Stephanie A. Schrage v. In the Matter of the Seberger Living Trust u/t/d April 27, 2009 , 2016 Ind. App. LEXIS 62 ( 2016 )

Mar 10 2016, 9:25 am
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Greg A. Bouwer Benjamin T. Ballou
Koransky, Bouwer, and Poracky, P.C. Preston G. Sisler
Dyer, Indiana Hodges and Davis, P.C.
Merrillville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Stephanie A. Schrage, March 10, 2016
Appellant, Court of Appeals Case No.
45A03-1506-TR-685
v. Appeal from the Lake Circuit
Court
In the Matter of the Seberger The Honorable George C. Paras,
Living Trust u/t/d April 27, Judge
2009, The Honorable Jewell Harris, Jr.,
Appellee. Probate Commissioner
Trial Court Cause No.
45C01-1410-TR-11
Brown, Judge.
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[1] Stephanie A. Schrage (“Schrage”) appeals the trial court’s order denying her
petition to compel the delivery of a complete and unredacted copy of the
Audrey R. Seberger Living Trust u/t/d April 27, 2009 (the “Trust”). Schrage
raises one issue which we revise and restate as whether Schrage is entitled to a
complete copy of the Trust upon request to the trustee. We affirm.
Facts and Procedural History
[2] The relevant facts are not in dispute. On April 29, 1992, Audrey R. Seberger,
as Settlor and initial Trustee, executed the Trust, which she amended and/or
restated as follows: on October 14, 1996, by a Restatement of Trust; on January
27, 1999, by an Amendment to the Restatement of Trust; on August 9, 2000, by
a Second Amendment to the Restatement of Trust; on March 11, 2003, by a
Third Amendment to the Restatement of Trust; on January 25, 2006, by a
Second Restatement of the Trust; on April 27, 2009, by a Third Restatement of
the Trust; and on August 19, 2009, by an Amendment to the Third Restatement
of the Trust.1 The April 27, 2009 Third Restatement of the Trust “replace[d]
and supersede[d] [her] original trust, restated trusts and all prior amendments.”
Appellant’s Appendix at 21. The August 19, 2009 Amendment disinherited Jill
R. Schrage, the mother of Schrage, and directed that Schrage receive $25,000.
Seberger died on July 11, 2014, and Jack M. O’Drobinak accepted the position
of Successor Trustee (the “Trustee”).
1
For our purposes, the term “Trust” refers collectively to the 1992 initial trust document, as well as all
restatements and amendments listed above.
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[3] On August 26, 2014, Schrage by counsel sent a letter to the Trustee requesting a
copy of Seberger’s will and the Trust. The following day, the Trustee authored
a “Notice to Beneficiary” stating that “[a]s a Beneficiary of the Trust, you are
entitled to be advised as to the change of Trustees that has taken place in the
Trust, and your interest in the Trust, as shown in Exhibit A attached hereto.”
Id. at 192. Exhibit A consisted of one page containing one sentence which
stated: “My Trustee shall distribute the sum of $25,000 to each of the then
living children of JILL R. SCHRAGE, free of trust.” Id. at 193. The Notice to
Beneficiary advised that
[a] person must commence a judicial proceeding to contest the
validity of a Trust that was revocable at the Settlor’s death at the
earliest of the following:
(1) Ninety (90) days from the date you received a copy of
the Trust certification and the information contained in
this Notice; or
(2) Three (3) years after the Settlor’s death.
Id. at 192.
[4] The Trustee also completed a Trust Certification pursuant to Ind. Code § 30-4-
4-5 on that same date which referenced Exhibit A, noted that the Trust was still
in existence and had become irrevocable by Seberger’s death, and provided the
contact information for the Trustee. These documents were sent by the Trustee
to Schrage’s counsel in a letter dated August 28, 2014. The letter advised that
the Trustee was under no obligation to provide a copy of Seberger’s will, that as
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a matter of courtesy he provided a redacted copy of the Trust, and that “[a]
Notice to Beneficiary relating to . . . Schrage[] is also enclosed. I am serving
her by sending this document to you as I did not have an address for her to be
able to mail it to her directly.” Id. at 191.
[5] On October 22, 2014, the Trustee filed a Petition for Court Instruction stating in
part:
10. Article One of the August 19, 2009 Amendment revokes
Article Six and Eight of the Trust and, in pertinent part,
[Schrage] is a specific distributee of the Trust.
11. Upon request, [the Trustee] provided a redacted version of
the Trust to Schrage showing the specific distribution to Schrage
and her siblings.
12. Subsequently, Schrage requested a complete copy of the
Trust, along with all prior Amendments and Restatements.
13. Pursuant to I.C. § 30-4-3-6(b)(8), the Trustee has a duty,
upon the trust becoming irrevocable, by the death of the settlor,
and the written request of an income beneficiary or
remainderman, to “promptly provide a copy of the complete trust
instrument to the income beneficiary or remainderman.”
14. Pursuant to I.C. § 30-4-3-18(a), “[i]f there is reasonable doubt
with respect to any matter relating to the administration of the
trust, the trustee is entitled to be instructed by the court.”
15. There exists reasonable doubt under Indiana statutory and
case law as to whether Schrage, a specific distributee of the Trust,
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is entitled to a complete copy of the Trust, and all prior
Amendments and Restatements.
Id. at 103. That same day the Trustee filed a Petition to Docket Trust with
Court stating in part:
10. That [the Trustee] is requesting to docket the Trust with the
Court because he has contemporaneously herewith filed his
Successor Trustee’s Petition for Court Instruction.
*****
12. That the following individuals are beneficiaries of the Trust
and are entitled to notice of these proceedings:
*****
J. Stephanie Schrage, c/o Attorney . . . .
Id. at 19.
[6] On October 31, 2014, Schrage filed a Petition to Compel Trustee to Deliver the
Trust to Schrage (the “Petition to Compel”) stating that “the 90 day time period
within which to contest the validity of the Trust” had been triggered by the
Trustee’s Notice to Beneficiary sent on August 28, 2014, that the Trustee
continues to not provide a complete and unredacted copy of the Trust, that
under the Trust Code she is a remainder beneficiary, and that accordingly she is
entitled to, upon written request, a complete copy of the Trust. Id. at 187.
Schrage requested that the court compel the Trustee to provide her with a
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complete and unredacted copy of the Trust and to rule that the ninety-day time
period she has to contest the trust’s validity does not begin until she is served
with a copy of the complete Trust. On November 12, 2014, the Trustee filed a
response to Schrage’s Petition to Compel, and on April 14, 2015, the Trustee
filed a memorandum of law in support of his response. Also, on November 20,
2014, the court entered an order docketing the Trust.2
[7] On April 23, 2015, the court held a hearing on all pending petitions.3 On May
26, 2015, the court entered an order denying Schrage’s Petition to Compel and
instructed the Trustee “to not provide Schrage with a complete, unredacted
copy of the Trust.” Id. at 16. The court’s order reasoned as follows:
10. Article One of the August 19, 2009 Amendment revoked
Articles Six and Eight of the Trust and, in pertinent part, Schrage
is a specific distributee of the Trust.
*****
19. The language of I.C. §30.4-3-6(b)(8) is clear and
unambiguous and only refers to “income beneficiary” and
“remainderman”. Under the Indiana Trust Code, the term
2
We must assume that the copy of the Trust which was docketed with the court was a redacted version
which also appears in the appellant’s appendix. A complete copy of the Trust was not included in the record
on appeal.
3
We note that the April 23, 2015 hearing concerned matters not only under this cause number, but also
under cause number 45C01-1411-TR-13 (“Cause No. 13”). Schrage appealed the court’s orders issued in
Cause No. 13 under appellate cause number 45A04-1506-TR-686. By separate decision in that appeal, we
reverse in Schrage’s favor the trial court’s grant of a motion to dismiss filed under Ind. Trial Rule 12(B)(6)
and remand for further proceedings. Schrage v. The Audrey R. Seberger Living Trust u/t/d April 27, 2009 (filed
March 10, 2016), Ind. App. No. 45A04-1506-TR-686 (“Cause No. 686”).
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“beneficiary” includes an “income beneficiary” and a “remainder
beneficiary”. I.C. §30-2-14-2. “Income beneficiary” is defined as
a “person to whom net income of a trust is or may be payable.”
I.C. §30-2-14-5. “Remainder beneficiary” is defined as “a person
entitled to receive principal when an income interest ends.” I.C.
§30-2-14-11. “Remainderman” is defined as “a beneficiary
entitled to principal, including income which has been
accumulated and added to the principal.” I.C. §30.4-1.2(15).
Within the definition of “remainderman”, “principal” is defined
as “property that is held in trust for distribution to a remainder
beneficiary when the trust terminates or that will remain
perpetually vested in the trustee.” I.C. §30-2-14-10.
20. Schrage is not an “income beneficiary” as net income of the
Trust is not payable to her. Moreover, Schrage is not a
“remainderman” as she is not entitled to principal as that term is
defined in I.C. §30-2-14-10. Instead, Schrage is a specific
distributee of the Trust and entitled to a cash distribution prior to
any disbursements of income and principal and prior to
termination of the trust.
21. Like a “specific bequest” or “specific devise”, Black’s Law
Dictionary defines the same as “[a] testamentary gift of specific
personal property . . . or of a specific amount of cash.”
22. In addition, the Internal Revenue Code provides that, with
exceptions, amounts distributed to beneficiaries are includable in
said beneficiaries’ gross income. I.R.C. §§ 662(a), 663(a)(1).
Recipients of specific distributions, like Schrage, are excluded
from receiving distributable net income. I.R.C. §663(a)(1)
(excluding “[a]ny amount which, under the terms of the
governing instrument, is properly paid or credited as a gift or
bequest of a specific sum of money or of specific property and
which is paid or credited all at once or in not more than 3
installments”). Under the Internal Revenue Code, Schrage
would not be considered an “income beneficiary” or a
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“remainderman”/“remainder beneficiary” and would not receive
a Schedule K-l as a result of [the Trustee] filing the necessary
fiduciary income tax returns (Forms 1041 and IT-41) on behalf of
the Trust.
23. Ind. Code §30-4-3-6(b)(8) is silent with regard to the rights of
a specific distributee to obtain a complete copy of a trust. If the
legislature intended for a specific distributee to obtain a complete
copy of a trust, it could have included specific language in I.C.
§30-4-3-6(b) to indicate that intent. However, the legislature did
not do so, and the Court recognizes this omission in the statute.
See Ross v. Ind. State Bd. of Nursing, 790 N.E.2d 110, 119 (Ind. Ct.
App. 2003) (explaining that one rule of statutory construction is
that it is just as important to recognize what the statute does not
say as it is to recognize what it does say).
24. Schrage cites Marshall & Ilsley Trust Co., NA. v. Woodward, 848
N.E.2d 1175, 1180-81 (Ind. Ct. App. 2006) and argues that
because her payment will come from the principal of the Trust,
she is a “remainderman” as defined in I.C. §30-4-1-2(15).
Marshall is clearly distinguishable from this case as it involved the
right of a remote named contingent beneficiary to receive an
accounting, not the right of a specific distributee to receive a
complete and unredacted copy of a trust. . . .
25. Under the plain and ordinary meaning of “remainderman”
and “remainder beneficiary” set forth under Indiana law,
Schrage, a specific distributee, is not entitled to a complete copy
of the Trust, including all prior Amendments and Restatements.
Id. at 11, 13-16.
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Discussion
[8] The issue is whether Schrage is entitled to a complete copy of the Trust upon
request to the Trustee, which requires this Court to interpret certain statutes of
the Indiana Code. We review an issue of statutory interpretation de novo.
Chrysler Grp., LLC v. Review Bd. of Ind. Dep’t of Workforce Dev., 960 N.E.2d 118,
124 (Ind. 2012). “Clear and unambiguous statutes leave no room for judicial
construction.” Basileh v. Alghusain, 912 N.E.2d 814, 821 (Ind. 2009). But when
a statute is susceptible to more than one interpretation it is deemed ambiguous
and thus open to judicial construction. Id. If the statutory language is clear and
unambiguous, we require only that the words and phrases it contains are given
their plain, ordinary, and usual meanings to determine and implement the
legislature’s intent. State v. Am. Family Voices, Inc., 898 N.E.2d 293, 297 (Ind.
2008), reh’g denied. If a statute is susceptible to multiple interpretations, we
must try to ascertain the legislature’s intent and interpret the statute so as to
effectuate that intent. Bolin v. Wingert, 764 N.E.2d 201, 204 (Ind. 2002). We
presume the legislature intended logical application of the language used in the
statute, so as to avoid unjust or absurd results. Id. A statute should be
examined as a whole, avoiding excessive reliance upon a strict literal meaning
or the selective reading of individual words. Mayes v. Second Injury Fund, 888
N.E.2d 773, 776 (Ind. 2008).
[9] This Court has observed that “Title 30 of the Indiana Code deals with trusts
and fiduciaries,” in which “Article 4 is the Trust Code and Chapter 14 of
Article 2 is the Uniform Principal and Income Act (UPIA).” Marshall & Ilsley
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Trust Co., N.A. v. Woodward, 848 N.E.2d 1175, 1178 (Ind. Ct. App. 2006)
(footnotes omitted). “A trust is a fiduciary relationship between a person who,
as trustee, holds title to property and another person for whom, as beneficiary,
the title is held.” Ind. Code § 30-4-1-1(a). The Trust Code defines beneficiary
by reference to the UPIA. Ind. Code § 30-4-1-2. Under the UPIA definition, a
trust beneficiary includes “an income beneficiary, and a remainder beneficiary.”
Ind. Code § 30-2-14-2(2). An income beneficiary means “a person to whom net
income of a trust is or may be payable.” Ind. Code § 30-2-14-5. A remainder
beneficiary is defined as “a person entitled to receive principal when an income
interest ends.”4 Ind. Code § 30-2-14-11. Income interest means “the right of an
income beneficiary to receive all or part of net income,” whether the
distribution is mandatory or discretionary. Ind. Code § 30-2-14-6. “An income
interest ends on the day before an income beneficiary dies or another
terminating event occurs, or on the last day of a period during which there is no
beneficiary to whom a trustee may distribute income.” Ind. Code § 30-2-14-20.
Ind. Code § 30-2-14-10 defines the term “principal” as “property that is held in
4
As observed in Marshall & Ilsley Trust Co., the Indiana Trust Code also contains a definitional section for the
term remainderman,
which is not used elsewhere in the statutes, but often appears in case law. The Trust Code
Study Commission Comments to Ind. Code § 30-4-1-2 indicate the “definitions of income
beneficiary and remainderman continue those found in IC 1971, 30-2-3-1.” The Trust Code was
amended in 2002 to reflect, in part, the adoption of the UPIA and by reference includes the
definition of a remainder beneficiary. A remainderman is “a beneficiary entitled to principal,
including income which has been accumulated and added to the principal.” Ind. Code § 30-4-1-
2(15).
848 N.E.2d at 1178 n.8.
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trust for distribution to a remainder beneficiary when the trust terminates or
that will remain perpetually vested in the trustee.”5
[10] Also, Ind. Code § 30-4-3-6, which lists the duties of the trustee, states in
relevant part that:
(b) . . . the trustee also has a duty to do the following:
(8) Upon:
(A) the trust becoming irrevocable:
(i) by the terms of the trust instrument; or
(ii) by the death of the settlor; and
(B) the written request of an income beneficiary or
remainderman;
promptly provide a copy of the complete trust instrument
to the income beneficiary or remainderman.
[11] The Trust Code “shall be interpreted and applied to the terms of the trust so as
to implement the intent of the settlor and the purposes of the trust.” Ind. Code
§ 30-4-1-3. If there is a conflict, “the terms of the trust shall control unless the
5
The relevant section of the Trust Code, Ind. Code § 30-4-1-2(13), provides that “‘[p]rincipal’ has the
meaning set forth in IC 30-2-14-10.”
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rules of law clearly prohibit or restrict the article which the terms of the trust
purport to authorize.” Id.
[12] Schrage begins by noting that Ind. Code § 30-4-3-6 states the duties of the
trustee and that subsection (b)(8) specifically provides that, upon the trust
becoming irrevocable and written request by an income beneficiary or
remainderman, the trustee must promptly provide a complete copy of the trust
instrument. She argues that she is a remainderman and that accordingly she is
entitled to a complete copy of the Trust upon written request to the Trustee.
She asserts that “[a] trust consists of income or principal,” that principal “is any
property held in trust for distribution when the trust terminates” and may
generate income which becomes principal if not distributed, and that under the
terms of the Trust she is entitled to principal from the Trust. Appellant’s Brief
at 6. She refers to the Trustee’s position that “a specific distribution is not
income or principal” which she says “urges a third category of trust property
but does not define it or refer to the Indiana Trust Code, because a third
category does not exist.” Id. She states that the trustee’s assertion that a
remainderman is a person entitled to residue of what remains after all income
and specific distributions are made, does not comport with the language of Ind.
Code § 30-2-14-11. She notes that the Trust Code uses only two categories of
beneficiary, an income beneficiary and a remainderman, and to the extent the
Trustee and the court in its order suggest that her interest falls into a third
category of a “specific distributee,” a “specific distributee is a type of
remainderman.” Id. at 7.
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[13] The Trustee contends that Schrage is not a remainderman because she is not
entitled to principal, which “is held for distribution to remainder beneficiaries
when a trust terminates.” Appellee’s Brief at 3. The Trustee posits that Schrage is
a specific distributee who is “entitled to a cash distribution prior to any
disbursements of income and principal and prior to termination of the Trust,”
noting that the Trust Code is silent regarding the rights of specific distributees.
Id. at 3-4. He argues that Seberger’s death did not eliminate “all potential
income interests under the Trust” and that “Schrage is not a ‘remainder
beneficiary’ because her entitlement to the distribution is vested as a result of
Seberger’s death, not as a result of an income beneficiary’s entitlement ending.”
Id. at 5. The Trustee refers to certain provisions of the Internal Revenue Code
which, he says, demonstrate that Schrage’s argument should not be accepted.
The Trustee states that “[t]he interest of a specific distributee is completely
different from that of a ‘remainderman’/‘remainder beneficiary’ in that the
latter’s interest is in the administration of the trust for the preservation of assets”
while “[a] specific distributee receives a cash distribution prior to any
distribution of income or principal . . . .” Id. at 7.
[14] In Marshall & Ilsley Trust Co., N.A. v. Woodward, discussed by the parties in their
briefs and the court in its order, the trustee appealed from a grant of summary
judgment in favor of Robert G. Woodward, Sr., for an accounting of a trust
created by his son (the “Grantor”). 848 N.E.2d at 1176-1177. The terms of the
trust, funded by certain life insurance policies held by Grantor upon Grantor’s
death, provided that Grantor’s wife would receive distributions of income and
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principal at the trustee’s discretion, that if she remarried she would cease to be a
trust beneficiary, and that the trust would then be held for the benefit of
Grantor’s three sons. Id. at 1177. The trust also named contingent beneficiaries
in the event that all of Grantor’s sons died without leaving issue before the trust
was distributed: “Woodward if he survives, but if he does not, the St. Benedict
Catholic Church in Evansville.” Id. At one point, Woodward became the
successor trustee, and upon his resignation the Marshall and Ilsley Trust
Company was named trustee. Id. Woodward later sought an accounting due
to concern with the administration of the trust, but his request was denied. Id.
The trial court granted summary judgment in Woodward’s favor, finding that
he was a beneficiary as defined by Ind. Code § 30-2-14-11 and was entitled to an
accounting under Ind. Code § 30-4-3-6. Id.
[15] On appeal, the trustee first asserted that only the Grantor’s sons had the right to
an accounting under the terms of the trust, but we disagreed with its
interpretation of the document. Id. at 1179-1180. We next turned to the
parties’ arguments under the relevant statutes, in which the trustee argued that
Woodward was neither an income beneficiary, nor a remainder beneficiary,
and was therefore not entitled to an accounting under Ind. Code § 30-4-3-
6(b)(7).6 Id. at 1180. We observed that “[a]lthough his right to the trust
6
Ind. Code § 30-4-3-6(b)(7) provides that, unless the trust terms or Ind. Code § 30-4-3-1.3 provide otherwise,
the trustee also has the duty to:
Keep the following beneficiaries reasonably informed about the administration of the trust and
of the material facts necessary for the beneficiaries to protect their interests:
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principal is contingent on his childless grandchildren predeceasing him,
Woodward is within the definition of a remainder beneficiary under the
statute,” and proceeded to consider “whether ‘remainder beneficiary’ includes
both vested and contingent beneficiaries,” noting that the statute is not clear on
that issue. Id. at 1181. Relying on analysis of the Uniform Trust Code and the
UPIA, as well as other policy considerations, we found that the statute
contemplated contingent beneficiaries who are named in the trust document as
being entitled to an accounting and affirmed the trial court’s order. Id. at 1184.
[16] Turning to the Trust document, we note that the April 27, 2009 Third
Restatement of the Trust, which superseded previous versions of the Trust,
contains twelve articles detailing the specifics of the Trust. Article Five is titled
“Administration at Death of the Trustor” and discusses various payments the
Trust shall make related to expenses, debts, claims, and taxes associated with
the Trust Estate. Appellant’s Appendix at 33. Article Six is titled “Specific
Distributions of Trust Property,” and Section 5 of that Article details the
(A) A current income beneficiary.
(B) A beneficiary who will become an income beneficiary upon the expiration of the term
of the current income beneficiary, if the trust has become irrevocable by:
(i) the terms of the trust instrument; or
(ii) the death of the settlor.
A trustee satisfies the requirements of this subdivision by providing a beneficiary described in
clause (A) or (B), upon the beneficiary’s written request, access to the trust’s accounting and
financial records concerning the administration of trust property and the administration of the
trust.
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specific distributions designated by Seberger.7 Id. at 36. Article Eight of the
Trust is titled “Division and Distribution of Trust Property,” Section 1 of which
is titled “Division of Trust Property Into Shares.” Id. at 41. The preamble of
that section states:
My Trustee shall divide, into separate shares, all of my Trust
Estate not previously distributed under the preceding Articles of
my Trust Agreement (and for purposes of determining such
division and subsequent distributions shall take into account the
exclusion of any descendant as may be directed in Article One)
as follows: . . . .
Id. Below that preamble, the Trust contains headings titled “Beneficiary
Name” and “Share,” in which the specific beneficiaries and shares have been
redacted. Id. at 41-46.
[17] The August 19, 2009 Amendment to the Third Restatement of Trust made
changes to the language of both Articles Six and Eight. Under Article Six,
Section 5, which details specific distributions of Trust property, the Trust in the
Amendment instructs that “[m]y Trustee shall distribute the sum of $25,000 to
each of the then living children of JILL R. SCHRAGE, free of trust.” Id. at 90.
Also, in Article Eight, Section 7, which is titled “Unequal Distribution /
Disinheritance,” the Trust states specifically that “no provision” is made for
Schrage’s mother Jill “or any such other relative, friend, or heir at law of mine,
7
The details of the specific distributions listed in the Trust have been redacted. The appendix contains three
pages denoting redacted material.
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other than as specifically set forth under the terms of this my Trust” and that
this was “for reasons best known to” Seberger. Id. at 100. Thus, Schrage’s
distribution was set forth in Article Six, covering specific distributions, and she
was not listed as a beneficiary in Article Eight.8
[18] Regarding the relevant statutes, we note that a remainder beneficiary is “a
person entitled to receive principal when an income interest ends,” Ind. Code §
30-2-14-11, in which principal is “property that is held in trust for distribution to
a remainder beneficiary when the trust terminates or that will remain perpetually
vested in the trustee.” Ind. Code § 30-2-14-10 (emphasis added). Thus,
principal is not merely assets held in trust, but rather assets held for distribution
when the trust terminates.
[19] Further clarity is gained by examining Ind. Code § 30-4-4-5, which governs the
certification of trust such as was provided to Schrage by the Trustee. That
statute begins by providing that “[a] trustee may furnish to a person other than
a beneficiary a certification of trust instead of a copy of the trust instrument”
and notes the relevant information which must be contained therein. Ind. Code
§ 30-4-4-5(a). It further provides:
8
We observe that the Trustee sent Schrage a document titled “Notice to Beneficiary” which referred to
Schrage as “a Beneficiary of the Trust . . . .” Appellant’s Appendix at 192. We do not believe, however, that
this characterization by the Trustee has legal consequence where the Trust itself does not identify Schrage as
a remainder beneficiary.
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(e) A recipient of a certification of trust may require the trustee to
furnish copies of excerpts from the original trust instrument and
later amendments that:
(1) designate the trustee; and
(2) confer on the trustee the power to act in a pending
transaction in which the recipient has an interest.
Ind. Code § 30-4-4-5(e). Thus, Subsection 5(e) contemplates that simply
because a person has an interest in the trust does not necessarily make that
person a beneficiary of the trust and that such persons are entitled to excerpts of
the trust related to their interest.9
[20] In examining the policy considerations involved, we are persuaded by the
Trustee’s suggestion that the right of a remainder beneficiary to obtain a
complete copy of a trust is based upon such beneficiary’s interest in the
administration of the trust for the preservation of assets, in which the remainder
beneficiary is typically entitled to a share of the trust principal. Specific
distributees such as Schrage, by contrast, are entitled to a specific sum of money
or other unique property whereby the management of trust assets would not
affect the amount of the distribution. We also observe that Black’s Law
9
We note that Ind. Code § 30-4-4-5(i) provides that “[t]his section does not limit the right of a person to
obtain a copy of the trust instrument in a judicial proceeding concerning the trust.” As discussed in Cause
No. 686 referenced above, the trial court hearing Schrage’s complaint has the discretion to order that the
Trust be docketed pursuant to Ind. Code § 30-4-6-7(a) “[i]f it is necessary to the determination of any issue of
law or fact in a proceeding, the court may direct that a copy of the trust instrument, if any, be kept in its
records.” Schrage, Ind. App. No. 45A04-1506-TR-686, slip op. at 20 (March 10, 2016).
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Dictionary contains a definition concerning the law of wills and, in its entry for
“remainder bequest,” directs the reader to the definition of “residuary bequest,”
which it defines as “a bequest of the remainder of the testator’s estate after the
payment of the debts, legacies, and specific bequests.” BLACK’S LAW
DICTIONARY 189 (10th ed. 2014) (emphasis added). Thus, the law of wills
groups specific bequests with the payment of debts and other legacies rather
than with the concept of remainders.
[21] As noted above, the Trust Code “shall be interpreted and applied to the terms of
the trust so as to implement the intent of the settlor and the purposes of the
trust,” and, when conflicts arise, “the terms of the trust shall control unless the
rules of law clearly prohibit or restrict the article which the terms of the trust
purport to authorize.” Ind. Code § 30-4-1-3. Here, Schrage is not listed as a
remainder beneficiary in the Trust. She is not entitled to Trust principal, which
is to be disbursed when the trust terminates, because there is no indication that
the Trust would terminate based upon her specific distribution contained in
Article 6. There is no division of assets called to take place in Article 6; rather,
the distributions contemplated in that Article are a preamble for the subsequent
asset division and Trust termination. Schrage received a certification of trust
from the Trustee as a recipient of a specific distribution. Based on that interest
alone, she is entitled to nothing further from the Trustee. Accordingly, we
conclude that the court did not err in denying Schrage’s petition.
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Conclusion
[22] For the foregoing reasons, we affirm the trial court’s order denying Schrage’s
petition to compel.
[23] Affirmed.
Kirsch, J., and Mathias, J., concur.
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