Thursday, October 1, 2020
In Bergal v. Bergal, the Indiana Court of Appeals concluded that the Dead Man Statute still applies, however, with limitations. Milton Bergal had four children from a precious marriage. In 2009, Milton married Linda and created a new estate plan in the same year.
In this new estate plan, Milton created a trust and executed a "new pour-over will - such that upon his death, all assets in his probate estate were to be transferred to his trust."
Two subtracts would then be created from this trust:
- Trust A: For Linda's benefit alone and she would be co-trustees with Milton's accountant
- Trust B: Solely for the benefit of Milton's son, David, and David would be the sole trustee.
Milton become sick with dementia and Alzheimer's disease. During this time, "six investment accounts were taken out of the trust and modified so that Linda was named the primary beneficiary." Linda used power of attorney to perform one of these, but Milton effectuated the other modifications.
Milton died in 2016, leading to the discovery of the changes made to the trust assets. David sued Linda after she refused to transfer the rest of the assets back to the trust.
The trial court decided in David's favor and Linda appealed.
The Indiana Court of Appeals did an analysis of the Dead Man Statute stating:
"it applies in suits or proceedings (a) in which an executor or administrator is a party; (b) involving matters that occurred during the lifetime of the decedent; and (c) where a judgment or allowance may be made or rendered for or against the estate represented by the executor or administrator." and also that "when the Dead Man’s Statute applies, a person who is a necessary party to the case and whose interest is adverse to the estate is not a competent witness as to matters against the estate."
The Court of Appeals held that the Statute did apply to Milton's trust because it was "central" to his estate plan making it "akin to the estate itself."
See Sarah Jenkins & Jason M. Rauch, Indiana Court of Appeals: Dead Man’s Statute Alive and Well in Trust Dispute, Faegre Drinker, September 29, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.