kandiyohi County we were presented with the question of whether VARA, could form the basis for a civil cause of action in negligence.  543 N.W.2d at 635.  In Hoppe, the guardian of an elderly woman brought an action against Kandiyohi County for its negligent investigation and intervention after the county received reports of financial abuse of Hoppe by Paul Bengston, a former bank employee with power of attorney.  Id. at 637.  The county waited six months after the initial report of suspected abuse was filed before interviewing Hoppe and determining her competency.  Id.  In the meantime, Bengston continued writing checks to himself from Hoppe’s account.  Id.  Hoppe’s guardian sued, alleging that as a result of the county’s failure to perform its investigatory and intervention duties as required by VARA, Hoppe sustained monetary damages for the amounts converted from her bank account.  Id. 

In Hoppe, without directly applying the Cracraft factors, we distinguished Andrade by stating: 

Implicit in [our holding in Andrade] was our recognition that the licensing procedure entails a detailed inspection and evaluation of an applicant facility and an ultimate determination of fitness to operate this service, i.e., that the licensing requirements were adopted to “ensure a safe environment for children” in accordance with Minn. Stat. § 245.802, subd. 4 (1984), and our concern that the abuse of which the children complained occurred in the facility itself. 

Hoppe, 543 N.W.2d at 638.  We then concluded that no cause of action could be maintained because the legislature did not “explicitly or by implication identif[y] a civil cause of action for alleged negligent investigation or intervention” in VARA.  Id. 

            In the instant case, the court of appeals acknowledged that the “law is not clear cut,” but concluded that, given the similarity between CARA and VARA and our holding in Hoppe that no cause of action could be maintained under VARA, no cause of action could be maintained under CARA.[3]  Radke, 676 N.W.2d at 300.  The statutes at issue in Hoppe and in the present case, VARA and CARA respectively, while not identical, are similar.  Compare Minn. Stat. § 626.557 (2004) with Minn. Stat. § 626.556 (2004).  Here, however, we also have considerations which closely resemble the considerations we relied on in Andrade when we found a cause of action did exist.  See Andrade, 391 N.W.2d at 843.  For example, like the licensing statute at issue in Andrade, CARA was adopted to ensure a safe environment for children.  Moreover, as was the case in Andrade, the abuse complained of in the current case occurred in a home that was the subject of the investigation by the county.  Therefore, insofar as we relied on these distinctions between Hoppe and Andrade in concluding that there was no cause of action in Hoppe, the same reasoning does not distinguish Andrade from the present case.  Further, the question of whether a statute creates a special duty is answered on a case-by-case basis by applying the Cracraft factors to the facts of the case.  See Cracraft, 279 N.W.2d at 807 (stating “[a]pplying these factors to this case, we find no evidence in the record indicating that a duty was assumed or a special duty was created.”); Andrade, 391 N.W.2d at 841. 

Given this background and our precedent, we turn then to applying the Cracraft factors to discern if the county owed a special duty under CARA.  We first note that three of the Cracraft factors require an analysis of the facts of the case:  whether the county had actual knowledge of the dangerous condition (factor one); whether there was reasonable reliance on the county’s representation (factor two); and whether the county increased the risk of harm (factor four).  To the extent that the Cracraft analysis relies on the particular facts of the case, our analysis in this appeal from a 12.02(e) dismissal is limited to the facts set forth in the complaint.  See Bodah, 663 N.W.2d at 553.   In contrast, factor three—mandatory acts for the protection of a particular class—involves an analysis of the statute alone.  Thus, we will begin our discussion with this factor.   

The third factor used to determine if a special duty exists is whether the statute sets forth mandatory acts that are for the protection of a particular class of persons and not the public in general.  CARA requires that certain persons, including medical professionals, clergy, and law enforcement personnel, who know or have reason to believe that child abuse or neglect is occurring, report such information immediately.  Minn. Stat. § 626.556, subd. 3(a).  The statute also facilitates voluntary reporting from any other person suspecting child abuse or neglect.  Id. at subd. 3(b).  Reports made under CARA must be specific and contain “sufficient content to identify the child, any person believed to be responsible for the abuse or neglect of the child if the person is known, the nature and extent of the abuse or neglect and the name and address of the reporter.”  Id. at subd. 7.

Once a report is received, CARA mandates that the proper authority investigate the report.  Id. at subd. 10(a).  According to the statute, when the local welfare agency receives a report, “the local welfare agency shall immediately conduct an assessment * * * and offer protective social services for purposes of preventing further abuses, safeguarding and enhancing the welfare of the abused or neglected minor, and preserving family life whenever possible.”  Id. (emphasis added).  The statute further provides:  “When necessary the local welfare agency shall seek authority to remove the child from the custody of a parent, guardian, or adult with whom the child is living” and the “local welfare agency shall collect available and relevant information to ascertain whether maltreatment occurred and whether protective services are needed.”  Id. at subd. 10(a), (h) (emphasis added).  In addition, the statute states that “[e]ach agency shall prepare a separate report of the results of its investigation.”  Id. at subd. 10(a) (emphasis added).      

The statute clearly and repeatedly requires the performance of mandatory acts.  These mandatory acts prescribed by the statute are for the protection of a particular class of persons—children who are identified as abused or neglected.  In fact, the express public policy set forth in the statute is “to protect children whose health or welfare may be jeopardized through physical abuse, neglect, or sexual abuse.” Id. at subd. 1.  The statute further emphasizes that

it is the policy of this state to require the reporting of neglect, physical or sexual abuse of children in the home, school, and community settings; to provide for the voluntary reporting of abuse or neglect of children; to require the assessment and investigation of the reports; and to provide protective and counseling services in appropriate cases.

Id.  Based on these declared public policy goals, we conclude that the acts mandated in CARA are not for the protection of the public or even children in general, but are mandated for the protection of a particular class of persons—children who are identified in suspected abuse or neglect reports received by the county.[4]  Like the class of persons in Andrade, the children protected by CARA are “uniquely vulnerable persons.”  These children have been identified by suspected child abuse or neglect reports.  They are especially vulnerable because they are alleged to have suffered abuse or neglect in the privacy of their homes, often at the hands of a parent or other family member, and cannot protect themselves.  Therefore, we hold that the third factor clearly is met in this case. 

            As noted above, we have only the facts in the complaint before us and are thus limited in our analysis of the remaining Cracraft factors.  We accept those facts as true and draw all reasonable inferences in favor of the nonmoving party—here, appellant.  See Bodah, 663 N.W.2d at 553.  Within this constricted framework, we offer the following observations regarding the remaining Cracraft factors. 

The first Cracraft factor requires that the county have actual knowledge of the dangerous condition.  Cracraft, 279 N.W.2d at 806.  According to the complaint, the county received numerous reports of suspected abuse of Makaio from appellant, the police, doctors, and Makaio’s guardian ad litem.  Accordingly, because we draw all reasonable inferences in favor of the nonmoving party on appeal from a motion to dismiss, actual knowledge on the part of the county is established. 

            The second Cracraft factor requires reasonable reliance on the county’s representations and conduct.  Cracraft, 279 N.W.2d at 806-07.  Such reliance must be based on specific actions or representations which cause the person to forego other alternatives of protection.  Id. at 807.  Given the limited facts before us, we cannot conclusively say whether this factor is met.  However, given the repeated reports to the county detailed in the complaint, we find it difficult to speculate as to what more appellant could have done. 

Finally, the fourth Cracraft factor requires an analysis of whether the county has increased the risk of harm.  The limited facts before us suggest that this factor is not established.  Such a conclusion is not a bar, however, from this case going forward.  As we clearly stated in Andrade, all four factors need not necessarily be met for a special duty to exist.  391 N.W.2d at 841; see also Cracraft, 279 N.W.2d at 806 (noting that the factors listed do not create a “bright line” test and are not exhaustive).  Here, the third factor is “overwhelmingly dominant.” See Andrade, 391 N.W.2d at 843 (stating “this third factor is so overwhelmingly dominant that we have no difficulty in finding a ‘special relation’ exists between the county and the small children in the day care homes that it inspects for licensure.”).  Accordingly, we hold that based on the application of the Cracraft factors to the facts of this case, respondents owed a special duty to Makaio once they received reports identifying him as a suspected victim of abuse.   

Our holding embraces the reasoning set forth in Cracraft and Andrade and conforms with the majority of other jurisdictions recognizing a duty on the part of social service agencies to investigate reports of child abuse and neglect.[5]  From the clear language of CARA, it is manifest that the legislature intended to provide safety and protection for children in abusive and neglectful situations and for the county social services department and its child protection workers to act immediately when they receive specific reports of abuse or neglect.  See Minn. Stat. § 626.556, subd. 10(a) (“[T]he local welfare agency shall immediately conduct an assessment * * *.”).  Given this express intent, it is incongruous to conclude that the legislature intended to impose criminal penalties on those persons who fail to report as mandated under the statute, but intended that there be no duty on the part of the county welfare department or its employees to investigate or act on the reports.  See Minn. Stat. § 626.556, subd. 6 (providing for misdemeanor, gross misdemeanor, or felony sanctions for failure to report under the statute).  We believe that the statute, taken as a whole, leads to the inescapable conclusion that respondent county and its employees had a duty to act.[6]  This conclusion is further supported by CARA’s statutory provision granting immunity to “person[s] with responsibility for performing duties” under the statute if the person is “acting in good faith and exercising due care.” See Minn. Stat. § 626.556, subd. 4(b).  This language suggests that the subject of the statute had a duty to act.   

We recognize that our holding here overrules our decision in Hoppe.  Nonetheless, given the vitality of Cracraft and Andrade, the facts of this case have made it clear that it is impossible to harmonize Hoppe with Cracraft and Andrade; therefore Hoppe cannot stand.  To decide otherwise would eviscerate the legal principles regarding special duties set forth in Cracraft and Andrade.   

Accordingly, we hold that a cause of action can be maintained for negligence in the investigation of child abuse and neglect reports as required under CARA.  The court of appeals’ decision affirming the dismissal of appellant’s complaint is reversed and the case is remanded to the district court for further proceedings in accordance with this opinion. 

Reversed and remanded.

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[1]           Because this appeal arises in the context of a Rule 12.02(e) motion, all of the facts are taken from the complaint.  See Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn. 2003).

[2]           CARA requires that the “police department or the county sheriff, upon receiving a report * * * immediately notify the local welfare agency or agency responsible for assessing or investigating the report, orally and in writing.”  Minn. Stat. § 626.556, subd. 3(a).

[3]           While not central to its holding, the court of appeals attempted to reconcile Andrade and Hoppe by applying immunity law and stating that “it appears that the Minnesota Supreme Court in Andrade looked at the day care checklist as ministerial”—i.e., no immunity—“but in Hoppe found the decision-making to be discretionary”—i.e., the county was immune.  Radke, 676 N.W.2d at 300.  This distinction is incorrect as we in Andrade stated that the county was immune, but that the county had waived immunity.  391 N.W.2d at 843.  Further, the distinction noted by the court of appeals relates to the question of governmental immunity and not the existence of a special duty.  Although immunity may be a relevant factor in determining whether appellant can ultimately recover, it is not currently before us.  If anything, the grant of immunity under the statute for actions done in “good faith,” see Minn. Stat. § 626.556, subd. 4, suggests that the subject of the statute had a duty to act in the first place.

[4]           Other courts considering the issue of whether a child protection statute creates a public duty or special duty have also concluded that such statutes are intended to protect a specific class of children, i.e. those suspected of suffering abuse or neglect.  See, e.g., Horridge v. St. Mary’s County Dep’t of Soc. Servs.,  854 A.2d 1232, 1244 (Md. 2004) (“Clearly, the essential purpose of the statutory duties created by [the Maryland child abuse prevention statute] and the implementing regulations of the Department of Human Resources was to protect a specific class of children * * *.”); Brodie v. Summit County Children Servs. Bd., 554 N.E.2d 1301, 1308 (Ohio 1990) (“[T]he action required by the statute is not directed at or designed to protect the public at large, but intended to protect a specific child who is reported as abused or neglected.”); Mammo v. State, 675 P.2d 1347, 1351 (Ariz. Ct. App. 1983) (concluding that the Arizona child protection statute “is quite specific and sets forth duties on the part of protective services workers which are clearly for the protection of threatened individuals”). 

[5]           See Mammo, 675 P.2d at 1350-51; Dep’t of Health and Rehab. Servs. v. Yamuni, 529 So.2d 258, 261-62 (Fla. 1988); Horridge, 854 A.2d at 1238-40; Brodie, 554 N.E.2d at 1308-09; Jensen v. Anderson County Dep’t of Soc. Servs., 403 S.E.2d 615, 619 (S.C. 1991); Owens v. Garfield, 784 P.2d 1187, 1191-92 (Utah 1989); Sabia v. State, 669 A.2d 1187, 1191-92 (Vt. 1995); Yonker v. Wash., 930 P.2d 958, 963 (Wash. Ct. App. 1997);  see also Susan Abbott, Note, Liability of the State and its Employees for the Negligent Investigation of Child Abuse Reports, 10 Alaska L. Rev. 401 (1993); Jason This, Casenote, Brodie v. Summit County Children Services Board:  A Statutory Duty Exception to the Public Duty Rule for Children Service Agencies, 17 Ohio N.U. L. Rev. 711 (1991).

[6]           We are aware that this case is currently before us on a Rule 12.02(e) motion to dismiss, that discovery will continue on remand, and that the county and its employees may raise defenses of immunity.  Nonetheless, as pleaded, we have significant concerns about the actions of the county and its employees and whether they protected the child as required under the statute. 

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1018

In re The Irrevocable Supplemental Needs Trust

of Jennifer Collins created pursuant to Court Order

dated February 2, 1998.

Filed ­­­December 14, 2004

Reversed

Harten, Judge

Ramsey County District Court

File No. C8-98-200011

Randy F. Boggio, Theresa M. Lewis, Garvey & Mathison, P.A., 9995 Lyndale Avenue South, Bloomington, MN 55420 (for appellant Stephen M. Collins)

Carrie Bender, 121 – 83rd Avenue Northeast, Apartment #110, Fridley, MN 55432 (pro se respondent)

            Considered and decided by Harten, Presiding Judge; Klaphake, Judge; and Stoneburner, Judge.

U N P U B L I S H E D   O P I N I O N
 

HARTEN, Judge

            Appellant, trustee and father of the beneficiary of a supplemental needs trust, appeals from an order disallowing certain discretionary disbursements made on behalf of the beneficiary.  Because we conclude that appellant did not abuse his sole discretion as trustee in making those disbursements, we reverse. 

FACTS
 

Jennifer Collins, age 15, suffered personal injuries from injections of Gammagard, produced by Baxter Healthcare Corporation.  The resulting litigation was settled, and Jennifer became the beneficiary of a trust account established with the proceeds of the settlement.  Her father, appellant Stephen Collins, was named trustee.  The trust document provided in relevant part:

It is the intent of this agreement to create a Supplemental Needs Trust for the benefit of Jennifer Collins. . . . The purpose of the Trust is to provide for Jennifer Collins’ reasonable living expenses and other needs when benefits from publicly funded benefit programs are not sufficient to provide adequately for those needs. . . . The Trustee shall expend such sums from the principal of the Trust to or for the benefit of Jennifer Collins only for purposes which supplement benefits from publicly funded programs.  Such expenditures may include but are not necessarily limited to entertainment, education, vacations and travel, comfort, convenience and reasonable luxuries, as the Trustee, in the Trustee’s sole discretion, deems advisable. . . . The Trustee may also pay for . . . companion services. . . .

            After five years, appellant petitioned for court approval of the first five annual accountings.  While much of the money disbursed was for administrative expenses and in-home care for Jennifer, a number of disbursements were made for non-medical purposes.  Following a hearing, the district court disallowed a total of $2,093.  Some disallowances were partial, for disbursements that had benefited family members other than Jennifer; those disallowances are not challenged on appeal.[1] 

            The district court also denied a December 2000 disbursement of $1,000 for a child’s snowmobile and a October 2001 disbursement of $123 for Britney Spears concert tickets.  After learning from appellant that he supports himself and his family by working in a machine shop, the district court ordered him to repay the trust at the rate of $200 monthly.  Appellant challenges only the disallowances of $1,000 for the snowmobile and $123 for Britney Spears concert tickets.  

D E C I S I O N

            This court reviews a district court’s exercise of its equitable jurisdiction over a charitable trust under an abuse-of-discretion standard.  In re Ruth Easton Fund, 680 N.W.2d 541, 547 (Minn. App. 2004).  A decision that is arbitrary, capricious, or not in conformity with law is an abuse of discretion.  Id.  Courts will not substitute their discretion for that of a trustee except when necessary to remedy an abuse of discretion.   In re Trusts A & B of Divine, 672 N.W.2d 912, 919  (Minn. App. 2004).

            In Divine, this court adopted six factors for determining whether a trustee has abused discretion: 

(1) the extent of the discretion conferred upon the trustee by the terms of the trust; (2) the purposes of the trust; (3) the nature of the power; (4) the existence or non-existence, the definiteness or indefiniteness, of an external standard by which the reasonableness of the trustee’s conduct can be judged; (5) the motives of the trustee in exercising or refraining from exercising the power;  and (6) the existence or nonexistence of an interest in the trustee conflicting with that of the beneficiaries.

  Id. at 919-20 (quotation omitted); see also Cox v. Mid-America Dairymen, Inc., 965 F.2d 569, 572 (8th Cir. 1992) (reflecting eighth circuit’s adoption of the same factors).  An analysis of the factors does not indicate that appellant abused his discretion.

            1.         Extent of Appellant’s Discretion.  The trust gave appellant “sole discretion” to make expenditures for Jennifer’s “entertainment, education, vacations and travel, comfort, convenience and reasonable luxuries.”  Both the snowmobile and the concert tickets fall into the “entertainment” category. 

            2.         Trust Purposes. The purpose of this trust is “to provide for Jennifer Collins’ reasonable living expenses and other needs when benefits from publicly funded benefit programs are not sufficient . . . .”  Purchasing the snowmobile and the concert tickets did not conflict with that purpose; neither could have been acquired through a publicly funded benefit program. 

            3.         Nature of Trustee’s Power.  Appellant clearly had power to make disbursements for Jennifer’s entertainment; the district court implicitly acknowledged this by not objecting to disbursements for, e.g., a bicycle and accessories ($793.36), dance lessons and clothing ($351.56), trampoline safety net ($525), skates ($107.54), sled, boots and socks ($169.20), and various outings ($454.89).

            4.         External Standard.  The record does not reflect any external standard.  Whether a snowmobile and concert tickets were “entertainment” or “reasonable luxuries” for this disabled teenager is a question on which appellant and the district court had different but equally subjective opinions.

            5.         Trustee’s Motives.  Appellant had no discernible motive other than providing for Jennifer’s enjoyment in making these disbursements.  We note that appellant did not appeal from the district court’s disallowances of expenditures that benefited other family members as well as Jennifer.

            6.         Conflict Between Interests of Trustee and Beneficiary.  Appellant testified that Jennifer suffers from “Downs syndrome and immune deficiency with hepatitis C and speech impairment.”  His interest in the disallowed expenditures was providing Jennifer with treats or “reasonable luxuries” that would not otherwise be available to her.  The district court defined Jennifer’s interest as “she needs this [trust] to last her lifetime” and noted that “[Jennifer] may well live to 60” and “her life expectancy is into the 70s at this point.” 

            The district court went on to say,  “[These trusts] were not set up to accomplish trips to Disneyland, snowmobile rides, or anything of that sort.  Dance lessons, yes; memberships in Shoreview’s community center, yes. . . .”  Deciding whether dance lessons are appropriate expenditures for an 11-12 year old, whether a snowmobile is an appropriate expenditure for a 13-year-old, or whether Britney Spears concert tickets are an appropriate expenditure for a 14-year-old requires an exercise of discretion: parents of disabled and nondisabled children are constantly faced with such discretionary decisions.  Appellant is both parent and trustee; we conclude that he exercised, but did not abuse, his “sole discretion” in providing a child’s snowmobile and concert tickets for Jennifer.  The district court substituted its own discretion for appellant’s when it arbitrarily disallowed these expenses from among the many made for Jennifer’s entertainment and “reasonable luxuries.”

            The district court’s decision provides no guidance to appellant as to what entertainment disbursements will be allowed in the future.  The district court approved some disbursements and not others, but provided no clear objective rationale for its decision.

            Reversed.

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[1] The district court’s position on vacation trips was somewhat ambivalent.  Appellant had asked his attorney if a Disney World trip would be an acceptable use of trust funds and was told that it would be, but the district court disallowed $400 of that trip because other family members had gone along.  She allowed $400 for a trip to northern Minnesota, saying, “I understand the need for vacations for anybody,” but, although she also allowed $400 for a trip to Wisconsin Dells, she said, “I’m telling you right now it will not be allowed in the future.”  The district court later added, “I allowed the trips to northern Minnesota and to Wisconsin.  I think . . . those are perfectly fine.  No clear message emerges here.

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