In re Estate of Hedke

I n re estate of L eona M. H edke , deceased.
JoHn nowak , specIaL adMInIstrator of tHe estate of doLores
nowak , deceased, appeLLant and cross -appeLLee , and natHan
a. scHneIder , conservator of L eona M. H edke , appeLLee
and cross -appeLLee , v. cHarLes H edke , as trustee
of tHe L eona M. H edke revocabLe trust, dated
deceMber 30, 2004, as attorney In fact for
L eona M. H edke , and IndIvIduaLLy,
appeLLee and cross -appeLLant.
775 N.W.2d 13
Filed October 23, 2009. 	No. S-08-980.
1. Decedents’ Estates: Appeal and Error. Absent an equity question, an appellate
court reviews probate matters for error appearing on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appear-
ing on the record, the inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary, capricious, nor
unreasonable.
3. Decedents’ Estates: Appeal and Error. In reviewing a judgment of the probate
court in a law action, an appellate court does not reweigh evidence, but considers
the evidence in the light most favorable to the successful party. And an appel-
late court resolves evidentiary conflicts in favor of the successful party, who is
entitled to every reasonable inference deducible from the evidence.
4. ____: ____. The probate court’s factual findings have the effect of a verdict,
and an appellate court will not set those findings aside unless they are clearly
erroneous.
5. Wills: Undue Influence: Proof. To show undue influence, a will contestant must
prove the following elements by a preponderance of the evidence: (1) The testator
was subject to undue influence; (2) there was an opportunity to exercise such
influence; (3) there was a disposition to exercise such influence; and (4) the result
was clearly the effect of such influence.
6. Wills: Undue Influence. Undue influence sufficient to defeat a will is manipula-
tion that destroys the testator’s free agency and substitutes another’s purpose for
the testator’s.
7. Undue Influence: Evidence: Proof. The trier of fact should view the entire
evidence and decide whether the evidence as a whole proves each element of
undue influence.
8. Undue Influence: Proof. A party seeking to prove the exercise of undue influence
is entitled to all reasonable inferences deducible from the circumstances proved.
9. ____: ____. Undue influence rests largely on inferences drawn from facts and
circumstances surrounding the testator’s life, character, and mental condition. In
determining whether undue influence existed, a court must also consider whether
the evidence shows that a person inclined to exert improper control over the
testator had the opportunity to do so.
IN re eSTATe OF hedke 	727
Cite as 278 Neb. 727
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:49 AM CST

10. Undue Influence: Proof: Presumptions. Suspicious circumstances that, when
coupled with proof of a confidential or fiduciary relationship, can give rise to a
presumption of undue influence include: (1) a vigorous campaign by a principal
beneficiary’s family to maintain intimate relations with the testator, (2) a lack
of advice to the testator from an independent attorney, (3) an elderly testator in
weakened physical or mental condition, (4) lack of consideration for the bequest,
(5) a disposition that is unnatural or unjust, (6) the beneficiary’s participation in
procuring the will, and (7) domination of the testator by the beneficiary.
11. Agency. A confidential relationship exists between two persons if one has gained
the confidence of the other and purports to act or advise with the other’s interest
in mind.
12. Actions: Parties: Standing. Whether a party who commences an action has
standing and is therefore the real party in interest presents a jurisdictional issue.
13. Judgments: Jurisdiction: Appeal and Error. A jurisdictional issue that does
not involve a factual dispute presents a question of law, which an appellate court
independently decides.
14. Decedents’ Estates: Actions: Standing. Under the Nebraska Probate Code,
the right and duty to sue and recover assets for an estate reside in the estate’s
appointed personal representative, not the devisees.
15. Trusts: Equity: Appeal and Error. Appeals involving the administration of
a trust are equity matters and are reviewable in an appellate court de novo on
the record.
16. Appeal and Error. In a review de novo on the record, an appellate court
reappraises the evidence as presented by the record and reaches its own indepen-
dent conclusions concerning the matters at issue.
17. Trusts: Agency. Like a power of attorney, a trust creates a fiduciary relationship
regarding property.
18. Agency. A person in a fiduciary relation to another is under a duty to act for the
benefit of the other as to matters within the scope of the relation.
19. Trusts: Agents. A trustee shall administer the trust solely in the interests of
the beneficiaries.
20. ____: ____. A trustee is under a duty not to profit at the expense of the bene-
ficiary and not to enter into competition with him without his consent, unless
authorized to do so by the terms of the trust or by a proper court.
21. Trusts: Agents: Conflict of Interest. except in discrete circumstances, a trustee
is strictly prohibited from engaging in transactions that involve self-dealing or
that otherwise involve or create a conflict between the trustee’s fiduciary duties
and personal interests.
22. Trusts: Fraud: Proof. Unless an exception under Neb. rev. Stat. § 30-3867
(reissue 2008) applies, a beneficiary establishes a prima facie case of fraud
by showing that a trustee’s transaction benefited the trustee at the beneficiary’s
expense. The burden of going forward with evidence then shifts to the trustee to
establish the following by clear and convincing evidence: The transaction was
made under a power expressly granted in the trust and the clear intent of the
settlor; and the transaction was in the beneficiary’s best interests.
23. Agency: Fraud: Proof. Showing a fiduciary relationship alone does not establish
constructive fraud. Constructive fraud is the breach of a duty arising out of a
fiduciary or confidential relationship.
728 	278 NebrASkA rePOrTS

24. Final Orders. Generally, when a trial court clearly intends its order to serve as a
final adjudication of the rights and liabilities of the parties, the order’s silence on
requests for relief can be construed as a denial of those requests.
25. Trusts: Agents: Records. A trustee has a duty to keep adequate records of the
administration of the trust and to promptly respond to a beneficiary’s request for
information related to the administration.
26. Trusts: Agents: Costs. While the Nebraska Uniform Trust Code permits a trustee
to retain a reasonable amount of assets to pay winding-up costs, it requires a
trustee to distribute trust property to the designated beneficiaries upon the termi-
nation or partial termination of a trust.
27. Trusts: Time. A trust’s termination date can be implied from its terms.
28. Trusts. A trustee’s payments for the settlor’s outstanding debts, taxes, and
expenses are part of the trustee’s winding-up duties after a trust terminates.
29. Trusts: Agents. After a trust terminates, a trustee continues to have a non-
beneficial interest in the trust for timely winding up the trust and distributing
its assets.
30. Trusts: Agents: Property. After a trust terminates, a trustee’s property manage-
ment powers are limited to those that are reasonable and appropriate in preserving
the trust property pending the winding up and distribution of assets.
31. Trusts: Agents. Under the Nebraska Uniform Trust Code, a trustee’s duty to pay
the settlor’s debts, expenses, and taxes does not normally justify a trustee’s failure
to make distributions.
32. Trusts: Agents: Property. A trustee has a duty of impartiality in administering
trust property, which duty plays particular importance in distributing assets.
Appeal from the district Court for hitchcock County: davId
urboM, Judge. reversed and vacated, and cause remanded for
further proceedings.
J. 	bryant 	brooks, 	of 	brooks 	Law 	Offices, 	P.C., 	for
appellant.
Nathan A. Schneider, of Mousel & Garner, pro se.
Steve W. hirsch, of hirsch & Pratt, L.L.P., and Terry L.
rogers, of Terry L. rogers Law Firm, for appellee Charles
hedke.
H eavIcan, 	c.J., 	wrIgHt, 	connoLLy, 	gerrard, 	stepHan,
MccorMack , and MILLer-L erMan, JJ.
connoLLy, J.
I. SUMMArY
Shortly before her death at age 92, while suffering from
dementia, Leona M. hedke created a trust. She deeded all her
real estate to the trust and executed a new will that devised
IN re eSTATe OF hedke 	729
Cite as 278 Neb. 727

all her remaining property to the trust. In the trust, she left
the bulk of her estate to her son, Charles hedke, and nominal
assets to her daughter, dolores Nowak. dolores contested the
will, objecting, in part, to Charles’ undue influence.
In a separate action, dolores also sued to set aside the trust
and to impose a constructive trust on assets that Charles had
wrongfully taken while acting as Leona’s attorney in fact. In
addition, she sued to recover assets that Charles had wrong-
fully taken while acting as trustee of Leona’s trust.
After dolores transferred the probate action to district court,
the court dismissed as time barred her claim challenging the
trust’s validity. After consolidating the cases, the court con-
cluded that dolores had failed to carry her burden on two
issues: She failed to show that Leona (1) lacked testamentary
capacity and (2) had executed the will and quitclaim deed
because of Charles’ undue influence. The court found that
these documents were valid. but the court found that Charles
had abused his fiduciary duties both while he was attorney in
fact and while he was trustee. It ordered him to pay for many
unauthorized expenditures and to return assets that he had
wrongfully taken.
Our holding will be spelled out with some specificity in the
following pages, but briefly stated, it is this:
(1) We reverse the district court’s order finding no undue
influence, because the evidence shows that Charles improperly
influenced Leona in making her will.
(2) We vacate the district court’s order finding that the deed
was valid and that Charles had misappropriated Leona’s assets
while attorney in fact, because dolores, as a devisee, lacked
standing to recover assets for the estate, so the court did not
have jurisdiction over these claims.
(3) We conclude that dolores, as a trust beneficiary, had
standing to challenge Charles’ actions while he was trustee.
(4) We remand the cause to the district court to make further
findings and determinations regarding Charles’ transactions
during the trust’s winding-up period.
II. bACkGrOUNd
When his father became ill, Charles moved back to the
Trenton, Nebraska, area to help manage the family farm. After
730 	278 NebrASkA rePOrTS

his father died, he and Leona agreed to split the farm expenses
and income evenly, and Leona would pay the taxes. In 1993,
Leona signed a will which provided that Charles would receive
the farmland but compensate dolores for her share in cash.
Leona’s attorney had drafted the 1993 will. In 1998, Charles
took Leona to see her attorney to draw up a power of attor-
ney naming both Charles and dolores as her joint attorneys
in fact.
Later, in december 2003, Leona was hospitalized after fall-
ing because of a seizure. While she was at the hospital, her doc-
tor diagnosed her with dementia, and she was later admitted to
a nursing home. before entering the nursing home, Leona lived
alone in Trenton, and Charles and his wife lived on Leona’s
farmland. dolores lived in Arizona. After Leona entered the
nursing home, Charles handled all her financial affairs.
Leona had frequently told a neighbor and Leona’s sister-in-
law, close friends of Leona, that she had a will. And she said
that she had treated her children equally: Charles was to get the
farm and dolores was to get an equal share of Leona’s estate
through a cash payment from Charles. She had also discussed
her will several times with her neighbor while in the nursing
home and had never indicated that she wanted a new will. The
record shows that dolores and Leona were close and main-
tained regular contact. And before entering the nursing home,
Leona equally divided her oil royalty money between herself
and her children.
even before entering the nursing home, Leona had problems
with confusion and memory loss. In October 2004, after she
entered the nursing home, her doctor signed a report character-
izing her dementia as “[s]ignificant Alzheimer’s.” The same
month, he sent a letter to dolores’ attorney regarding dolores’
pending conservatorship application. he stated that Leona was
usually confused and disoriented and could not make decisions
in her best interests regarding her health care or finances.
Later, at trial, her doctor stated that on december 10,
2004—the date Leona allegedly requested a new estate plan
from 	Charles’ attorney—he 	believed 	that 	someone 	should
have been overseeing her best interests. because her condition
would have only gotten worse, he believed she would have had
IN re eSTATe OF hedke 	731
Cite as 278 Neb. 727

a difficult time reading or understanding the estate planning
documents that she signed on december 30, 2004. he also
testified that Leona was vulnerable to suggestion and could
be manipulated. he explained that she probably would have
remembered who her family members were and that a person
might not recognize her condition without probing because she
could carry on a short conversation. her nurses also considered
Leona’s cognitive abilities, short- and long-term memory, and
decisionmaking to be severely impaired.
both Leona’s neighbor and Leona’s sister-in-law testified
that Leona was vulnerable to suggestion and that she relied
upon Charles for every decision. Leona had paid off his
defaulted business loan, and she had paid his child sup-
port arrears.
Charles claimed that before Leona entered the nursing
home but while he was her attorney in fact, she gave him
money because of his financial hardships. his wife had been
unable to work since 2000 because of multiple sclerosis, his
business had failed, and because of drought, the farm income
had dropped. he stated that Leona would tell him to write
out a check and then she would sign it. Charles admitted to
keeping some of his mother’s valuable items when her per-
sonal property was sold at auction; he claimed that Leona
wanted him to have them. While Leona was in the nursing
home, Charles also wrote himself checks from her account if
he needed money. he said that he told her about the checks
and that she did not object. Charles also admitted that in
2004, he cashed five of her monthly oil royalty checks and
used the money for himself; he claimed that Leona had given
him permission.
While Leona was in the nursing home, dolores was being
treated for terminal lung cancer but called Leona weekly and
sometimes daily. having access to Leona’s financial state-
ments, dolores discovered that Charles was not paying the
nursing home bills. Nor was he depositing farm income or
oil royalty payments into Leona’s account. She also discov-
ered that Charles had written checks to himself from Leona’s
account. When confronted, he told dolores he needed the
money for his expenses. dolores demanded that he account for
732 	278 NebrASkA rePOrTS

these funds. he refused. In September 2004, she applied for an
appointment of a guardian and conservator.
dolores 	stated 	that 	she 	dismissed 	her 	first 	application
because Leona was upset, but she had asked the guardian ad
litem to further investigate, which he did. At the January 2005
hearing on dolores’ second application, the guardian ad litem
reported to the court that a conservatorship was necessary. he
had learned that Leona had incorrectly reported facts about her
life during his first interview. he had concluded that she did
not understand any specifics about her finances or assets.
In November 2004, Charles sold Leona’s house and auc-
tioned her personal property. The proceeds were several thou-
sand dollars for the personal property and $45,500 for the
house. Charles stated that he wrote a check for the full amount
of the house proceeds to the nursing home to cover arrears. Yet,
his 2005 accounting shows that he deposited $52,499.55 from
the house and auction proceeds and paid only $22,400 to the
nursing home. dolores became concerned because large sums
of Leona’s money were still disappearing and because Charles
had told her that Leona did not have enough money to remain
in the nursing home. So in November 2004, she applied again
for an appointment of a guardian and conservator. Charles
claims that after this filing, Leona became very upset and
wanted an attorney to fight the action.
Shortly after dolores filed the second application, Charles
removed Leona from the nursing home—over dolores’ objec-
tions—and took her to his home. At that time, Leona had
$42,923 in three bank accounts. In 2004, her farm property was
assessed for tax purposes at $174,630. The nursing home cost
about $3,989 a month.
Leona’s doctor agreed to discharge her from the nursing
home after Charles assured him that he and his wife could care
for Leona. Although Charles’ wife was a registered nurse, she
was disabled and, like Leona, needed a wheelchair. Charles
used Leona’s funds to pay his housekeeper for helping his wife
with Leona’s care and to build wheelchair ramps. Charles, his
wife, and his housekeeper testified that Leona was happy living
with Charles. The nursing home staff, however, was concerned
about Leona’s living with Charles because of her confusion and
IN re eSTATe OF hedke 	733
Cite as 278 Neb. 727

high risk for falling. because Charles had declined all support-
ive services, they notified Adult Protective Services.
Just before her discharge from the nursing home, Leona told
her neighbor that Charles had said dolores was trying to steal
the farm. he admitted this. he also admitted that after dolores
applied for a guardian and conservator, he began suggesting to
Leona that she create a trust because it would easier for him to
take care of her with a trust.
1. cHarLes asks HIs attorney to represent L eona
Charles testified that Leona had repeatedly told him that she
wanted to change her will. Yet, he did not attempt to contact
Leona’s longtime attorney, who had drafted her 1993 will and
power of attorney. he testified that in late 2004, in response to
Leona’s inquiry, he told her that she could discuss changing her
estate plan with his attorney, Terry rogers. he further stated
that she agreed to Charles’ contacting rogers, which he did.
rogers’ billing statement shows that Charles contacted him on
december 2, 3 days after removing Leona from the nursing
home. According to Charles, rogers suggested a trust.
On december 10, 2004, rogers met with Leona at Charles’
house. At this time, rogers was also representing Charles on an
unrelated assault charge. rogers knew that dolores and Charles
were Leona’s joint attorneys in fact, and he knew that dolores
was concerned Charles was misappropriating Leona’s assets.
rogers admitted that he knew he “might have” a conflict of
interest. he was representing Charles and his wife, and Charles
would benefit from dolores’ disinheritance. Charles could not
remember whether he had paid rogers for Charles’ personal
legal matters out of Leona’s funds. rogers stated that Leona
orally agreed to waive any conflict regarding his past and
present representation of Charles and his wife. he stated that
he agreed to represent Leona only after Charles and his wife
understood that his advice to Leona could be contrary to what
they would prefer.
In contrast to Charles’ statements, rogers testified that he
was not asked to meet with Leona to discuss her will. According
to rogers, he had the following discussion with Leona on
december 10, 2004: While discussing the conservatorship
734 	278 NebrASkA rePOrTS

proceeding with him out of Charles’ presence, Leona asked
rogers to do some estate planning. Leona stated that she
thought she had made a will, but that she could not remem-
ber what it said and that she wanted a new one. On cross-
examination, however, rogers admitted Leona had told him
that she did not know where the will was and that she wanted to
dispose of her property as her father had—with her son getting
the land and her daughter getting the cash. rogers advised her
to create a revocable trust before a court ordered a conservator-
ship against her wishes. Leona was purportedly unconcerned
when he explained that dolores might receive nothing from the
trust if Leona lived a long time. Leona agreed with Charles to
include the farm equipment as a trust asset and agreed to con-
vey all her farmland to the trust in a quitclaim deed.
rogers stated that Leona knew that Charles was taking
her money, but that Leona did not want him to pay it back.
According to rogers, she was dismissive of Charles’ attempt
to include as a trust asset any money he had borrowed. rogers,
however, insisted that the debt be included. he stated that
Leona’s anger at dolores was rational because Leona did not
want Charles to account for his conduct.
both Charles and rogers stated that Charles was not pres-
ent when rogers discussed the will and trust with Leona. And
Charles claimed he could not recall whether he had talked to
rogers about the terms of the trust or will. but he admitted that
rogers had advised him a trust would be the best solution for
the farm business. Charles also admitted that he participated
in discussions with rogers and Leona about a trust and that
he had encouraged her to create it. Charles did not, however,
explain to Leona that dolores would likely not receive any
property if Leona created the trust.
The record also shows that Charles consulted with rogers on
december 15, 2004, regarding Leona’s estate plans. Apparently,
this is the date when Charles told rogers that he and Leona
had agreed to include as a trust asset a $20,000 debt from
Charles. This loan did not, however, include the royalty checks
he had cashed, and he could not remember whether it included
any “cash payments” to himself. rogers included this “loan”
as a trust asset. Charles also told rogers that Leona had agreed
IN re eSTATe OF hedke 	735
Cite as 278 Neb. 727

to have an “old friend of Charles,” a farmer in the community
whom Leona “seemed to know,” serve as her trustee. rogers
said that he did not speak to Leona again until december 30,
when she signed the documents.
On december 16, 2004, rogers sent a letter to Charles
explaining his “possible” conflict of interest, to ensure that
he and his wife did not object to rogers’ representing Leona.
but he did not send a corresponding letter to Leona. Also on
december 16, Charles called rogers to say that he had found
Leona’s 1993 will. Charles knew that Leona had made a will
because she had shown it to him in 2003 before entering
the nursing home. And he knew that under that will, he was
required to make a cash payment to dolores. Charles faxed
a copy of the will to rogers. rogers knew that the 1993 will
contained a provision that either gave dolores a lien against
the property or required Charles to pay money to dolores so
that she would receive her share of the estate. but rogers
instructed Charles to shred the old will, and rogers shredded
his copy. he stated that this was his standard practice to avoid
confusion between wills when a client executes a new will.
Charles admitted that he had probably burned the earlier will.
Neither rogers nor Charles ever informed Leona that her old
will had been found. Charles’ housekeeper testified that Leona
had told her she had a will but that she was executing a new
one because the old one was lost. Leona also told her that the
new will was the same as the old one.
On Christmas 2004, dolores spoke to Leona on the tele-
phone. Angry, Charles called dolores and accused her of trying
to steal the farm. Leona’s sister-in-law also spoke to Leona on
Christmas. Leona was upset and repeated that Charles had told
her dolores was trying to steal the farm.
2. L eona sIgns new estate pLan docuMents wHILe H er
coMpetency H earIng was pendIng
for January 12, 2005
On december 30, 2004, Charles took Leona to the court-
house to review the estate plan documents and then to the
bank for witnessing and notarization. rogers stated that he left
Leona alone to review the documents. he then spent 5 to 10
736 	278 NebrASkA rePOrTS

minutes reviewing the documents with her, including the trust
provision that left dolores only Leona’s remaining personal
property. he stated that Leona affirmed that this division was
what she wanted. Leona signed a quitclaim deed conveying all
her farm property to the Leona M. hedke revocable Trust. The
trust named Charles’ friend as trustee and dolores and Charles
as the beneficiaries. After Leona’s death, the trust required
the trustee to (1) pay her debts, taxes, and burial expenses;
(2) distribute all real estate to Charles; and (3) distribute any
remaining trust property to dolores. Leona also signed a new
will, making dolores the residuary beneficiary. but the new
will contained a pour-over provision that bequeathed all her
property to the revocable trust.
Three bank employees witnessed Leona sign the documents.
One of them stated that Leona was unsure whether she had
reviewed the documents. but she knew who the banker and
another employee were, and she told the employees she was
signing the documents of her own free will. She also stated in a
“disappoint[ed] tone” that she did not know what had happened
to dolores. She stated that dolores had not been there but that
Charles had stayed and helped.
All three employees reported that Leona had stated she was
dividing her assets the same way her parents or father had:
The sons received the real estate, and the daughters received
cash and other assets. The banker stated that while he believed
Leona knew what she was doing, he was worried that she was
being influenced.
3. court accepts partIes’ stIpuLatIon tHat
a conservator sHouLd be appoInted
before the hearing on January 12, 2005, the parties had
signed a stipulation. They stipulated as follows: (1) Leona
needed a conservator because she was unable to manage her
property; (2) the court would appoint attorney Nathan A.
Schneider as Leona’s conservator; (3) Schneider would amend
the trust to appoint Charles as trustee instead of Charles’
friend; (4) the trustee would account to the conservator quar-
terly; (5) both dolores and Charles would account to Schneider
within 30 days for all Leona’s assets that they had held,
IN re eSTATe OF hedke 	737
Cite as 278 Neb. 727

received, or transferred under their power of attorney author-
ity from december 2003 forward; and (6) dolores would
reserve her right to contest the will and trust but would dismiss
her request for a guardian. While at the courthouse, Leona
amended her trust to make Charles her trustee. She also signed
a codicil making Charles her personal representative. The court
appointed Schneider as conservator. Schneider testified that
Charles failed to file an accounting within 30 days as the par-
ties agreed.
After Charles became the trustee, rogers represented him
in the conservatorship action and as trustee. In January 2005,
Schneider met with Leona at Charles’ house to assess her
mental capacity and explain his role as her conservator. he
had arranged to meet there with an Adult Protective Services
worker, but Charles refused to allow the worker in his house.
Schneider stated that Leona could not follow the conversa-
tion. After being hospitalized with pneumonia, Leona died on
April 4.
4. events after L eona’s deatH
After Leona’s death, Charles conveyed the trust’s real estate
to himself, but, on rogers’ advice, he did not distribute any
personal property or cash to dolores. he had previously opened
a trust account with a beginning balance of $32,814. he did not
account for Leona’s assets until compelled to do so by a con-
tempt order. And he did not reimburse the trust for the money
he had paid to himself or kept, nor did he pay the trust for the
outstanding $20,000 loan. In April 2005, he wrote himself a
$5,000 check from the trust account to reimburse himself for
Leona’s rent and care he provided. The same month, he pur-
chased a truck with trust money and titled it in his name.
Charles 	provided 	a 	partial 	accounting 	to 	Schneider 	in
September 2005. In October, the county court issued a con-
tempt order. In January 2006, Charles filed an accounting
prepared by rogers. but Schneider asserted that Charles still
had not fully accounted for checks or provided documentation
to show that his expenditures were on Leona’s behalf. The
record shows that Charles’ accounting also did not include
Leona’s income that Charles had kept. In addition, Charles
738 	278 NebrASkA rePOrTS

had written some checks for his own expenses. In January
2006, the county court found this accounting purged Charles
of contempt but was still incomplete. Schneider never filed a
complete accounting because Charles never fully accounted
for Leona’s assets.
III. PrOCedUrAL hISTOrY
In January 2006, dolores filed a probate petition seeking
a determination that Leona died intestate and requesting that
the court appoint her as personal representative. Afterward,
Charles filed a petition for formal probate of Leona’s 2004
will; he requested appointment of himself as personal represent-
ative. dolores contested his request. She objected that Leona
did not have testamentary capacity and that the purported
will was the result of undue influence. In April 2006, dolores
transferred the will contest to the district court.1 At that time,
the county court had not appointed a personal representative
or special administrator,2 nor had the conservator, Schneider,
sought appointment as personal representative.3
Later, in June 2006, dolores filed the nonprobate action, in
her individual capacity. She alleged three claims: (1) Charles
engaged in self-dealing while he was Leona’s attorney in fact;
(2) Charles exercised undue influence over Leona to get her to
execute the december 2004 trust; and (3) Charles violated his
duties as trustee to distribute assets to dolores. Charles moved
to dismiss the undue influence claim as time barred under
Neb. rev. Stat. § 30-3856(a)(1) (reissue 2008). That section
requires a contestant to challenge the validity of a revocable
trust within 1 year of the settlor’s death. The court sustained
the motion.
1. aLLegatIons agaInst cHarLes
In February 2007, dolores joined Schneider as a plain-
tiff in the nonprobate action. In March, the plaintiffs filed
1 See Neb. rev. Stat. § 30-2429.01(1) (reissue 2008).
2 See Neb. rev. Stat. § 30-2457 (reissue 2008).
3 See Neb. rev. Stat. § 30-2654(e) (reissue 2008).
IN re eSTATe OF hedke 	739
Cite as 278 Neb. 727

an amended complaint. This complaint did not contain the
undue influence claim regarding execution of the trust, but
it retained the claims of self-dealing and breach of fiduciary
duties. They claimed that while Charles was attorney in fact,
he (1) fraudulently transferred Leona’s assets to himself and
(2) misrepresented or concealed information which caused
Leona to transfer her personal property and real estate to the
trust. They also claimed that while he was trustee, his misrep-
resentations or concealments resulted in the fraudulent transfer
of trust assets to himself. They asked the court to (1) order a
full accounting of Charles’ conduct while attorney in fact and
trustee; (2) impose a constructive trust for the benefit of the
estate; (3) set aside all real estate conveyances to the trust and
all real estate conveyances executed by Charles to himself as
trustee, or remove Charles as trustee and appoint a receiver; (4)
award damages caused by Charles’ self-dealing; and (5) award
costs and attorney fees.
Charles moved to dismiss the plaintiffs’ claims for an
accounting, a constructive trust, restitution, and damages. he
alleged that both plaintiffs lacked standing to assert claims for
the estate. he asked the court to dismiss, as an attack on the
trust’s validity, that part of the complaint praying that transfers
to the trust be set aside. he sought summary judgment on the
remaining claims.
2. dIstrIct court’s orders and JudgMent
The court rejected Charles’ claim that the plaintiffs lacked
standing. It concluded that heirs can maintain an action to
recover an estate’s assets. but it dismissed the plaintiffs’ request
for a constructive trust on property conveyed to the trust. It
also dismissed their request to set aside conveyances to the
trust and the conveyances from the trust to Charles. The court
concluded that these requests were a challenge to the trust’s
validity, which challenge was time barred. Later, however, the
court reversed its decision and allowed the plaintiffs to seek a
constructive trust and to set aside the deed.
dolores died before trial, but the court admitted her deposi-
tion testimony. After a consolidated trial, the court issued an
order, detailing many transactions that were made in violation
740 	278 NebrASkA rePOrTS

of Charles’ fiduciary duties while attorney in fact or trustee.
The court ordered him to pay the conservator, Schneider,
$14,528.58 for the fraudulent transfers Charles had made while
attorney in fact. The court further ordered him to pay Leona’s
estate $18,138.57 for fraudulent transfers made while he was
trustee. It also awarded prejudgment interest.
regarding the constructive trust, the court found that dolores
and the conservator had proved that Charles had obtained
some of Leona’s personal property from the auction through
constructive fraud. It also found that Charles had violated his
fiduciary duties by purchasing a truck with trust assets. The
court ordered Charles to return those assets to the estate. but
it concluded that real estate that Leona transferred to the trust
was not obtained by fraud, misrepresentation, or abuse of a
confidential relationship.
regarding the 2004 will, the court found the plaintiffs
had failed to show that the deed and will were the result of
undue influence or that Leona lacked testamentary capacity.
The court found that Leona had validly executed the deed and
will. It transferred the probate action back to county court
for further proceedings. It then allowed dolores’ son, John
Nowak, to represent her interests and substituted him as a
party. Finally, it overruled the plaintiffs’ motion for a new trial
in both cases.
IV. ASSIGNMeNTS OF errOr
Nowak filed a notice of appeal, and Schneider joined in
the reply brief. For convenience, we will refer to Nowak and
Schneider as “the appellants.” The appellants assign that the
court erred in (1) putting the burden of proof on dolores on
the issues of undue influence and testamentary capacity, (2)
finding that Leona validly executed her 2004 will, (3) finding
that Leona validly executed the 2004 quitclaim deed, and (4)
failing to recover all assets proved to be fraudulently conveyed
to Charles or for his benefit while he was acting as attorney in
fact or trustee.
On cross-appeal, Charles assigns that the district court erred
in failing to dismiss all claims brought by the appellants for
lack of standing.
IN re eSTATe OF hedke 	741
Cite as 278 Neb. 727

V. ANALYSIS
1. probate I ssues
We first address the court’s judgment in the probate action.
(a) Standard of review
[1-4] Absent an equity question, we review probate matters
for error appearing on the record.4 When reviewing a judgment
for errors appearing on the record, the inquiry is whether the
decision conforms to the law, is supported by competent evi-
dence, and is neither arbitrary, capricious, nor unreasonable.5
In reviewing a judgment of the probate court in a law action,
we do not reweigh evidence, but consider the evidence in the
light most favorable to the successful party. And we resolve
evidentiary conflicts in favor of the successful party, who is
entitled to every reasonable inference deducible from the evi-
dence.6 The probate court’s factual findings have the effect of
a verdict, and we will not set those findings aside unless they
are clearly erroneous.7
(b) Undue Influence
The court’s order does not state its reasoning, but it found
that dolores had failed to prove Leona’s 2004 will was the
product of Charles’ undue influence. dolores contends that
the court did not apply the proper burden of proof regarding
undue influence. relying on our decision in In re Estate of
Novak,8 she argues that the evidence established a presumption
of undue influence and that Charles failed to overcome this
presumption. And so she contends that the evidence established
that the will was the product of undue influence.
Charles does not specifically address the court’s undue
influence ruling regarding the will; his brief addresses undue
influence regarding only the quitclaim deed. but he argues that
the court correctly found that the will and codicil were valid.
4 See In re Estate of Cooper, 275 Neb. 322, 746 N.W.2d 663 (2008).
5 In re Estate of Lamplaugh, 270 Neb. 941, 708 N.W.2d 645 (2006).
6 See id.
7 See id.
8 In re Estate of Novak, 235 Neb. 939, 458 N.W.2d 221 (1990).
742 	278 NebrASkA rePOrTS

The thrust of his evidence and argument at trial was that Leona
created her will and revocable trust because she wanted to
protect him financially and because she was upset that dolores
had initiated a conservatorship proceeding.
[5,6] before proceeding with the analysis, we set forth
some general principles regarding undue influence. To show
undue influence, a will contestant must prove the following
elements by a preponderance of the evidence: (1) The testator
was subject to undue influence; (2) there was an opportunity to
exercise such influence; (3) there was a disposition to exercise
such influence; and (4) the result was clearly the effect of such
influence.9 Yet not every exercise of influence will invalidate
a will.10 Undue influence sufficient to defeat a will is manipu-
lation that destroys the testator’s free agency and substitutes
another’s purpose for the testator’s.11
[7,8] but it is not necessary for a court in evaluating the
evidence to separate each fact supported by the evidence and
pigeonhole it under one or more of the above four essential
elements. The trier of fact should view the entire evidence and
decide whether the evidence as a whole proves each element of
undue influence.12 And a party seeking to prove the exercise of
undue influence is entitled to all reasonable inferences deduc-
ible from the circumstances proved.13
(i) Presumption of Undue Influence
[9] One does not exert undue influence in a crowd. It is usu-
ally surrounded by all possible secrecy; it is usually difficult
to prove by direct evidence; and it rests largely on inferences
drawn from facts and circumstances surrounding the testator’s
life, character, and mental condition. In determining whether
9 See, In re Estate of Wagner, 246 Neb. 625, 522 N.W.2d 159 (1994); In re
Estate of Novak, supra note 8.
10 In re Estate of Peterson, 232 Neb. 105, 439 N.W.2d 516 (1989).
11 See In re Estate of Novak, supra note 8.
12 See In re Estate of Price, 223 Neb. 12, 388 N.W.2d 72 (1986), citing
Andersen v. Andersen, 177 Neb. 374, 128 N.W.2d 843 (1964).
13 Pruss v. Pruss, 245 Neb. 521, 514 N.W.2d 335 (1994); In re Estate of
Villwok, 226 Neb. 693, 413 N.W.2d 921 (1987).
IN re eSTATe OF hedke 	743
Cite as 278 Neb. 727

undue influence existed, a court must also consider whether the
evidence shows that a person inclined to exert improper control
over the testator had the opportunity to do so.14 Thus, we have
recognized a presumption of undue influence if the contestant’s
evidence shows a confidential or fiduciary relationship, coupled
with other suspicious circumstances.15
[10] We have previously summarized suspicious circum-
stances that, when coupled with proof of a confidential or
fiduciary relationship, can give rise to a presumption of undue
influence. Those circumstances include: (1) a vigorous cam-
paign by a principal beneficiary’s family to maintain intimate
relations with the testator, (2) a lack of advice to the testator
from an independent attorney, (3) an elderly testator in weak-
ened physical or mental condition, (4) lack of consideration for
the bequest, (5) a disposition that is unnatural or unjust, (6) the
beneficiary’s participation in procuring the will, and (7) domi-
nation of the testator by the beneficiary.16
but the ultimate burden of persuasion for undue influence
remains with the contestant throughout the trial.17 We have
not, however, determined what quantity of proof will rebut a
presumption of undue influence. In In re Estate of Novak, we
stated that when a contestant’s evidence gives rise to a pre-
sumption of undue influence, the burden of going forward with
evidence to rebut the presumption shifts to the proponent. We
stated that if the proponent’s “evidence establishes there was
no undue influence, the presumption disappears.”18 We also
stated that the presumption of undue influence may be rebutted
by proof that the testator had competent independent advice
and that the will was his or her own voluntary act, or by other
14 See In re Estate of Villwok, supra note 13.
15 See, e.g., In re Estate of Novak, supra note 8.
16 See id.
17 See, McGowan v. McGowan, 197 Neb. 596, 250 N.W.2d 234 (1977); In re
Estate of Goist, 146 Neb. 1, 18 N.W.2d 513 (1945); In re Estate of Hagan,
143 Neb. 459, 9 N.W.2d 794 (1943).
18 See In re Estate of Novak, supra note 8, 235 Neb. at 942, 458 N.W.2d at
224 (emphasis supplied), citing Loomis v. Estate of Davenport, 192 Neb.
461, 222 N.W.2d 369 (1974).
744 	278 NebrASkA rePOrTS

evidence of the circumstances surrounding the execution of the
will.19 These statements suggest that the proponent’s rebuttal
evidence must do more than support an opposing inference.
but we also stated that “after evidence has been introduced, the
presumption disappears.”20 It appears that we have made con-
tradictory statements regarding the quantity of proof that would
satisfy the proponent’s burden to rebut the presumption.
Our case law on the proof necessary to rebut a presump-
tion of undue influence is inconclusive. We have not treated
every similar presumption as disappearing upon the opponent’s
introduction of contradictory evidence sufficient to support an
opposing inference.21 but the parties have not presented argu-
ments on the quantity of proof issue, and we do not need to
resolve this tension here. even if the presumption of undue
influence disappeared upon Charles’ production of contradic-
tory evidence, we believe the court was clearly wrong. As
discussed below, under any standard of proof, the evidence
overwhelmingly outweighed any evidence Charles adduced to
rebut the presumption.
(ii) The Evidence Showed Both a Confidential
Relationship and Suspicious Circumstances
[11] A confidential relationship exists between two persons
if one has gained the confidence of the other and purports to
act or advise with the other’s interest in mind.22 here, obvi-
ously, a confidential relationship existed. Further, as Leona’s
attorney in fact, Charles not only had a confidential relation-
ship but also had a fiduciary relationship with Leona. And this
fiduciary relationship required him to act solely for her benefit
even at the expense of his own interest.23
19 In re Estate of Novak, supra note 8.
20 See id. at 947, 458 N.W.2d at 227, citing McGowan, supra note 17.
21 See, Crosby v. Luehrs, 266 Neb. 827, 669 N.W.2d 635 (2003); Molholm
v. Lynes, 185 Neb. 707, 178 N.W.2d 566 (1970); Cunningham v. Quinlan,
178 Neb. 687, 134 N.W.2d 822 (1965); Muse v. Stewart, 173 Neb. 520,
113 N.W.2d 644 (1962).
22 See Schaneman v. Schaneman, 206 Neb. 113, 291 N.W.2d 412 (1980).
23 See Archbold v. Reifenrath, 274 Neb. 894, 744 N.W.2d 701 (2008).
IN re eSTATe OF hedke 	745
Cite as 278 Neb. 727

The evidence clearly established that Leona had a history of
relying on Charles in making important decisions and that she
was vulnerable to his requests for financial help. After entering
the nursing home, she totally depended upon him to handle her
finances. The evidence showed that when she left the nursing
home, she could not understand her finances and assets. Twelve
days after Leona signed her 2004 will—which was a little more
than 1 month after Charles had removed her from the nursing
home—Charles stipulated to the following in the conservator-
ship proceeding: “Appointment of a Conservator is necessary
because [Leona] is unable to manage her property and has
property which will be wasted or dissipated unless proper
management is provided due to her lack of capacity to make or
communicate responsible decisions . . . .”
Moreover, the evidence established more than a confiden-
tial and fiduciary relationship. It also showed that Charles
had breached his fiduciary duties. even before Leona became
totally dependent upon him for her physical needs, he was
exploiting the power of attorney and self-dealing as Leona’s
attorney in fact.
Further, the record is littered with other suspicious circum-
stances that raise a presumption of undue influence. Testimony
from dolores, Leona’s physician and caretakers at the nursing
home, her guardian ad litem, and her conservator, Schneider,
established that Leona was impaired physically and mentally
long before she was under Charles’ exclusive control. because
of Charles’ factual stipulations for the appointment of a conser-
vator, he could not reasonably dispute Leona’s impaired condi-
tion. Yet, despite Leona’s sufficient assets to pay for her care
at the nursing home and the belief of Leona’s caretakers and
dolores that Leona should remain there, Charles insisted upon
removing Leona to his home.
After Leona went to live with Charles, he immediately
began efforts to postpone the conservatorship hearing and
have her estate plan rewritten. his ongoing financial prob-
lems, his knowledge that a conservator would likely soon be
appointed, and his refusal of supportive services strongly sup-
port the inference that his campaign to remove Leona from the
nursing home was motivated not by his concern for Leona’s
746 	278 NebrASkA rePOrTS

best interests, but by his desire to preserve her assets for
himself. Other evidence also supports this inference. Leona
had never told her close friends that she wanted to change her
will. And Charles and rogers made inconsistent statements
regarding Charles’ purpose for initially contacting rogers on
Leona’s behalf.
The evidence also supports another strong inference: Charles
used his influence over Leona to turn her away from dolores.
As 	noted 	previously, 	Charles 	admitted 	telling 	Leona 	that
dolores was trying to steal the farm. At the time Charles was
removing Leona from the nursing home, he was also influenc-
ing Leona to believe that dolores had filed a guardianship
and conservatorship application solely for personal gain. both
Leona’s neighbor and Leona’s sister-in-law testified that Leona
was never upset with dolores until Charles convinced her that
dolores was attempting to steal the farm. The neighbor and
sister-in-law knew the parties well. Their testimony showed
that dolores and Leona had been close before and after Leona
entered the nursing home. Leona’s actions and statements also
illustrate that she and dolores had a close relationship before
Charles removed Leona from the nursing home. remember,
Leona was dividing her oil royalty payments with both Charles
and dolores before she entered the nursing home. even after
entering the nursing home, she had repeatedly stated that she
intended to divide her assets equally between her children, as
her father had. Charles’ manipulation and dominion infected
Leona’s attitude toward dolores.
Charles and rogers also failed to provide Leona with infor-
mation that would have permitted her to compare her new
estate plan with her previous intentions in her earlier will.
rogers’ billing statements and Charles’ testimony showed that
Charles was involved in the planning of Leona’s new estate
plan. Yet, he admitted that he did not explain to Leona that her
new estate plan would effectively disinherit dolores. rogers
told Leona that her medical expenses could deplete her cash
assets if she lived a long time. but he did not discuss the
money in her accounts at that time. Most important, neither
Charles nor rogers informed Leona that Charles had found her
old will and that there were substantial differences.
IN re eSTATe OF hedke 	747
Cite as 278 Neb. 727

Nor did Leona have independent legal advice from an
attorney solely dedicated to her interests. despite her age,
her infirmity, and allegations of Charles’ theft, rogers did
not attempt to determine whether a conservatorship might be
in Leona’s best interests. he admitted that he did not explain
to Leona that dolores believed Charles was misappropriating
her assets. And, at trial, Charles admitted that he had used
trust funds for his benefit without authorization. We note
that rogers now represents Charles in this appeal. he argued
Charles’ case before this court.
rogers also failed to independently verify Leona’s compe-
tency by asking her questions about her assets or speaking to
her physician to determine if a guardianship or conservator-
ship was necessary. To the contrary, he successfully continued
the competency hearing scheduled for december 15, 2004,
until January 12, 2005, after Leona had executed new estate
plan documents. Although Leona had told rogers that she
wanted to divide her property as her father had and that she
did not know where her earlier will was, he did not verify
that the differences in the new will represented her wishes. On
this record, rogers’ testimony that Leona was not mentally
impaired rings hollow.
The evidence was sufficient to support a judgment for
dolores if unrebutted. The evidence clearly showed that Leona
was subject to Charles’ undue influence and that he had the
opportunity to exercise such influence. The court’s finding
that Charles had engaged in self-dealing while he was Leona’s
attorney in fact and trustee established his disposition to exer-
cise such influence. Finally, even if Leona could have under-
stood that she was disinheriting dolores, the evidence showed
that she would not have done so but for Charles’ ability to turn
Leona against dolores.
In contrast, Charles’ evidence established that Leona was
unhappy at the nursing home and happy to be living with
him. This evidence was intended to negate the inference that
he had removed her from the nursing home to influence her
to change her estate plan. but it also supported rather than
negated an inference that she was susceptible to Charles’ influ-
ence. Fleshed out, the testimony of Charles, his wife, and his
748 	278 NebrASkA rePOrTS

attorney tended to support the following inferences: Leona was
not close to dolores; Leona was unconcerned about disinher-
iting dolores; Leona wanted Charles to have her assets; and
Leona never wanted Charles to account for funds that he had
taken from her.
but Charles’ self-dealing and constructive fraud punctured
his credibility. And rogers’ zeal of approval failed to resusci-
tate it. Further, their claims that Leona was clear about how
she wanted to distribute her assets were undermined because
neither Charles nor rogers told Leona about finding her 1993
will, despite evidence that she believed she was creating the
same estate plan. And even the banker suspected that Leona
was being influenced. Above all, the court clearly did not
believe Charles or rogers when it found that Charles had
helped himself to Leona’s funds as her attorney in fact. despite
the testimony that these funds were included as a trust asset
in the form of a “loan,” the court nonetheless found the
appellants had proved constructive fraud. If the testimony of
Charles and rogers was not credible on that issue, we wonder
how they were nonetheless credible regarding the absence of
undue influence.
While we recognize our deferential standard of review
regarding the trial court’s factual findings, we cannot ignore
the overwhelming evidence that Leona would not have cre-
ated this estate plan absent Charles’ improper influence and
manipulation. The record shows Charles’ rushed and con-
certed effort to have Leona create new estate documents
before the county court held a hearing on Leona’s compe-
tency. Moreover, we cannot reconcile the trial court’s finding
of no undue influence regarding the will with its separate
conclusion that Charles, as attorney in fact and trustee, had
exploited his positions of trust for his own benefit both before
and after Leona’s death.
The district court was clearly wrong in not finding that
Leona’s 2004 will was the result of undue influence. So, the
2004 will was invalid and we need not reach the issue of her
testamentary capacity. We next turn to the parties’ arguments
regarding the nonprobate action.
IN re eSTATe OF hedke 	749
Cite as 278 Neb. 727

2. tHe appeLLants dId not H ave standIng to set asIde
Q uItcLaIM deed or seek recovery of property
cHarLes MIsapproprIated wHILe H e was
L eona’s attorney In fact
The appellants assign that the court erred in finding that the
quitclaim deed Leona executed was valid. They argue that the
court failed to address their claim that Charles fraudulently
concealed information from Leona that resulted in her execu-
tion of the quitclaim deed. Specifically, they argue that Leona
would not have executed the will, trust, or quitclaim deed if
Charles or rogers had informed her that Charles had found her
1993 will. On cross-appeal, Charles argues that the appellants
did not have standing to seek recovery of Leona’s real estate
conveyed to the trust in the quitclaim deed.
(a) Standard of review
[12,13] Whether a party who commences an action has
standing and is therefore the real party in interest presents
a jurisdictional issue.24 A jurisdictional issue that does not
involve a factual dispute presents a question of law, which we
independently decide.25
(b) No exception to Standing rule Applies
[14] Whether the appellants’ claim regarding the quitclaim
deed is labeled undue influence or fraudulent concealment, it
challenged Charles’ conduct while he was Leona’s attorney
in fact before her death. but under the Nebraska Probate
Code, the right and duty to sue and recover assets for an
estate reside in the estate’s appointed personal representa-
tive, not the devisees.26 The code specifically provides that
“to acquire the powers and undertake the duties and liabilities
of a personal representative of a decedent, a person must be
appointed by order of the court or registrar, qualify and be
issued letters.”27
24 See Burnison v. Johnston, 277 Neb. 622, 764 N.W.2d 96 (2009).
25 Id.
26 See Neb. rev. Stat. §§ 30-2464(c), 30-2470, and 30-2476 (reissue 2008).
27 Neb. rev. Stat. § 30-2403 (reissue 2008).
750 	278 NebrASkA rePOrTS

We have previously noted that before the Legislature adopted
the Uniform Probate Code, we had permitted an heir to main-
tain an action to enforce an obligation owed to the estate when
the administrator refused to act.28 And we have recognized that
there is general authority for this exception.29 but even if the
Nebraska Probate Code permits that exception, an issue we do
not decide, here the problem is not a personal representative’s
refusal or inability to act. Instead, there is no personal repre-
sentative. The Nebraska Probate Code anticipates this problem
by providing for the appointment of a special administrator
to administer an estate when a personal representative cannot
or should not act.30 Therefore, there is no need to recognize
an exception that permits a devisee to sue on behalf of an
estate. We conclude that the appellants did not have standing
to recover real property for the estate because of undue influ-
ence. Similarly, they did not have standing to recover personal
property from Charles for the time that he served as Leona’s
attorney in fact. because they did not have standing, the dis-
trict court did not have jurisdiction to decide these claims.31
We vacate those parts of the court’s order that concluded there
was no undue influence in the execution of the quitclaim deed
and that ordered Charles to pay for or return assets fraudulently
transferred to himself while he was attorney in fact. but regard-
ing its award to the estate for fraudulent transfers while he was
trustee, the appellants have standing.
3. doLores H ad standIng to contest trustee actIons
We reject Charles’ argument in his cross-appeal that all the
claims in the nonprobate action belonged to the estate and not
to dolores. This contention is incorrect as far as it is directed
to Charles’ constructive fraud while he was trustee of Leona’s
28 See Beachy v. Becerra, 259 Neb. 299, 609 N.W.2d 648 (2000), citing
Prusa v. Everett, 78 Neb. 250, 113 N.W. 571 (1907).
29 See Beachy, supra note 28. See, also, Hampshire v. Powell, 10 Neb. App.
148, 626 N.W.2d 620 (2001).
30 See § 30-2457.
31 See Citizens Opposing Indus. Livestock v. Jefferson Cty., 274 Neb. 386,
740 N.W.2d 362 (2007).
IN re eSTATe OF hedke 	751
Cite as 278 Neb. 727

trust. dolores was the beneficiary of all non-real-estate prop-
erty left to the trust. She clearly had standing to raise Charles’
self-dealing and to seek damages, an accounting, and a con-
structive trust regarding Charles’ duties as trustee.32 Although
the court should have ordered Charles to reimburse the trust
for distribution to dolores, instead of requiring him to pay the
estate for his misappropriations as trustee, this error did not
prejudice Charles and can be corrected on remand.
4. court’s order regardIng cHarLes’ MIsapproprIatIons
wHILe trustee reQuIres reMand for
furtHer proceedIngs
The court found that dolores had proved constructive fraud
for the transactions that are set out in its order. These transac-
tions occurred both while Charles was Leona’s attorney in fact
and while he was the trustee of her trust. The court found that
dolores had proved that Charles, “using a power of attorney,
made gifts to himself or made payments to others for his bene-
fit.” It further found that Charles had not shown by clear and
convincing evidence that the power of attorney or Leona autho-
rized the listed check transactions. The court then determined
that any checks before Leona’s date of death, on April 4, 2005,
were written by Charles as attorney in fact and that any checks
after her date of death were written by Charles as trustee. It
ordered Charles to pay the estate for the listed transactions
occurring after April 4. This amount was $18,138.57. It also
ordered him to return to the estate a truck he had purchased
with trust assets after this date.
(a) Standard of review
[15,16] Appeals involving the administration of a trust are
equity matters and are reviewable in an appellate court de novo
on the record.33 In a review de novo on the record, an appellate
court reappraises the evidence as presented by the record and
32 See Neb. rev. Stat. §§ 30-3812, 30-3890, and 30-3891 (reissue 2008).
33 In re Trust Created by Isvik, 274 Neb. 525, 741 N.W.2d 638 (2007).
752 	278 NebrASkA rePOrTS

reaches its own independent conclusions concerning the mat-
ters at issue.34
(b) Start date for Trustee Transactions
before addressing the parties’ arguments, we note that the
court failed to segregate the listed transactions into attorney-in-
fact transactions and trustee transactions. The scheduled trust
assets included the funds in Leona’s main bank account. Leona
amended her trust to substitute Charles as trustee on January
12, 2005. The next day, Charles closed Leona’s main account.
he then opened a trust account with a beginning balance of
$32,814. The trust account contained the funds that Charles
was responsible for as trustee. Although Leona’s will devised
her remaining property into the trust upon her death, Charles
did not make any disputed transactions through her other
bank accounts. Therefore, the relevant start date for trustee
transactions was January 12, 2005, when Charles became
Leona’s trustee.
(c) Parties’ Contentions
The appellants assign that the court erred in failing to enter
judgment against Charles for all the sums that they proved he
fraudulently transferred to himself or to others for his benefit
while he was attorney in fact or trustee. They list transactions
in their brief that were not included in the order. They argue
that because Charles was a fiduciary in both capacities, he had
the burden to show that these transactions were equitable to
dolores as beneficiary. We do not address the appellants’ argu-
ment regarding Charles’ transactions as attorney in fact because
we have already determined that they did not have standing to
prosecute those claims. but we will address some of Charles’
transactions as trustee. Charles argues that the appellants had
the burden to prove a prima facie case of fraud. he argues that
they failed to prove that the excluded transactions were gifts he
made to himself. Thus, before deciding whether the court prop-
erly excluded the disputed transactions, we determine which
party had the burden of proof.
34 See id.
IN re eSTATe OF hedke 	753
Cite as 278 Neb. 727

(d) burdens of Production and Persuasion
regarding Trustee’s Constructive Fraud
The appellants rely on our cases dealing with an attorney in
fact’s self-dealing to argue that the burden was on Charles to
prove that these transactions were equitable to dolores. The
rules in those cases were largely based upon fiduciary duties.
An agency creates a fiduciary relationship, subjecting the agent
to a duty to refrain from doing any harmful act to the princi-
pal. An agent must act solely for the principal’s benefit in all
matters connected with the agency, even at the expense of the
agent’s own interest.35 An agent is prohibited from profiting
from the agency relationship to the detriment of the principal.
Also, an agent is prohibited from having a personal stake that
conflicts with the principal’s interest in a transaction in which
the agent represents the principal.36
In the attorney-in-fact cases, we were also concerned about
the potential for fraud when a fiduciary has broad powers
to control another person’s property. We have stated that the
policy concern underlying the law is primarily focused on the
potential for fraud that exists when an agent acting under a
durable power of attorney has the power to make gifts, espe-
cially after the principal becomes incapacitated.37 because of
these concerns, we have held that a party establishes a prima
facie case of fraud by showing that an attorney in fact used the
principal’s power of attorney to make a gift of the principal’s
assets to himself or herself or to make a gift to a third party
with a close relationship to the attorney in fact.38 Whether the
fiduciary acted in good faith or had actual intent to defraud is
immaterial; when these circumstances are shown, the law pre-
sumes constructive fraud.39 What is significant is that the bur-
den of going forward with evidence then shifts to the fiduciary
35 See Crosby, supra note 21.
36 Id.
37 Id.
38 See, Eggleston v. Kovacich, 274 Neb. 579, 742 N.W.2d 471 (2007);
Crosby, supra note 21. See, also, First Colony Life Ins. Co. v. Gerdes, 267
Neb. 632, 676 N.W.2d 58 (2004) (discussing case law).
39 See Eggleston, supra note 38, citing Crosby, supra note 21.
754 	278 NebrASkA rePOrTS

to establish by clear and convincing evidence that (1) the
transaction was made under the power expressly granted in the
instrument and the clear intent of the donor and (2) the fairness
of the transaction.40
[17-19] It is correct that we have not applied these construc-
tive fraud rules to the fiduciary relationship between a trustee
and beneficiary. but like a power of attorney, a trust creates a
fiduciary relationship regarding property. “A person in a fidu-
ciary relation to another is under a duty to act for the benefit of
the other as to matters within the scope of the relation.”41 And
“[a] trustee shall administer the trust solely in the interests of
the beneficiaries.”42 This provision of the Nebraska Uniform
Trust Code (Nebraska UTC) is patterned after the correspond-
ing provision of the Uniform Trust Code,43 which, in turn, is
taken from the restatement (Second) of Trusts.44
[20,21] The restatement comments set forth the same under-
lying fiduciary principles regarding trusts that we have applied
in attorney-in-fact cases. A trustee “is under a duty not to profit
at the expense of the beneficiary and not to enter into competi-
tion with him without his consent, unless authorized to do so
by the terms of the trust or by a proper court.”45 “The trustee
violates his duty to the beneficiary . . . where he uses the trust
property for his own purposes.”46 The restatement (Third)
of Trusts rule is even more explicit: It adds that “[e]xcept in
discrete circumstances, the trustee is strictly prohibited from
engaging in transactions that involve self-dealing or that other-
wise involve or create a conflict between the trustee’s fidu-
ciary duties and personal interests.”47 And because trustees
have great control over the beneficiaries’ property interests
40 See, Eggleston, supra note 38; Crosby, supra note 21.
41 restatement (Second) of Trusts § 2, comment b. at 6 (1959).
42 See Neb. rev. Stat. § 30-3867(a) (reissue 2008).
43 See Unif. Trust Code § 802, 7C U.L.A. 588, comment (2006).
44 restatement (Second), supra note 41, § 170(1).
45 Id., comment a. at 364.
46 Id., comment l. at 369.
47 restatement (Third) of Trusts § 78(2) at 93-94 (2007).
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and beneficiaries cannot readily terminate their fiduciaries or
dispose of their interests, “[t]he duty of loyalty is, for trustees,
particularly strict even by comparison to the standards of other
fiduciary relationships.”48 beyond abstaining from self-dealing,
a trustee “must refrain from placing himself in a position where
his personal interest or that of a third person does or may con-
flict with the interest of the beneficiaries,” even if the trustee
has not profited by a transaction.49
The above principles are codified in § 30-3867. That statute
allows a beneficiary to void any conflict-of-interest transac-
tion unless a listed exception applies.50 As in agency relation-
ships, trusts also raise policy concerns regarding the potential
for self-dealing. Like incapacitated principals in an agency
relationship, trust beneficiaries often have inferior knowledge
about a transaction. Trust beneficiaries also have a limited abil-
ity to protect their interests absent the trustee’s full disclosure
or court approval.51
[22] The same fiduciary principles and policy concerns
about the potential for fraud are present in a trust relationship.
Accordingly, we will apply to trustees the same common-law
rules that we have applied to attorneys in fact. So unless an
exception under § 30-3867 applies, a beneficiary establishes a
prima facie case of fraud by showing that a trustee’s transac-
tion benefited the trustee at the beneficiary’s expense. The bur-
den of going forward with evidence then shifts to the trustee to
establish the following by clear and convincing evidence: The
transaction was made under a power expressly granted in the
trust and the clear intent of the settlor; and the transaction was
in the beneficiary’s best interests.
[23] We emphasize, however, that because these rules are
prompted by the concern for self-dealing, they apply only when
a beneficiary shows the trustee benefited from a transaction at
the beneficiary’s expense. We recognize that under § 30-3867,
48 See id., comment a. at 94.
49 George T. bogert, Trusts § 95 at 341 (6th ed. 1987). See, also, Unif. Trust
Code, supra note 43.
50 See § 30-3867.
51 See bogert, supra note 49, § 95.
756 	278 NebrASkA rePOrTS

a beneficiary could also show a breach of duty by proving that
the trustee’s conflict of interest affected a transaction, even if
the transaction did not involve self-dealing.52 but not every
circumstance involving a conflict of interest would impose
the same burden on the trustee to produce clear and convinc-
ing evidence that the transaction was authorized by the trust.53
And showing a fiduciary relationship alone does not establish
constructive fraud. Constructive fraud is the breach of a duty
arising out of a fiduciary or confidential relationship.54
(e) Applying the rules to the
disputed Transactions
[24] The court’s order did not include the specific transac-
tions that the appellants complain about. Generally, however,
when a trial court clearly intends its order to serve as a final
adjudication of the rights and liabilities of the parties, the
order’s silence on requests for relief can be construed as a
denial of those requests.55 And so, we consider whether the
court properly denied relief for the disputed transactions after
January 12, 2005, the date Charles became the trustee.
Many disputed transactions concern Charles’ claimed expend-
itures for Leona’s care, for which he failed to provide records.
Other transactions are deposits for farming income, for which
he failed to provide records showing that he equally split the
income between himself and the trust. These transactions may
or may not have benefited Charles. but because Charles failed
to fully account for his management of the trust property, the
appellants could not prove that these disputed transactions bene-
fited Charles.
[25] As trustee, Charles had a duty to keep adequate records
of the administration of the trust and to promptly respond
to 	a 	beneficiary’s 	request 	for 	information 	related 	to 	the
52 See Unif. Trust Code, supra note 43.
53 See, § 30-3867(e) through (g); bogert, supra note 49, § 96.
54 See Crosby, supra note 21.
55 See D’Quaix v. Chadron State College, 272 Neb. 859, 725 N.W.2d 558
(2007).
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Cite as 278 Neb. 727

administration.56 And a failure to keep such records is reason,
among other things, for a court reviewing a judicial account-
ing to resolve doubts against the trustee.57 but the appellants
have not assigned as error that the court failed to order an
accounting. And on this record, we cannot say that the appel-
lants established a prima facie case of fraud regarding many
transactions. The record does show, however, that at least four
excluded transactions occurring after Leona’s death benefited
Charles at dolores’ expense.
On direct examination, Charles admitted to making his
personal car insurance payment out of trust funds. he also
admitted that he had paid the full amount of three crop service
bills—for $5,039.26, $999.22, and $1,211.26—out of the trust
fund. even assuming that continued farming operations were
legitimately required to preserve the trust property until he
distributed the assets, his failure to pay for half of these farm-
ing expenses with his own funds—as agreed upon—clearly
benefited him. It also depleted the trust property allocated to
dolores. The court would have undoubtedly benefited from
the same type of list the appellants have provided to us on
appeal. but the court’s failure to include at least half of these
crop service payments in its order would require reversal even
if the trust authorized farming operations past Leona’s death.
The postdeath transactions, however, raise issues that the par-
ties have not directly argued—when did the trust terminate
and what was Charles authorized to do past the termina-
tion date?
(f) Trust Terminated on Leona’s death
[26] Under the trust, Charles was required to hold and invest
all trust property for Leona’s benefit, during her lifetime, and
to pay its principal or income for her support, needs, and
care. Upon Leona’s death, he was required to take the fol-
lowing actions: (1) pay Leona’s outstanding debts, taxes, and
expenses, and trust administration expenses; (2) distribute any
specific devises Leona had made; and (3) distribute the trust’s
56 See Neb. rev. Stat. §§ 30-3875 and 30-3877 (reissue 2008).
57 See restatement (Third), supra note 47, § 83, comment a(1).
758 	278 NebrASkA rePOrTS

real estate to himself and “any and all remaining trust prop-
erty” to dolores. As noted, Charles distributed the real estate to
himself in September 2005. We assume that he has yet to wind
up the trust pending this appeal. but while the Nebraska UTC
permits a trustee to retain a reasonable amount of assets to pay
these winding-up costs, it requires a trustee to distribute trust
property to the designated beneficiaries upon the termination or
partial termination of a trust:
Upon the occurrence of an event terminating or partially
terminating a trust, the trustee shall proceed expedi-
tiously to distribute the trust property to the persons
entitled to it, subject to the right of the trustee to retain
a reasonable reserve for the payment of debts, expenses,
and taxes.58
The Nebraska UTC also defines the termination of the
trust: “[A] trust terminates to the extent the trust is revoked or
expires pursuant to its terms, no purpose of the trust remains to
be achieved, or the purposes of the trust have become unlawful,
contrary to public policy, or impossible to achieve.”59
[27,28] Leona’s trust did not contain a termination clause,
but a trust’s termination date can be implied from its terms.60
here, the terms imply that the trust terminated with Leona’s
death, not the end of the winding-up period, because this is
when her beneficial interests in the trust ended.61 And providing
for her care and support was the only purpose for establishing
the trust.62 Obviously, paying the outstanding debts, taxes, and
expenses upon her death was not the purpose of her trust. This
interpretation is consistent with restatement provisions63 and
58 Neb. rev. Stat. § 30-3882(b) (reissue 2008).
59 Neb. rev. Stat. § 30-3836(a) (reissue 2008).
60 See, Thorson v. Nebraska Dept. of Health & Human Servs., 274 Neb. 322,
740 N.W.2d 27 (2007); In re Trust Created by Hansen, 274 Neb. 199, 739
N.W.2d 170 (2007); restatement (Third) of Trusts § 61 (2003).
61 See Neb. rev. Stat. § 30-3830 (reissue 2008).
62 See, restatement (Third), supra note 60, comment b.; restatement (Third),
supra note 47, § 89, comment a.
63 See, restatement (Second), supra note 41, § 344; restatement (Third),
supra note 47, § 89.
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Cite as 278 Neb. 727

the Nebraska UTC provisions. Instead, a trustee’s payments for
the settlor’s outstanding debts, taxes, and expenses are part of
the trustee’s winding-up duties after a trust terminates.
[29,30] So after the trust terminated, Charles, as trustee,
continued to have a nonbeneficial interest in the trust for
timely winding up the trust and distributing its assets.64 but
after a trust terminates, a trustee’s property management pow-
ers are limited to those that are reasonable and appropri-
ate in preserving the trust property pending the winding up
and distribution of assets.65 The court made no finding that
Charles’ continued farming operations were necessary to pre-
serve trust property.
[31] Also, under the Nebraska UTC, a trustee’s duty to pay
the settlor’s debts, expenses, and taxes does not normally jus-
tify a trustee’s failure to make distributions. even assuming
continued farming operations were necessary, Charles must
also demonstrate that some realistic complication prevented
him from determining in a timely manner a reasonable sum to
reserve for winding-up costs.66 If not, then he breached a duty
of care when he unduly delayed distributions.67
[32] Finally, a trustee has a duty of impartiality in admin-
istering trust property,68 which duty plays particular importance
in distributing assets.69 even if continued farming operations
were necessary, the court also made no finding that Charles
reasonably paid for farming expenses with only dolores’ trust
property without making any adjustments in the assets allocated
to himself.70 Nor did it find that he reasonably held back only
64 See, restatement (Third), supra note 60, § 42, comment b.; restatement
(Third), supra note 47, § 89.
65 See, Neb. rev. Stat. § 30-3881(26) (reissue 2008); restatement (Third),
supra note 47, § 89, comment d.
66 Compare restatement (Third), supra note 47, § 89, comment b.
67 See Neb. rev. Stat. § 30-3869 (reissue 2008). See, also, restatement
(Third), supra note 47, § 89, reporter’s Note comment e.
68 See, Neb. rev. Stat. § 30-3868 (reissue 2008); restatement (Third), supra
note 47, § 79.
69 See restatement (Third), supra note 47, § 89, comment e(2).
70 See § 30-3881(22).
760 	278 NebrASkA rePOrTS

the trust property allocated to dolores to pay debts, expenses,
and taxes. because Charles was both trustee and beneficiary, a
breach of his duty of impartiality in making trust expenditures
would also be a breach of his duty of loyalty. Without these
determinations, we cannot effectively review Charles’ post-
termination transactions.
In sum, the court should permit Charles to charge the trust
for farming operations only if two conditions are satisfied: (1)
The farming operations were reasonably necessary to preserve
the trust property and (2) Charles did not charge the trust for
farming operations past the time when he should have reason-
ably made distributions. If these conditions are met, the court
should further determine whether Charles breached his duty of
impartiality in making trust expenditures and, if so, the appro-
priate remedy.
regarding the remaining transactions, the appellants have
not argued how they constituted constructive fraud, and we
have concluded that the record fails to support such conten-
tions. but because this is the first time that we have pronounced
some of the posttermination rules for trustees, we believe the
parties should have an opportunity to argue their application on
remand. We remand for further proceedings as the district court
determines are necessary for that purpose.
VI. CONCLUSION
We conclude that the district court was clearly wrong in not
finding that Charles had improperly influenced Leona to create
a new will. but because the county court had not appointed a
personal representative or special administrator before dolores
transferred the case to the district court, neither she nor the
conservator had standing to set aside the quitclaim deed or
transactions that Charles made as attorney in fact. We vacate
those parts of the court’s order that found no undue influence
in procuring the quitclaim deed and that required Charles to
pay for unauthorized expenditures or to return property he took
while he was attorney in fact.
We remand 	for 	further 	proceedings 	regarding Charles’
farming transactions after the trust terminated on Leona’s
death. First, the court should determine whether continued
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Cite as 278 Neb. 727

farming operations were reasonably necessary to preserve the
trust property. If so, under his preexisting agreement, Charles
was still personally liable for half of the farming expenses for
trust property incurred during the winding up of the trust’s
administration. If farming operations were not reasonably
necessary, then any payment made for farming operations past
the date of Leona’s death breached his duty of loyalty not to
benefit at a beneficiary’s expense. Second, the court should
determine whether Charles’ failure to expeditiously determine
a reasonable amount of trust property to reserve for debts,
taxes, and expenses was justified by some unusual prop-
erty or tax complication. Finally, the court must determine
whether Charles breached his duty to impartially administer
and distribute trust property. If the court finds that Charles
beached any trustee duties regarding farming operations past
the termination date of the trust, it must further determine the
appropriate remedy.
reversed and vacated, and cause reManded
for furtHer proceedIngs.
762 	278 NebrASkA rePOrTS