ILNews

Justices: Trustee of revocable trust serves self

Back to TopCommentsE-mailPrintBookmark and Share

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.

 

 

ADVERTISEMENT

  • 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."

      Post a comment to this story

      COMMENTS POLICY
      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
       
      You are legally responsible for what you post and your anonymity is not guaranteed.
       
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
       
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
       
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
       

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by

      facebook - twitter on Facebook & Twitter

      Indiana State Bar Association

      Indianapolis Bar Association

      Evansville Bar Association

      Allen County Bar Association

      Indiana Lawyer on Facebook

      facebook
      ADVERTISEMENT
      Subscribe to Indiana Lawyer
      1. I was wondering about the 6 million put aside for common attorney fees?does that mean that if you are a plaintiff your attorney fees will be partially covered?

      2. My situation was hopeless me and my husband was on the verge of divorce. I was in a awful state and felt that I was not able to cope with life any longer. I found out about this great spell caster drlawrencespelltemple@hotmail.com and tried him. Well, he did return and now we are doing well again, more than ever before. Thank you so much Drlawrencespelltemple@hotmail.comi will forever be grateful to you Drlawrencespelltemple@hotmail.com

      3. I expressed my thought in the title, long as it was. I am shocked that there is ever immunity from accountability for ANY Government agency. That appears to violate every principle in the US Constitution, which exists to limit Government power and to ensure Government accountability. I don't know how many cases of legitimate child abuse exist, but in the few cases in which I knew the people involved, in every example an anonymous caller used DCS as their personal weapon to strike at innocent people over trivial disagreements that had no connection with any facts. Given that the system is vulnerable to abuse, and given the extreme harm any action by DCS causes to families, I would assume any degree of failure to comply with the smallest infraction of personal rights would result in mandatory review. Even one day of parent-child separation in the absence of reasonable cause for a felony arrest should result in severe penalties to those involved in the action. It appears to me, that like all bureaucracies, DCS is prone to interpret every case as legitimate. This is not an accusation against DCS. It is a statement about the nature of bureaucracies, and the need for ADDED scrutiny of all bureaucratic actions. Frankly, I question the constitutionality of bureaucracies in general, because their power is delegated, and therefore unaccountable. No Government action can be unaccountable if we want to avoid its eventual degeneration into irrelevance and lawlessness, and the law of the jungle. Our Constitution is the source of all Government power, and it is the contract that legitimizes all Government power. To the extent that its various protections against intrusion are set aside, so is the power afforded by that contract. Eventually overstepping the limits of power eliminates that power, as a law of nature. Even total tyranny eventually crumbles to nothing.

      4. Being dedicated to a genre keeps it alive until the masses catch up to the "trend." Kent and Bill are keepin' it LIVE!! Thank you gentlemen..you know your JAZZ.

      5. Hemp has very little THC which is needed to kill cancer cells! Growing cannabis plants for THC inside a hemp field will not work...where is the fear? From not really knowing about Cannabis and Hemp or just not listening to the people teaching you through testimonies and packets of info over the last few years! Wake up Hoosier law makers!

      ADVERTISEMENT