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Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Sunday, February 16, 2014

Duty to the Remainder Beneficiaries?

Gavel
The trustee of a revocable trust owes no fiduciary duties to the remainder beneficiaries.  The settlor of revocable trust was also the trustee.  The principal asset of the trust was the settlor’s farm.  Some years after the creation of the trust, the trustee sold the farm to one of her children for less than the fair market value.  The buyer was a remainder beneficiary along with the settlor’s two other children.  One of the other children objected to the sale, arguing that the trustee had breached her duties to the other remainder beneficiaries. 
 
In Fulp v. Gilliland, 998 N.E.2d 204 (Ind. 2013), the trial court found a breach of fiduciary duty and the intermediate appellate court affirmed the decision. The court reasoned the trustee has sold the farm as its settlor and had therefore amended the trust.  On appeal, the Supreme Court of Indiana held that the settlor (in this case the trustee) has no duties to the remainder beneficiaries and specifically stated that the settlor had not amended the trust. 
 
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.
 

http://lawprofessors.typepad.com/trusts_estates_prof/2014/02/duty-to-the-remainder-beneficiaries.html

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Comments

interesting. link to opinion

http://www.in.gov/judiciary/opinions/pdf/11221301LHR.pdf

best/b

Posted by: brian | Feb 16, 2014 7:52:01 AM

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