Request for Trust Accounting Denied

December 30, 2010 | Erin Herbold

In this case, the Iowa Court of Appeals was asked to determine whether a 2010 trial court order denying an ex-husband a trust accounting should be set aside. The ex-husband claimed that a 2006 court order quieting title to farmland was inequitable under the 2003 dissolution decree between he and his ex-wife and was not consistent with the trust the parties created after the divorce was final. When the parties divorced in 2003, they transferred all of their assets into a trust for the benefit of the ex-wife. One asset transferred into the trust was farmland. The parties stipulated in the divorce decree that the farmland “shall not be sold” because one-half of the farm land belonged to the ex-husband’s brother. The trust specified that if the ex-wife died, the remaining assets of the trust would be distributed to the ex-husband.

In May 2006, the brother filed a petition to partition the farm land and quiet title to the land. The brother argued that the restriction against the transfer of the land in the ex-spouses’ trust created a situation where he could not sell the property. The brother served the ex-husband by publication. At the time, the ex-husband was residing in China. The court entered a decree quieting title and granted the partition action, stating that the provision in the trust was unfair and unjustly affected the brother’s ownership of the property.

Three years later, the ex-husband came home and filed an application for a trust accounting and alleged that the trustee neglected her duties when she did not prevent the farmland from being sold without notice to the beneficiaries of the trust. The appellate court agreed with the trial court, finding that a trust accounting was not appropriate in this case, because the brother held a half-interest in the farmland which the trust could not interfere with. The trustee had already provided an accounting regarding the action and the ex-husband never provided anyone with his address in China.   In re Palmer Trust, No. 0-893/10-0944 (Iowa Ct. App. Dec. 22, 2010).