The Iowa Court of Appeals has affirmed a lower court's decision in a trust dispute involving the Tracy M. Dvorak Trust. The ruling affects Amber Kochevar and Jeramie Dvorak, who are both beneficiaries of the trust. This case is significant as it clarifies the application of Iowa's Trust Code and Probate Code in trust management and liability.
The case, titled In the Matter of The Tracy M. Dvorak Trust Dated September 10, 2019, was filed under docket number 25-1450. It centers around the actions of Amber Kochevar, who served as a co-trustee and later as the sole trustee after the trust's creator, Tracy Dvorak, passed away in March 2023. Jeramie Dvorak, another beneficiary, alleged that Amber breached her fiduciary duties as a trustee.
The dispute began when Tracy Dvorak established the Tracy M. Dvorak Trust in September 2019. The trust outlined that upon Tracy's death, half of the trust property would be distributed to Amber, while the other half would be held in trust for Jeramie. The trust underwent amendments in February 2020 and May 2022, with the latter amendment appointing Amber as co-trustee during Tracy's life and sole trustee after her death.
After Tracy's death, Amber distributed half of the trust property to herself and retained the other half in trust for Jeramie. In 2024, Jeramie filed a petition against Amber, claiming she breached her trust obligations under Iowa law. Amber then sought to resign as trustee and requested the court to appoint a successor trustee. The district court accepted her resignation and appointed Farmers Savings Bank as the new trustee.
Following the transition, Amber filed for summary judgment, arguing that the district court had released her from liability to the trust and its beneficiaries. However, Jeramie opposed the motion, claiming that the Trust Code did not allow for such a release of liability.
The district court ruled against Amber's request for summary judgment, stating that the Trust Code governed the trust and that it does not permit a resigning trustee to be released from liability. Amber appealed this decision, leading to the current ruling by the Iowa Court of Appeals.
The court's ruling clarified that the Trust Code applies exclusively to trusts that are created outside of court supervision. The court noted, "Because the Trust Code exclusively governs the trust in this case, and the Trust Code does not permit a resigning trustee to be released from liability, there is a genuine issue of material fact as to the breach-of-trust claim and summary judgment is not appropriate." This statement highlights the court's interpretation of the relevant statutes.
The judges involved in this case included Chief Judge Tabor and Judges Chicchelly and Sandy. The court found that the district court acted correctly in denying Amber's motion for summary judgment, affirming the lower court's decision.
The impact of this ruling is significant for trust management in Iowa. It establishes that trustees cannot escape liability for their actions simply by resigning, especially when the Trust Code applies. This ruling may affect future trust disputes and the responsibilities of trustees in Iowa, as it reinforces the legal obligations they hold even after stepping down from their roles.
Looking ahead, it is unclear whether Amber Kochevar will seek further appeals to the Iowa Supreme Court. The case sets a precedent regarding the application of trust law in Iowa, particularly concerning the liability of trustees. There are no indications of related cases pending that may influence this ruling.