A split appellate panel reversed in a trust dispute between siblings on Monday, concluding that the language in their mother’s trust regarding her son was ultimately a restraint on marriage and therefore void.
In February 2018, siblings Roger Rotert and Connie Stiles found themselves on opposite sides of the courtroom following a disagreement they had over language in a sub-trust to their mother’s Marcille Borcherding Revocable Living Trust.
Language in the trust documents at issue stated that in the event Rotert was unmarried at the time of Marcille’s death, he would receive his share of her estate outright and the provisions of the trust would have no effect. However, in the event Rotert was married at the time of Marcille’s death – which he was – his share of the rest and residue of her property would be given to Stiles, including insurance proceeds, as trustee of the sub-trust, known as the Roger D. Rotert Trust.
The Jackson Circuit Court ultimately denied Rotert’s motion for summary judgment contending certain language in the Rotert Trust was void under Indiana law as a restraint against marriage, and instead granted Stiles’ cross-motion. Rotert appealed, asserting that the requirement that he is unmarried at the time of Marcille’s death as a prerequisite to take his inheritance outright can only be interpreted as a restraint on marriage and therefore is void as against public policy.
A split Indiana Court of Appeals panel agreed with Rotert, ultimately reversing and remanding for the trial court to enter summary judgment in his favor and against Stiles.
“Here, in absence of any evidence establishing a support reason or economic basis, the marriage provision simply cannot be interpreted as anything other than an encouragement for Rotert to divorce his wife of almost twenty years upon the opening of the estate and the condition operates to divest Rotert of an outright ownership of his interest in the Trust estate upon Marcille’s death,” Judge Patricia Riley wrote, joined by Judge Robert Altice.
The majority rejected Stiles’ argument that Rotert waived his challenge to the Rotert Trust by agreeing to the accord and satisfaction to settle the Beneficiary’s Request for Distribution. Instead, it concluded that because the marriage provision never had any legal existence, the provision cannot be saved by an agreement or waiver of the parties.
“In a similar effort to protect the Rotert Trust, Stiles argues that even if the marriage provision is declared void, Rotert would still receive any distributions in trust pursuant to the language in the Borcherding Trust. However, this is an incorrect interpretation of the mechanism of the interlocking trusts,” the appellate majority wrote.
But Judge Melissa May, writing in dissent, said she would not find the trust language at issue to be void as a restraint on marriage or as an incentive to divorce in the case of Roger D. Rotert v. Connie S. Stiles, 20A-TR-773.
Noting that the form of Rotert’s inheritance was fixed at the moment of Marcille’s death, May wrote that, “By the very terms of that devise, any action Rotert might take with regard to his marriage after the opening of the estate would be inconsequential to the form of his inheritance.”
The dissenting judge further said she would hold instead that the devise is enforceable as written in accordance with Dickey v. Citizens’ State Bank of Fairmount, 180 N.E. 36, 98 Ind. App. 58 (1932).
“In accordance with the (Restatement (Second) of Property) and Dickey, I would uphold the Trust provision and, therefore, I dissent from the Majority’s reversal of the trial court’s judgment,” May concluded.