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Justices: Trustee of revocable trust serves self

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The Indiana Supreme Court accepted a revocable trust case to answer the first impression question: While a trust is revocable, whom does the trustee serve? The justices concluded that an Indiana woman, as trustee, served herself.

In Harold O. Fulp, Jr. v. Nancy A. Gilliland, 41S01-1306-TR-426, Harold Fulp Jr. sought specific performance of the purchase agreement he made with his elderly mother to buy the family farm at a discounted price. Ruth Fulp placed the farm in a revocable trust and was the trustee, primary beneficiary and settlor. Her daughter Nancy Gilliland, who became successor trustee after Ruth Fulp resigned as trustee, refused to proceed with the sale. Fulp Jr. had purchased the farm at the same per-acre discount that Gilliland had paid when she previously purchased another portion of the farm.  

The trial court denied specific performance because it found Ruth Fulp breached her fidicuary duty to her children by selling the farm at a low price and Fulp Jr. breached his fiduciary duty as a beneficiary by participating in the sale. The Indiana Court of Appeals affirmed, believing Ruth Fulp had sold the farm as settlor, not trustee.

“Nancy sought transfer, asking us to decide whether the trustee of a revocable trust owes a duty to the settlor alone or also to the remainder beneficiaries,” Justice Loretta Rush wrote. “We granted transfer to address that issue, and we conclude that while a revocable trust is revocable, the trustee only owes a duty to the settlor. Therefore, Ruth was free to sell the farm as trustee, as the purchase agreement reflected, without breaching any fiduciary duty. And since Ruth owed her children no duty as trustee, she had no need to sell the farm as settlor, as the Court of Appeals concluded—nor would the facts in this case support any intent to amend the Trust.”

Ruth Fulp’s fiduciary duty was to herself, as settlor and primary beneficiary. That duty does not extend to her beneficiary children, because that would mean she was serving two masters, the justices held. Such conflicting duties would essentially make the trust irrevocable because complying as trustee with her own wishes to revoke the trust would breach the purported duty to the remainder beneficiaries by placing her own interests above theirs.

Since the trial court misinterpreted the trust and law by determining Ruth Fulp had a duty to her children that she breached and Fulp Jr. aided in that breach, the court abused its discretion in denying specific performance, Rush wrote.

 

 

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  • mo better
    Victim: Dishonest Men Song: "John Wesley Harding" (1967) Method: A gun in every hand, i.e., two guns Motive: Money; straightening out situations; avoiding foolish moves Verdict: No charge held against him could they prove
  • bob zimmmerman
    Huh is that the guy who shot trayvohn? lol
    • Cannot resist
      Well I think Robert Zimmerman sang it best, "You're gonna have to serve somebody, yes indeed You're gonna have to serve somebody, Well, it may be the devil or it may be the Lord But you're gonna have to serve somebody."

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      1. Ah yes... Echoes of 1963 as a ghostly George Wallace makes his stand at the Schoolhouse door. We now know about the stand of personal belief over service to all constituents at the Carter County Clerk door. The results are the same, bigotry unable to follow the directions of the courts and the courts win. Interesting to watch the personal belief take a back seat rather than resign from a perception of local power to make the statement.

      2. An oath of office, does it override the conscience? That is the defense of overall soldier who violates higher laws, isnt it? "I was just following orders" and "I swore an oath of loyalty to der Fuhrer" etc. So this is an interesting case of swearing a false oath and then knowing that it was wrong and doing the right thing. Maybe they should chop her head off too like the "king's good servant-- but God's first" like St Thomas More. ...... We wont hold our breath waiting for the aclu or other "civil liberterians" to come to her defense since they are all arrayed on the gay side, to a man or should I say to a man and womyn?

      3. Perhaps we should also convene a panel of independent anthropological experts to study the issues surrounding this little-known branch of human sacrifice?

      4. I'm going to court the beginning of Oct. 2015 to establish visitation and request my daughters visits while she is in jail. I raised my grandchild for the first two and half years. She was born out of wedlock and the father and his adopted mother wantwd her aborted, they went as far as sueing my daughter for abortion money back 5mo. After my grandchild was born. Now because of depression and drug abuse my daughter lost custody 2 and a half years ago. Everyting went wrong in court when i went for custody my lawyer was thrown out and a replacment could only stay 45 min. The judge would not allow a postponement. So the father won. Now he is aleinating me and my daughter. No matter the amount of time spent getting help for my daughter and her doing better he runs her in the ground to the point of suicide because he wants her to be in a relationship with him. It is a sick game of using my grandchild as a pawn to make my daughter suffer for not wanting to be with him. I became the intervener in the case when my daughter first got into trouble. Because of this they gave me her visitation. Im hoping to get it again there is questions of abuse on his part and I want to make sure my grandchild is doing alright. I really dont understand how the parents have rights to walk in and do whatever they want when the refuse to stand up and raise the child at first . Why should it take two and a half years to decide you want to raise your child.The father used me so he could finish college get a job and stop paying support by getting custody. Support he was paying my daughter that I never saw.

      5. Pence said when he ordered the investigation that Indiana residents should be troubled by the allegations after the video went viral. Planned Parenthood has asked the government s top health scientists at the National Institutes of Health to convene a panel of independent experts to study the issues surrounding the little-known branch of medicine.

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