Monday, October 22, 2012
A Settlor Who is Both the Trustee and Sole Beneficiary Owes No Duties to the Remainder Beneficiaries
The settlor, trustee, and sole beneficiary for life of a revocable trust entered into a purchase agreement with her son to sell him farm land held in the trust at a price below fair market value. Before the agreement could be carried out, the settlor resigned as the trustee and the successor trustee repudiated the purchase agreement. The son sued for specific performance of the agreement, lost at trial, but won his appeal in Fulp v. Gilliland, 972 N.E.2d 955 (Ind. Ct. App. 2012). The court held that the settlor amended the revocable trust by entering into the agreement and that she did not owe fiduciary duties to the remainder beneficiaries.
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.