CHAPTER 5. RULES GOVERNING THE ADMINISTRATION OF A TRUST
IC 30-4-5
Chapter 5. Rules Governing the Administration of a Trust
IC 30-4-5-0.5
Application of Uniform Principal and Income Act
Sec. 0.5. The Uniform Principal and Income Act (IC 30-2-14)applies to the administration of a trust under this article.
As added by P.L.84-2002, SEC.4.
IC 30-4-5-1
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-2
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-3
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-4
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-5
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-6
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-7
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-8
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-9
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-10
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-11
Repealed
(Repealed by P.L.84-2002, SEC.11.)
IC 30-4-5-12
Accounting by trustees
Sec. 12. (Accounting by Trustees)
(a) Unless the terms of the trust provide otherwise or unlesswaived in writing by an adult, competent beneficiary, the trusteeshall deliver a written statement of accounts to each incomebeneficiary or his personal representative annually. The statementshall contain at least:
(1) all receipts and disbursements since the last statement; and
(2) all items of trust property held by the trustee on the date ofthe statement at their inventory value.
(b) This subsection applies to a charitable trust with assets of atleast five hundred thousand dollars ($500,000). The trustee of acharitable trust shall annually file a verified written certification withthe attorney general stating that a written statement of accounts hasbeen prepared showing at least the items listed in section 13(a) ofthis chapter. The certification must state that the statement ofaccounts is available to the attorney general and any member of thegeneral public upon request. A charitable trust may not be exemptedfrom this requirement by a provision in a will, trust agreement,indenture, or other governing instrument. This subsection does notprevent a trustee from docketing a charitable trust to finalize awritten statement of account or any other lawful purpose in themanner provided in this article. However, this subsection does notapply to an organization that is not required to file a federalinformation return under Section 6033(a)(2)(A)(i) or Section6033(a)(2)(A)(ii) of the Internal Revenue Code.
(c) Upon petition by the settlor, a beneficiary or his personalrepresentative, a person designated by the settlor to have advisory orsupervisory powers over the trust, or any other person having aninterest in the administration or the benefits of the trust, including theattorney general in the case of a trust for a benevolent publicpurpose, the court may direct the trustee to file a verified writtenstatement of accounts showing the items listed in section 13(a) ofthis chapter. The petition may be filed at any time, provided,however, that the court will not, in the absence of good cause shown,require the trustee to file a statement more than once a year.
(d) If the court's jurisdiction is of a continuing nature as providedin IC 30-4-6-2, the trustee shall file a verified written statement ofaccounts containing the items shown in section 13(a) of this chapterwith the court biennially, and the court may, on its own motion,require the trustee to file such a statement at any other time providedthere is good cause for requiring a statement to be filed.
(Formerly: Acts 1971, P.L.416, SEC.6.) As amended by P.L.41-2000,SEC.5.
IC 30-4-5-13
Content of written statements of account filed with the court
Sec. 13. (Content of Written Statements of Account Filed with theCourt)
(a) A verified written statement of accounts filed with the courtunder 30-4-5-12 or by the trustee under 30-4-3-18(b) shall show:
(1) the period covered by the account;
(2) the total principal with which the trustee is chargeableaccording to the last preceding written statement of accounts or theoriginal inventory if there is no preceding statement;
(3) an itemized schedule of all principal cash and propertyreceived and disbursed, distributed, or otherwise disposed of duringthe period;
(4) an itemized schedule of income received and disbursed,distributed, or otherwise disposed of during the period;
(5) the balance of principal and income remaining at the close ofthe period, how invested, and both the inventory and current marketvalues of all investments;
(6) a statement that the trust has been administered according toits terms;
(7) the names and addresses of all living beneficiaries and astatement identifying any beneficiary known to be under a legaldisability;
(8) a description of any possible unborn or unascertainedbeneficiary and his interest in the trust estate; and
(9) the business addresses, if any, or the residence addresses of allthe trustees.
(b) The court may, either on petition or on its own motion, requirethe trustee to submit such proof as it deems necessary to support hisverified written statement of accounts. The court may accept theunqualified certificate of a certified public accountant in lieu of otherproof.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-14
Settlements; objections; hearing; surcharge
Sec. 14. (Settlements; Objections; Hearing; Surcharge)
(a) With respect to the annual written statement required by30-4-5-12(a), a beneficiary or his personal representative will bedeemed to have discharged the trustee from liability as to thatbeneficiary for all matters disclosed in the statement if he approvesin writing the trustee's statement.
(b) In a proceeding in which the court has been requested bypetition to approve a verified written statement of accounts, anyperson authorized by 30-4-5-12(c) to petition for an accounting mayfile an appropriate responsive pleading, and if he does so, he mustfile it within the period of time after notice that a responsive pleadingis required to be filed after service of a prior pleading under theIndiana Rules of Procedure.
(c) When a responsive pleading filed under subsection (b) of this
section includes objections to any matter contained in the trustee'sstatement, those objections must be specific unless the court ordersotherwise.
(d) Upon request for approval of a verified written statement ofaccounts and the filing of objections, if any, the court shall determinethe correctness of the statement and the validity and propriety of allactions of the trustee described in the statement and may take anyadditional action that it deems necessary.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-15
Judgment; fees
Sec. 15. (Judgment; Fees)
(a) Subject to the right of appeal, a judgment rendered by thecourt under 30-4-5-14, either approving the statement ordisapproving it and surcharging the trustee, is final, conclusive andbinding upon all the parties to the action who are subject to thejurisdiction of the court.
(b) Entry of the judgment by the court finally disposes of thematter and the clerk may not tax or charge a service fee for any yearbeyond that in which the judgment is rendered.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-16
Right to compensation
Sec. 16. (a) Unless the terms of the trust provide otherwise, andexcept as provided in section 17 of this chapter, the trustee is entitledto reasonable compensation from the trust estate for acting as trustee.
(b) If the terms of the trust specify the trustee's compensation, thetrustee is entitled to be compensated as specified, but the court mayallow more or less compensation if:
(1) the duties of the trustee are substantially different fromthose contemplated when the trust was created; or
(2) the compensation specified in the terms of the trust wouldbe unreasonably low or high.
(c) A trustee is entitled to be reimbursed out of the trust property,with interest as appropriate, for:
(1) expenses that were properly incurred in the administrationof the trust; and
(2) expenses that were not properly incurred in theadministration of the trust, to the extent necessary to preventunjust enrichment of the trust.
An advance by the trustee of money for the protection of the trustgives rise to a lien against trust property to secure reimbursementwith reasonable interest.
(Formerly: Acts 1971, P.L.416, SEC.6.) As amended byP.L.238-2005, SEC.42.
IC 30-4-5-17
Compensation if trustee breaches trust Sec. 17. (Compensation if Trustee Breaches Trust)
(a) In a proceeding in which the trustee is found to be in breach oftrust, the court may in its discretion either deny him allcompensation, allow him a reduced compensation, or allow him fullcompensation.
(b) In the exercise of its discretion under subsection (a) of thissection, the court may consider, among others, the following facts:
(1) whether the breach of trust was intentional, negligent, orwithout fault;
(2) whether or not the trustee acted in good faith;
(3) whether or not the breach of trust resulted in a loss to the trustestate;
(4) if a loss results, whether the trustee has indemnified the trustestate; and
(5) whether the trustee's services were of value to the trust estate.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-18
Private foundations
Sec. 18. Subject to section 20 of this chapter, every corporationwhich is organized under the laws of this state and which is a privatefoundation as defined in Section 509(a) of the Internal Revenue Codeshall, unless otherwise provided in the articles of incorporation ofsuch corporation:
(a) distribute each taxable year amounts sufficient for suchcorporation to avoid liability for the tax imposed by Section4942 of the Internal Revenue Code;
(b) not engage in any act of self-dealing (as defined in Section4941(d) of the Internal Revenue Code) which would subjectsuch corporation to liability for the taxes imposed by Section4941 of the Internal Revenue Code;
(c) not retain any excess business holding (as defined in Section4943(c) of the Internal Revenue Code) which would subjectsuch corporation to liability for the taxes imposed by Section4943 of the Internal Revenue Code;
(d) not make any investment which would jeopardize thecarrying out of any of such corporation's exempt purposes(within the meaning of Section 4944 of the Internal RevenueCode) and which would subject such corporation to liability forthe taxes imposed by Section 4944 of the Internal RevenueCode; and
(e) not make any taxable expenditure (as defined in Section4945(d) of the Internal Revenue Code) which would subjectsuch corporation to liability for the taxes imposed by Section4945 of the Internal Revenue Code.
(Formerly: Acts 1971, P.L.416, SEC.6.) As amended by P.L.2-1987,SEC.47.
IC 30-4-5-19
Private corporate foundations organized before January 1, 1970;
application of IC 30-4-5-18
Sec. 19. The provisions of 30-4-5-18 shall not apply to any suchcorporation organized before January 1, 1970, to the extent that acourt of competent jurisdiction shall determine that application ofsuch section to such corporation would be contrary to the terms ofany instrument which may not be changed to conform to such sectionand by which such corporation is bound.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-20
Private corporate foundations; effective dates of IC 30-4-5-18
Sec. 20. The provisions of 30-4-5-18 shall be effective as tocorporations to which such section applies in accordance with thefollowing subsections (a) and (b):
(a) With respect to each such corporation organized on or afterJanuary 1, 1970, the provisions of 30-4-5-18 shall be effective fromand after the date of such corporation's organization.
(b) With respect to each such corporation organized beforeJanuary 1, 1970, the provisions of 30-4-5-18 shall be effective duringtaxable years commencing after December 31, 1971.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-21
Trusts for benevolent public purpose; general rules
Sec. 21. Subject to the provisions of this section and of section 23of this chapter, every trust for a benevolent public purpose that issubject to the provisions of Subchapter A of Chapter 42 of SubtitleD of the Internal Revenue Code shall:
(1) distribute each taxable year amounts sufficient for such trustto avoid liability for the tax imposed by Section 4942 of theInternal Revenue Code, except that this subdivision shall notapply to split-interest trusts;
(2) not engage in any act of self-dealing (as defined in Section4941(d) of the Internal Revenue Code) which would subjectsuch trust to liability for the taxes imposed by Section 4941 ofthe Internal Revenue Code;
(3) not retain any excess business holding (as defined in Section4943(c) of the Internal Revenue Code) which would subjectsuch trust to liability for the taxes imposed by Section 4943 ofthe Internal Revenue Code;
(4) not make any investment which would jeopardize thecarrying out of any of such trust's exempt purposes (within themeaning of Section 4944 of the Internal Revenue Code) andwhich would subject such trust to liability for the taxes imposedby Section 4944 of the Internal Revenue Code; and
(5) not make any taxable expenditure (as defined in Section4945(d) of the Internal Revenue Code) which would subjectsuch trust to liability for the taxes imposed by Section 4945 ofthe Internal Revenue Code.
The provisions of this section shall not apply to split-interest trusts
or amounts thereof to the extent that such split-interest trusts andamounts are not, under Section 4947 of the Internal Revenue Code,subject to the prohibitions applicable to private foundations.
(Formerly: Acts 1971, P.L.416, SEC.6.) As amended by P.L.2-1987,SEC.48; P.L.41-2000, SEC.6.
IC 30-4-5-22
Private and charitable trust foundations; split-interest trusts;creation before January 1, 1970; application of IC 30-4-5-21
Sec. 22. The provisions of 30-4-5-21 shall not apply to any suchtrust created before January 1, 1970, to the extent that a court ofcompetent jurisdiction shall determine that application of suchsection to such trust would be contrary to the terms of any instrumentwhich may not be changed to conform to such section and by whichsuch trust is bound.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-23
Private and charitable trust foundations; split-interest trusts;effective date of IC 30-4-5-21
Sec. 23. The provisions of 30-4-5-21 shall be effective as to truststo which such section applies in accordance with the followingsubsections (a) and (b):
(a) With respect to each such trust first existing on or afterJanuary 1, 1970, the provisions of 30-4-5-21 shall be effective fromand after the date such trust comes into existence.
(b) With respect to each such trust existing before January 1,1970, the provisions of 30-4-5-21 shall be effective during taxableyears commencing after December 31, 1971.
(Formerly: Acts 1971, P.L.416, SEC.6.)
IC 30-4-5-24
Repealed
(Repealed by P.L.2-1987, SEC.53.)