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Language of trust overrides statutes, COA rules

November 17, 2014

A man’s promise to sue his brother and deplete their father’s trust of its assets resulted in him being ordered to pay $13,166 in attorney fees to the trust.

Walter Penner created the Walter Penner Living Trust and named his sons, Ronald, Stanley and Frank as beneficiaries. Ronald was designated as the trustee. After the patriarch’s death, Stanley filed a Petition for Trustee’s Accounting for Order to Sell Real Estate and Related Matters, alleging Ronald had committed certain breaches of the trust.

The Lake Circuit Court denied Stanley’s claims and subsequently ordered him to pay $13,166 in attorney fees.

In In the Matter of the Walter Penner Trust Under Agreement Created by the Grantor, Walter Penner on April 13, 2010, Stanley Penner v. Ronald Penner, 45A03-1212-TR-516, the Indiana Court of Appeals affirmed. It also remanded for the trial court to determine the trust’s appellate attorney fees.
 
On appeal, Stanley again raised his breach of trust argument. He argued he was entitled to an accounting of the Penner Trust as provided in Indiana Codes 30-4-3-6(b) and 30-4-5-12(a).

Although these statutes require access to a trust’s accounting, the Court of Appeals found the laws indicate these requirements apply only when the terms of the trust to do provide otherwise. The COA agreed with the trial court that the language in the Penner Trust was not ambiguous and, therefore, the trust’s provisions overrode the statutes.

Stanley also asserted the terms of the Penner Trust were violated when Ronald delayed selling Walter’s home and when he paid Walter’s medical and funeral expenses out of his personal account rather than from the trust.

The Court of Appeals ruled both assertions were an invitation to reweigh evidence which it declined to do.

The three-member panel noted Ronald presented evidence he waited to list Walter’s house until the real estate market improved so as to get the most from the sale. The COA found no evidence that Ronald improperly used his personal funds for the benefit of the trust.   

 

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