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Trust Instrument Can’t Completely Insulate Trustee From Liability

September 2, 2016

Authors

Luke Lantta

Trust Instrument Can’t Completely Insulate Trustee From Liability

September 2, 2016

by: Luke Lantta

Settlors often want to give their trustees peace of mind that they can administer the trust without a court looking over their shoulder and second-guessing every act they take.  So, estate planners will often put a broad exculpatory clause in the trust instrument to relieve the trustee from liability for certain actions in administering the trust.  But, just as we have seen in other jurisdictions, in In re Scott David Hurwich 1986 Irrevocable Trust, the Court of Appeals of Indiana recognized that there is a limit as to how far the relief from liability can extend.

A settlor/beneficiary of a trust sued the trustee, alleging mismanagement of trust assets, commingling trust assets with the trustee’s own funds, conversion of trust assets, waste of trust

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Separate Writing Could Not Modify Trust Or Dispose Of Real Property

October 23, 2014

Authors

Luke Lantta

Separate Writing Could Not Modify Trust Or Dispose Of Real Property

October 23, 2014

by: Luke Lantta

Trustors frequently build into their trust instrument a provision through which they can dispose of property through a list, drafted later, but attached to the trust instrument. Such a list can provide a simple way of distributing tangible personal property without the need to modify or amend the entire trust every time the trustor acquires new personal property or changes her mind about who should get what. But such a list has its limits. As the Indiana Court of Appeals explained in Turner v. Kent, under Indiana law a list cannot dispose of real property.

Alexander and Selma Kazlauski established a trust that provided that:

We may from time to time indicate our desire that specific gifts be made from this living trust upon the death of the survivor of

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Indiana Guardians Not Permitted To File Petitions For Dissolution Of Marriage

November 7, 2013

Authors

Luke Lantta

Indiana Guardians Not Permitted To File Petitions For Dissolution Of Marriage

November 7, 2013

by: Luke Lantta

In contrast to a case from Michigan we looked at earlier this year, in McGee v. McGee, the Indiana Court of Appeals has reaffirmed that Indiana statutes do not authorize a guardian to file a petition for dissolution of marriage on behalf of his or her ward.

While Indiana statutes allow the guardian of an incapacitated person to take action and to make decisions for the benefit of an incapacitated person, the filing of a petition for dissolution of marriage on behalf of an incapacitated person is not one of those actions or decisions.

 

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Trust Termination Failed Where Petitioner Could Not Demonstrate Circumstances Not Anticipated By The Settlor

March 13, 2013

Authors

Luke Lantta

Trust Termination Failed Where Petitioner Could Not Demonstrate Circumstances Not Anticipated By The Settlor

March 13, 2013

by: Luke Lantta

It usually takes a lot to convince a judge to terminate a trust.  The grantor wanted assets held in trust for a reason.  Therefore, if you want to go against the grantor’s intent and terminate a trust, then you better give the court a very good reason why termination is appropriate.  And, there may very well be good reasons to terminate a trust.  That’s why many states have a statutory method for terminating or modifying a trust.

In Kristoff v. Centier Bank, Amy Jean Kristoff tried to use Indiana‘s statute to terminate or modify a trust created by her mother.  The Court of Appeals of Indiana found that Amy did not satisfy her burden under the statute because Amy could not demonstrate the existence of circumstances not anticipated by the settlor of the trust.

What were the unanticipated circumstances Amy was claiming warranted termination of the trust?

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