In re the Marriage of Matherly

IN THE COURT OF APPEALS OF IOWA

No. 18-0625
Filed July 24, 2019

IN RE THE MARRIAGE OF MARIBEL MATHERLY
AND CARL W. MATHERLY

Upon the Petition of
MICHAEL STEVEN MATHERLY for the ESTATE OF MARIBEL MATHERLY,
Petitioner-Appellant/Cross-Appellee,

And Concerning
CARL W. MATHERLY,
Respondent-Appellee/Cross-Appellant,

and

MARY ELIZABETH SLEZAK,
Intervenor/Cross-Appellee.
___________________________

MICHAEL STEVEN MATHERLY,
As Trustee on behalf of the
MARIBEL MATHERLY TRUST,
as amended,
Plaintiff-Appellant/Cross-Appellee,

vs.

CARL W. MATHERLY,
Defendant-Appellee/Cross-Appellant.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, Michael D. Huppert,

Judge.

Former spouses appeal and cross-appeal the property division in their

dissolution-of-marriage decree. Trustee of the wife’s trust appeals the dismissal

of a breach-of-fiduciary-duty claim against the husband. AFFIRMED.
2

William W. Graham and Wesley T. Graham of Graham, Ervanian &

Cacciatore, L.L.P., Des Moines, for appellant/cross-appellee.

Shaun Thompson of Newman Thompson & Gray PC, Forest City, for

appellee/cross-appellant.

Joseph G. Gamble and Tara J. Higgins of Duncan, Green, Brown &

Langeness, P.C., Des Moines, for intervenor Mary Elizabeth Slezak.

Heard by Tabor, P.J., and Mullins and Bower, JJ.
3

MULLINS, Judge.

Maribel Matherly, and subsequently her estate, appeal, and Carl Matherly

cross-appeals, the property division in their dissolution-of-marriage decree.

Maribel contends that an equitable distribution of the marital estate required her to

receive the entirety of the marital property due to Carl’s negative contributions to

the marriage. Carl challenges the court’s finding that assets in an investment

account under Maribel’s name are a resulting trust in the name of their daughter,

Mary Elizabeth (MaryBeth), who intervened in the underlying trial. Carl contends

the assets are marital property to be divided equitably between himself and

Maribel. Michael Steven Matherly (Steven), as trustee of the Maribel Matherly

Trust, appeals the district court’s dismissal of his claims against Carl.

I. Background Facts and Proceedings

Carl and Maribel were married in September 1946. The marriage produced

three children, now adults: Sheryl, MaryBeth, and Steven. From the 1950s through

the pendency of the dissolution proceedings they lived in the same home in

Johnston. During the course of the marriage, Carl provided the majority of the

marital income while Maribel was primarily responsible for managing the home and

raising the children. In the late 1950s, Carl established Park Investment Company

(Park Investment), which provided financing for companies that were unable to

obtain financing through traditional bank loans. Park Investment was successful

for many years and provided Carl and Maribel with substantial income.

In the late 1950s or early 1960s, Carl provided financing to a company in

Forest City, Iowa. That business relationship continued for many years and Carl

eventually worked for that company, serving as vice president and on the board of
4

directors. Carl’s business activities required him to be away from the home for the

majority of the workweek, typically returning home on Friday or Saturday where he

remained for the weekend. Carl’s work often required him to be in Forest City.

In the mid-to-late 1970s, Carl began an extra-marital relationship with a

woman named Doris, who lived and owned a shop in Forest City. When Carl

travelled to Forest City for business, he stayed with Doris. At some point, Maribel

became aware of an extra-marital relationship, but she was unsure of who the

other party was at the time. When Maribel confronted Carl, he promised to end

the relationship. Unbeknownst to Maribel, Carl continued to live with Doris when

he travelled for business. Carl told Maribel and their children that he was working

in Illinois, Missouri, or Nebraska when he was actually with Doris in Forest City.

During the course of their marriage, Carl and Maribel gave each of their

children numerous gifts, including cash and stocks. In 1977, Carl helped MaryBeth

establish the Mary Elizabeth Matherly Trust (MEM Trust) with the proceeds of the

gifts from her parents. Carl was named as trustee. The terms of the trust required

Carl to pay MaryBeth the trust’s net income and any amount Carl, in his discretion,

deemed necessary for MaryBeth’s maintenance, health, and comfort until

MaryBeth turned fifty. Once MaryBeth turned fifty, MaryBeth was to receive the

remaining principal and the trust would terminate. Under the trust, Carl was not

required to provide an accounting of the trust to MaryBeth unless requested. He

did provide MaryBeth information about the trust’s earned interest each year so

MaryBeth could include that information in her tax returns. MaryBeth claimed she

did not receive a copy of the trust instrument.
5

In 1981, Carl received a salary of approximately $125,000 from the Forest

City company. Due to a business dispute, Carl left the company that year but did

not inform Maribel. He continued to tell her that he was working and traveling for

the Forest City company; but in reality, Carl did not obtain other paid employment

and his source of income consisted of proceeds from his investments and a farm

that he purchased in the 1970s (Fremont Farm).

He then began working in Doris’s shop for free, primarily handling the shop’s

bookkeeping. At the time Carl and Doris met, Doris had debts of approximately

$250,000. Carl arranged with Doris’s creditors to forgive her debt after she paid a

small percentage. Throughout their relationship, Carl gifted Doris money, a car,

paid for home improvements, and managed Doris’s investment accounts. When

with Doris in Forest City, Carl withdrew money from the marital bank account for

cash.

In 1985, Carl deeded the Fremont Farm to Steven seeking to remove his

name from any property of value in order to keep it from the reach of his creditors.

During the marriage, Carl created other trusts in order to protect assets from

creditor liability relating to his business work. He contends that despite the deed,

the Fremont Farm was not intended to be Steven’s property. The deed was

recorded a few days later.

In July 1988, a document (Trust Document A) was signed by both Carl and

Maribel and notarized. The document purported to establish the Maribel Matherly

Trust (Maribel Trust). The trust declaration listed Steven as the trustee. A second

trust document (Trust Document B) was also created in July 1988 but listed Carl

as the trustee. Trust Document B included Carl and Maribel’s signatures and was
6

notarized. Maribel did not remember signing two separate documents and only

remembered typing up one document. The listed notary public on both documents

filed an affidavit, stating she believed she only notarized one version of the trust

document. She believed that her handwritten name, date, and signature on both

documents appeared to be too identical to come from separate documents. Carl

initially denied altering either document. During trial, however, he stipulated Trust

Document B was an alteration. Both Trust Documents A and B provided that

Maribel and Carl would each receive one-half of the income of the trust. Upon the

death of either spouse, the other would then receive the entire income of the trust.

After both of their deaths, the trust residue would then be distributed equally to

their children and the trust dissolved.

In 1990, a third document (Trust Document C) was prepared and signed by

both Carl and Maribel that also purported to establish the Maribel Trust. Trust

Document C was not notarized. Trust Document C named Maribel as trustee and

provided the entire trust income would be paid to her. Upon Maribel’s death, the

trust income would then be paid to Carl and, after his death, the residue would be

distributed equally to their children and the trust dissolved. Maribel signed the

document as the designated settlor and trustee while Carl signed and was

designated as the beneficiary.

In 1989, Steven deeded the Fremont Farm to the Maribel Trust. The deed

was recorded in 1993. In 1996, a deed was recorded. The deed identified that it

was a correction and supplementation of the 1985 deed from Carl to Steven. The

correction deed listed Carl and Maribel as the grantors and the Maribel Trust as
7

the grantee. At the same time, Carl filed an affidavit identifying himself as the

trustee of the Maribel Trust.

During the course of the marriage, Carl oversaw the farm’s operations.

After the establishment of the Maribel Trust, he continued overseeing the farm and,

in addition, conducted business for the farm in the role of trustee of the Maribel

Trust. Monies received by the Fremont Farm from grain sales were deposited into

Carl and Maribel’s joint bank account. Within a few days, those monies were then

transferred into one of Carl’s investment accounts. Both Carl and Maribel made

the grain-sale deposits into their joint bank account. Both also designated

themselves as trustee of the Maribel Trust when endorsing checks for deposit.

In 1993, Carl transferred the proceeds of the MEM Trust into an investment

account designated “Maribel Matherly, Special M.E.M. Account” (Maribel-MEM

account). Carl claimed he received a letter from MaryBeth’s husband that led him

to believe that MaryBeth’s marriage was in trouble and her husband would attempt

to take the trust’s assets. He also claimed MaryBeth requested the transfer of the

MEM Trust assets in order to protect them from her husband. A communication

regarding the transfer from the financial institution holding the MEM Trust stated

that an authorization signed by MaryBeth was required to transfer the funds to the

Maribel-MEM account. The communication includes a notation that the request

was completed in March 1993. After Carl transferred the assets into the

investment account, he continued to act as if the account was for MaryBeth’s

benefit. When MaryBeth asked about the state of the MEM Trust, Carl reported

that it was “doing great.” In the following years, MaryBeth continued to sign

authorizations relating to the MEM Trust. Carl paid the taxes for the trust. In 2003,
8

he filed a tax return noting that it was the final return for the trust with zero interest

earned and no taxes owed. In approximately 2003, Carl terminated the MEM

Trust.

Carl deposited funds into the Maribel-MEM account at least once. In

November 2005, the Maribel-MEM account had a value of $228,224. Carl

subsequently removed the MEM designation from the account, leaving it in only

Maribel’s name (Maribel Matherly account). He testified that he removed the MEM

designation for multiple reasons, including his belief that he had extended

MaryBeth the same amount of money outside of the trust and he had already given

her more money than her siblings. By December, the statement for the same

account number listed only Maribel’s name. In June 2006, the month MaryBeth

turned fifty, the value of the Maribel Matherly account was $207,389.

During the course of the marriage, Carl admitted he often signed other

family member’s signatures on documents, claiming to do so for convenience

purposes since he was away from home for most of the week. This included

signing Maribel’s name on checks and on an investment document that allowed

transfers between accounts Maribel was associated with and an account for Doris.

He also admitted to signing Steven’s name under penalty of law as the designated

trustee of the Maribel Trust on a document sent to the Internal Revenue Service.

Eventually, Steven became suspicious of Carl and his activities and hired a

private investigator. Steven learned Carl was staying with Doris in Forest City

when he claimed to be elsewhere. Steven subsequently informed his sisters who

then informed Maribel. Maribel filed a petition for dissolution of marriage on

June 22, 2016. The next day, Steven filed suit against Carl, alleging Carl has
9

wrongfully held himself out to be and acted as the trustee of the Maribel Trust,

including executing documents and diverting income away from trust assets.

Steven further claimed that even if Carl was legally permitted to act on the trust’s

behalf, his actions of diverting trust income and assets constituted a breach of

fiduciary duty, a wrongful taking, and Carl had been unjustly enriched by his

actions. Steven assumed the duty of trustee of the Maribel Trust in June.

In July, Carl wrote a letter to MaryBeth and Sheryl asking for assistance

with some of the property at issue in this case. In the letter Carl stated:

[Steven] has shown [Maribel] as owning a Scottrade Account
with $250,000 value. [T]hat’s only partially true. Yes, the account is
in her name but with my conversation many times to you, MaryBeth,
that money is yours and has been for many years “You can have it
anytime you want,” I said. I hope I can get this error corrected. It’s
total value is “yours” not [Maribel’s].

MaryBeth claimed she was unaware of the transfer of the trust’s assets to

the investment account until she received the letter. After receiving the letter, she

investigated the circumstances of the trust and found documents relating to the

trust, including the instrument that created the trust and Carl’s letter requesting the

asset transfer to the Maribel-MEM designation. In August, Carl filed answers to

both petitions, denying the allegations of wrongdoing and suggested Maribel’s

dissolution petition was the result of Steven’s undue influence, Maribel’s dementia,

or both.

By agreement of the parties, the court consolidated the dissolution and trust

actions for purposes of trial, as the resolution of each case was dependent upon

the determination of whether the Maribel Matherly account was marital property.

Later, the court granted MaryBeth’s motion to intervene based upon the parties’
10

consent. MaryBeth asserted that the Maribel Matherly account listed by both

Maribel and Carl as a marital asset was the remnant of the MEM Trust.

At the time of trial, both Maribel and Carl were in their nineties. In January

2018, the court filed its rulings for both cases. It determined the Maribel Matherly

account was the successor to the MEM Trust and Carl’s transfer of the MEM Trust

assets into the Maribel-MEM account, which Carl subsequently renamed the

Maribel Matherly account, created a resulting trust in favor of MaryBeth. The court

found Carl’s claims about the MEM Trust and Maribel Matherly account lacked

credibility. Further, MaryBeth was not put on notice about the issues regarding the

ownership of the assets in the trust until Carl repudiated the trust’s existence in

2016. Carl’s statute-of-limitations defense thus failed and the court declared

MaryBeth the owner of the assets in the Maribel Matherly account, removing the

account from the court’s consideration of the marital property between Maribel and

Carl.

As for the Maribel Trust, the court determined Trust Document C was the

controlling instrument. As a result, the Maribel Trust owned all the interest in the

Fremont Farm. The court rejected Maribel’s contention that the farm’s placement

in the Maribel Trust created a gift and was thus her separate property not to be

included in the distribution of the marital estate. Despite the farm’s transfer into

the Maribel Trust, it remained a marital asset. The court ordered the Fremont Farm

be sold and the net proceeds divided equally between Carl and Maribel. Further,

the court ordered Maribel to continue to receive the entire income from the Maribel

Trust, the proceeds from the grain sales, as provided in Trust Document C. Carl
11

was not entitled to receive any of the trust income nor any of the farm revenue

from June 2016, when Steven assumed the trustee responsibility.

The court also rejected Maribel’s argument that the court’s division of the

martial estate should take into consideration Carl’s negative contributions. The

court did find Carl dissipated the estate through his transfer of marital assets to

Doris and an unaccounted decrease in his investment account from the time of the

court’s temporary orders in the dissolution matter and trial. Based upon these

findings, the court ordered the sale of the marital home and increased Maribel’s

share of the proceeds by $34,800.

With regard to Steven’s claims against Carl relating to the Maribel Trust,1

the court found that Maribel affirmed or consented to Carl’s decisions and conduct

when Carl acted as the trustee. Based upon these findings, the court determined

that Iowa Code section 633A.4506(1)(a) and (c) (2016) provided Carl immunity

from Steven’s claims. Accordingly, the court dismissed Steven’s action against

Carl.

Maribel appeals,2 contending the trial court erred by failing to recognize

Carl’s negative contribution to the marital estate in its determination of the

distribution of the marital estate. Further, she challenges the dismissal of the trust

claim, claiming the suit was not barred by section 633A.4506 because she did not

consent to or affirm Carl’s actions relating to the Maribel Trust as she had no

1
The only trust document that identified Steven as trustee was Trust Document A, which
Steven did not sign.
2
Maribel died during the pendency of this appeal. The executor of her estate was
substituted as the party. See Iowa Code § 625A.17. For ease of readership, we will
continue to identify the claims as hers rather than claims of her estate.
12

knowledge of his actions and had no access to the information. She also requests

an award of appellate attorney fees.

Carl cross-appeals, contending the trial court erred by not awarding him half

of the farm income for the 2016 crop year until the time the farm is sold. He also

challenged the determination that the Maribel Matherly account was a resulting

trust in favor of MaryBeth. He contends he disavowed the MEM Trust in 2005 and

claimed the property as his own when he removed the MEM designation from the

investment account. Further, he argues that because he failed to distribute the

trust assets in June 2006 when MaryBeth turned fifty, the statute of limitations

either began in 2005 or at the latest June 2006. Because MaryBeth did not bring

her claim until the present action, her claim to the investment account is barred.

He further argues the court erred by finding the MEM Trust was originally funded

with $250,000 in assets as the record is insufficient to prove the value of the trust

when it was established in 1977. Carl also requests an award of appellate attorney

fees, payment to be apportioned between Maribel and Steven.

II. Standard of Review

We review dissolution-of-marriage cases de novo. Iowa R. App. P. 6.907;

In re Marriage of Larsen, 912 N.W.2d 444, 448 (Iowa 2018). “On appeal, we give

weight to the fact findings of the trial court but are not bound by them.” Larsen,

912 N.W.2d at 448. We will not disturb the trial court’s ruling unless there was “a

failure to do equity.” In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa

2013). “Proceedings concerning the internal affairs of a trust . . . are tried in equity”

therefore our review is de novo. In re Trust No. T-1 of Trimble, 826 N.W.2d 474,
13

482 (Iowa 2013). We review the trial court’s “interpretation of statutory provisions

for corrections of errors at law.” Id.

III. Analysis

A. Marital Estate

The court must equitably divide the martial estate. In re Marriage of Hazen,

778 N.W.2d 55, 59 (Iowa Ct. App. 2009). “The partners in the marriage are entitled

to a just and equitable share of the property accumulated through their joint

efforts.” Id. “[M]arriage does not come with a ledger,” In re Marriage of Fennelly,

737 N.W.2d 97, 103 (Iowa 2007), so the court must consider what is equitable and

fair depending on the circumstances. Hazen, 778 N.W.2d at 59. However, what

is equitable may not necessarily mean an equal division of the marital property. In

re Marriage of Hansen, 733 N.W.2d 683, 702 (Iowa 2007). Instead, the court must

consider a number of factors to determine what is equitable, including:

(a) The length of the marriage.
(b) The property brought to the marriage by each party.
(c) The contribution of each party to the marriage, giving
appropriate economic value to each party’s contribution in
homemaking and child care services.
(d) The age and physical and emotional health of the parties.
....
(i) Other economic circumstances of each party, including
pension benefits, vested or unvested. Future interests may be
considered, but expectancies or interests arising from inherited or
gifted property created under a will or other instrument under which
the trustee, trustor, trust protector, or owner has the power to remove
the party in question as a beneficiary, shall not be considered.
(j) The tax consequences to each party.
....
(m) Other factors the court may determine to be relevant in an
individual case.

Iowa Code § 598.21(5). While we review the case de novo, “we accord the trial

court considerable latitude in making [the marital-property-distribution]
14

determination and will disturb the ruling only when there has been a failure to do

equity.” In re Marriage of Okland, 699 N.W.2d 260, 263 (Iowa 2005) (quoting In re

Marriage of Romanelli, 570 N.W.2d 761, 763 (Iowa 1997)).

1. Maribel Matherly Account

Before making an equitable division of the marital estate, we must first

determine which property is marital property and thus subject to division. Here,

the parties disagree about the classification of the Maribel Matherly account. Carl

challenges the trial court’s determination that the Maribel Matherly account was a

resulting trust in favor of MaryBeth, contending the account is marital property to

be divided between himself and Maribel. Maribel conceded during trial that despite

the fact that the account is in her name, the funds in the account are not marital

property and instead belong to MaryBeth.

When “the owner of property gratuitously transfers the property and

manifests in the trust instrument an intention that the transferee should hold the

property in trust but the trust fails, the transferee holds the trust estate as a

resulting trust for the transferor or the transferor’s estate.” Iowa Code

§ 633A.2106. “A resulting trust is a reversionary, equitable interest implied by law

in property that is held by a transferee, in whole or in part, as trustee for the

transferor or the transferor’s successors in interest.” Restatement (Third) of Trusts

§ 7 (Am. Law Inst. 2003). “[A] resulting trust arises from an intention that is legally

attributed to a transferor based on the nature of the transaction, rather than from

manifested intent.” Id. § 7 cmt. a.

Here, no one disputes that in 1977, MaryBeth provided the assets and

expressly stated her intention to create a trust with Carl as trustee, evidenced in
15

the document establishing the trust. Carl also acknowledged the assets in the

MEM Trust were for MaryBeth’s benefit. The MEM Trust ultimately failed when

Carl, without consent from MaryBeth,3 transferred the assets into an investment

account under Maribel’s name. Once Carl transferred the assets into the

investment account under Maribel’s name and designated it with MaryBeth’s

initials, he created a resulting trust, in favor of MaryBeth.

Carl’s actions after the transfer provide further evidence that a resulting trust

was established as he acted with the intention that the assets in the account were

for MaryBeth’s benefit. First, he initially designated the investment account with

MaryBeth’s initials. Further, even after removing her initials, he held out the

account to be for MaryBeth and informed her of the status of the account when

asked. Carl continued to hold the account out as MaryBeth’s even after the

beginning of proceedings in this case. In July 2016, after Maribel filed for

dissolution, Carl wrote to MaryBeth and her sister, clearly stating that the funds in

the investment account were MaryBeth’s. At trial, Carl also testified that he

continued to treat the investment account as MaryBeth’s up until the dissolution

proceedings.

While Carl provides several arguments about other claims MaryBeth may

have against him as a result of his actions relating to her trust, the sole issue

presented here is who is the owner of the assets in the Maribel Matherly account

and whether those assets are marital property to be divided in the dissolution case.

Upon our review of the record, we agree with the trial court that a resulting trust

3
The trial court specifically found Carl’s claim that MaryBeth asked him to transfer the
funds lacked credibility.
16

was established in favor of MaryBeth when Carl transferred the assets of the MEM

Trust into an investment account, first designated as Maribel-MEM and

subsequently the Maribel Matherly account. Accordingly, the assets in the Maribel

Matherly account are not marital property and are not subject to division in the

distribution of the marital estate. We affirm the trial court on this matter.

2. Marital Property Distribution

We now turn to the distribution of the marital estate. First, Carl’s challenge

to the marital-estate distribution focuses on the farm income for the harvest years

of 2016 and 2017. He challenges the trial court’s order that Maribel would continue

to receive the entirety of the farm income as provided in Trust Document C and

that he had no claim to the farm revenue for crop years 2016 and 2017, as Steven

assumed the responsibility as trustee in June 2016. Carl contends he should

receive half of the farm proceeds from those harvest years, arguing that whether

Trust Document A or C controls, the income from the farm proceeds is marital

property to be distributed equitably between the parties. Maribel seemingly does

not contest which trust document controls with respect to the court’s determination

that she would continue to receive the entirety of the farm income from harvest

years 2016 and 2017. Instead, Maribel argues the decision to award the income

and harvest proceeds was an exercise of the court’s discretion when dividing the

marital estate.

On our review, we agree the farm proceeds Maribel received under the trust

were marital property given the status of the farm as marital property when it was

bought and has remained as marital property since. Thus, the farm income was

subject to the court’s division, and after taking into consideration the factors
17

contained in Iowa Code section 598.21(5), we do not find the court granting Maribel

the farm income was inequitable given the circumstances of this case.

Accordingly, we affirm.

Maribel challenges the final marital-estate distribution, arguing the trial court

failed to take into consideration Carl’s negative contribution to the marriage when

dividing the marital estate. She argues she should have been awarded the entire

marital estate due to Carl’s (1) failure to earn income after leaving his Forest City

job and then subsequently working without compensation at Doris’s shop, (2)

transfer of marital assets to Doris and other unknown accounts, (3) reckless

investment of marital funds, and (4) dissipation of marital assets during the

pendency of this case.

Maribel cites to a number of cases outside Iowa in which those courts

unequally divided marital property based on one spouse’s financial misconduct

and neglect. However, “Iowa is a no-fault state.” Fennelly, 737 N.W.2d at 103.

Spouses agree to accept one another “for better or worse.” Each
person’s total contributions to the marriage cannot be reduced to a
dollar amount. Many contributions are incapable of calculation, such
as love, support, and companionship. “Financial matters . . . must
not be emphasized over the other contributions made to a marriage
in determining an equitable distribution.”

Id. at 104 (quoting In re Marriage of Miller, 552 N.W.2d 460, 465 (Iowa Ct.

App.1996)). Maribel does not point to any Iowa precedent in which a trial court

considered the negative contributions of one spouse in its determination of an

equitable division of the marital property. Upon our review, we agree with the trial

court and find that awarding Maribel the entirety of the marital estate based upon
18

Carl’s negative contributions would be inequitable.4 Further, after taking into

consideration the circumstances in this case and the section 598.21(5) factors, we

find the trial court’s division of the marital estate was equitable and affirm the

marital-property distribution.

B. Maribel Trust

Steven, as trustee of the Maribel Trust, challenges the court’s finding his

claims of breach of fiduciary duty against Carl were barred pursuant to Iowa Code

section 633A.4506(1)(a) and (c). In making its decision, the trial court determined

Trust Document C governed the trust after finding both Trust Documents A and B

unenforceable as Steven never signed Trust Document A as trustee and Carl

altered Trust Document B.

Carl is only named the trustee of the Maribel Trust under Trust Document

B, and we agree with the trial court that this document is invalid. Carl conceded at

trial Trust Document B was an alteration of Trust Document A. As for Trust

Document A, in order for it to be a valid trust instrument, it must be written and

either “signed by the trustee” or one that “convey[s] the trust property signed by

the settlor.” Iowa Code § 633A.2103(1). Steven did not sign Trust Document A,

and the trust document does not identify that the farmland is or would be placed

into the trust. Further, in 1989, the deed conveying the farmland to the Maribel

4
The trial court did recognize Maribel’s claim of dissipation and adjusted the marital-
property distribution based upon Carl’s dissipation of marital assets. Unlike Maribel’s
negative-contribution claim, the dissipation doctrine has precedential support. See In re
Marriage of Kimbro, 826 N.W.2d 696, 700–01 (Iowa 2013) (discussing the dissipation
doctrine); Fennelly, 737 N.W.2d at 104 (“[D]issipation of assets is a proper consideration
when dividing property.”); In re Marriage of Goodwin, 606 N.W.2d 315, 321 (Iowa 2000)
(“[A] spouse’s disposal of assets that would otherwise be subject to division in the
dissolution may properly be considered in making an equitable distribution of the parties’
property.”). Maribel does not challenge the adjustments on appeal.
19

Trust was signed by Steven. Section 633A.2103(1) required the settlor, Maribel,

to sign the written instrument. Accordingly, neither Trust Document A nor B serve

to establish an enforceable trust under section 633A.2103(1).

Under subsection (3) of section 633A.2103, “[i]f an owner of property while

living transfers property to another person to hold upon a trust, the written

instrument evidencing the trust must be signed” either “by the settlor, concurrently

with or before the transfer” or “by the trustee, concurrently with or before the

transfer, or after the transfer but before the trustee has transferred the property to

a third person.” Here, Carl admittedly deeded the farm to Steven in order to hide

the property from creditors related to his investment business. Steven then

deeded the farm to the Maribel Trust in 1989. As determined above, this document

did not establish an enforceable trust, as Maribel did not sign the conveyance. She

did, however, sign Trust Document C, which purported to establish the Maribel

Trust. We agree with the trial court that Trust Document C is “inartfully drafted” as

its terms provided for Maribel’s benefit but designated Carl as the beneficiary.

However, we agree that this is the controlling trust instrument as it is the only one

that meets the elements required under section 633A.2103(3)(b). Though Trust

Document C was executed after Steven’s conveyance of the property to the trust,

at the time Maribel signed Trust Document C as its designated trustee, she had

not transferred the farm to another party. Further, Maribel and Carl both signed

and quitclaimed their interest in the farm to the Maribel Trust well after Trust

Document C’s execution. Accordingly, Trust Document C is the controlling trust

document.
20

While Trust Document C designates Maribel as the trustee, Carl acted as

such until 2016. Neither party seemingly disputes this, though Carl contends that

Maribel sometimes acted as trustee. After June 2016, Steven took over the role

of trustee. Steven’s claims are that while Carl acted as the trustee, Carl breached

the duties of a trustee by failing to provide the entirety of trust income to Maribel

as required by Trust Document C and instead took that income and placed it into

an investment account. Further, Steven contends Carl failed to prudently invest

the farm proceeds once deposited into his investment account and, after selling

parts of the farmland, he did not keep the sale proceeds separate from other funds

nor preserve them for the trust. Instead, Steven argues Carl gifted a portion of

sale proceeds to the three children and Doris, but made no such gift to Maribel.

Steven further argues Carl’s failure to prudently invest the trust income resulted in

damage to the accumulated trust income left in the trust. Steven seeks damages

representing the difference between the current value of the trust and what he

believes it should have been if properly managed.

The trial court found that Maribel consented to or affirmed Carl’s actions

which constituted breaches of fiduciary duty, therefore under Iowa Code section

633A.4506(1)(a) and (c), Steven’s claims were barred. On appeal, Steven argues

that Maribel was unaware of Carl’s transactions relating to the trust therefore she

could not consent nor affirm to his actions and thus section 633A.4506 is not a bar

to his claims of breach of fiduciary duty.

Unless the terms of a trust expressly make the trust irrevocable, the settlor

of a trust may modify or revoke the trust. Id. § 633A.3102(1). Here, the language

of the trust does not make it irrevocable, as Maribel reserved her right to amend,
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revoke, or alter the trust. “For a revocable trust, however, the trustee’s duties of

prudence, loyalty, and impartiality are owed solely to the settlor while the settlor is

still alive and competent.” Trimble, 826 N.W.2d at 488. “A violation by a trustee

of a duty the trustee owes a beneficiary is a breach of trust.” Iowa Code

§ 633A.4501(1).

A beneficiary may charge a trustee who commits a breach of trust
with the amount required to restore the value of the trust property
and trust distributions to what they would have been had the breach
not occurred, or, if greater, the amount of profit lost by reason of the
breach.

Id. § 633A.4503. However, section 633A.4506(1) provides a trust beneficiary may

not hold a trustee liable for a breach of the trust if the beneficiary either “consents

to the conduct” or “affirms the transaction” constituting the breach. Nevertheless,

section 633A.4506(2) and (3) does provide exceptions to trustee immunity:

(2) A beneficiary may hold a trustee liable for breach of trust
despite a consent, release, or affirmance by the beneficiary if, at the
time of the consent, release, or affirmance, all of the following
applied:
(a) The beneficiary did not know of the beneficiary’s rights.
(b) The beneficiary did not know the material facts known to
the trustee or which the trustee should have known.
(c) The trustee did not reasonably believe that the beneficiary
knew the beneficiary’s rights and that the beneficiary knew material
facts known to the trustee or which the trustee should have known.
(3) A beneficiary may hold a trustee liable for breach of a trust
despite a consent, release, or affirmance by the beneficiary if the
consent, release, or affirmance was induced by improper conduct of
the trustee.

Steven contends the trial court erred by finding that Maribel was aware of

how Carl invested the monies derived from the Fremont Farm and allowed him to

continue for decades. He challenges the court’s finding that though Maribel never

opened the statements from the investment account, she had access to its
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equivalent as the statements were incorporated into the couple’s joint tax filings.

Steven claims the court erred by deciding, based upon these findings, that Maribel

affirmed and consented to Carl’s action, thus barring claims of breach of fiduciary

duty.

Neither challenges the court’s finding that Carl acted as trustee of the

Maribel Trust, despite not being designated as such. Maribel signed Document C

which named her as trustee but she allowed Carl to act as trustee. Maribel signed

some documents as trustee, but for the most part, Carl held himself out to be

trustee and took actions in the trust’s name. This included depositing proceeds

from the farm into their joint bank account and then subsequently transferring those

proceeds into one of his investment accounts.

Carl primarily ran the Fremont Farm. However, Maribel kept the records for

the farm. She kept track of the farm’s yield, expenses, and income. Maribel

testified and Steven concedes that she was aware that the farm proceeds that both

Carl and Maribel initially deposited into the couple’s joint bank account were then

transferred into the investment accounts. Maribel made several of the deposits

into the investment accounts and balanced the couple’s checkbook for their joint

bank account. Further, while Steven contends that Maribel did not have any

access to the investment accounts information and thus was unaware of what

occurred within those accounts, Maribel admitted she reviewed the information in

the couple’s tax returns. She initially testified that Carl hid the information by

folding over the form so that only the signature block was visible, but clarified under

cross-examination that she reviewed all of the entries on the form. Maribel also

signed each return under penalty of perjury stating that she “examined [the] return
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and the accompanying schedules and statements,” and the information contained

in the return was “true, correct, and complete.” Each return contained tax

information and schedules from the investment accounts. Based upon our review

of the record, we agree with the trial court that Maribel had access to the equivalent

of the monthly investment account statements. Thus, she was or should have

been aware of Carl’s actions. Accordingly, we find she consented to and affirmed

Carl’s conduct he undertook as trustee of the Maribel Trust. We also find no

exception applies and, as such, Steven’s claims of breach of fiduciary duty against

Carl are barred pursuant to section 633A.4506. We affirm the court’s decision.

C. Appellate Attorney Fees

On appeal, “attorney fees are not a matter of right, but rather rest in this

court’s discretion.” Okland, 699 N.W.2d at 270. We consider “the needs of the

party seeking the award, the ability of the other party to pay, and the relative merits

of the appeal.” In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006) (quoting

Okland, 699 N.W.2d at 270). Based upon these considerations, we decline to

award appellate attorney fees.

IV. Conclusion

We find Carl created a resulting trust in favor of his daughter, MaryBeth,

when he transferred the assets of her trust into an investment account without her

consent. The resulting trust is not marital property and not subject to the court’s

division of the marital estate. We find the trial court’s division of the marital estate

equitable, taking into consideration the factors under Iowa Code section 598.21(5)

and the circumstances in this case. We further find Steven’s claims against Carl

relating to Maribel’s trust are barred under Iowa Code section 633A.4506. Based
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upon these findings, we affirm the trial court’s decision in its entirety. We decline

to award appellate attorney fees. Costs on appeal are assessed one-third to

Maribel’s estate, one-third to Carl, and one-third to the Maribel Matherly Trust.

AFFIRMED.