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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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Repealed
(Repealed by P.L.84-2002, SEC.11.)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 unless
waived in writing by an adult, competent beneficiary, the trustee
shall deliver a written statement of accounts to each income
beneficiary or his personal representative annually. The statement
shall 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 of
the statement at their inventory value.
(b) This subsection applies to a charitable trust with assets of at
least five hundred thousand dollars ($500,000). The trustee of a
charitable trust shall annually file a verified written certification with
the attorney general stating that a written statement of accounts has
been prepared showing at least the items listed in section 13(a) of
this chapter. The certification must state that the statement of
accounts is available to the attorney general and any member of the
general public upon request. A charitable trust may not be exempted
from this requirement by a provision in a will, trust agreement,
indenture, or other governing instrument. This subsection does not
prevent a trustee from docketing a charitable trust to finalize a
written statement of account or any other lawful purpose in the
manner provided in this article. However, this subsection does not
apply to an organization that is not required to file a federal
information return under Section 6033(a)(2)(A)(i) or Section
6033(a)(2)(A)(ii) of the Internal Revenue Code.
(c) Upon petition by the settlor, a beneficiary or his personal
representative, a person designated by the settlor to have advisory or
supervisory powers over the trust, or any other person having an
interest in the administration or the benefits of the trust, including the
attorney general in the case of a trust for a benevolent public
purpose, the court may direct the trustee to file a verified written
statement of accounts showing the items listed in section 13(a) of
this 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 provided
in IC 30-4-6-2, the trustee shall file a verified written statement of
accounts containing the items shown in section 13(a) of this chapter
with the court biennially, and the court may, on its own motion,
require the trustee to file such a statement at any other time provided
there 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 the
Court)
(a) A verified written statement of accounts filed with the court
under 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 chargeable
according to the last preceding written statement of accounts or the
original inventory if there is no preceding statement;
(3) an itemized schedule of all principal cash and property
received and disbursed, distributed, or otherwise disposed of during
the 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 of
the period, how invested, and both the inventory and current market
values of all investments;
(6) a statement that the trust has been administered according to
its terms;
(7) the names and addresses of all living beneficiaries and a
statement identifying any beneficiary known to be under a legal
disability;
(8) a description of any possible unborn or unascertained
beneficiary and his interest in the trust estate; and
(9) the business addresses, if any, or the residence addresses of all
the trustees.
(b) The court may, either on petition or on its own motion, require
the trustee to submit such proof as it deems necessary to support his
verified written statement of accounts. The court may accept the
unqualified certificate of a certified public accountant in lieu of other
proof. (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 by
30-4-5-12(a), a beneficiary or his personal representative will be
deemed to have discharged the trustee from liability as to that
beneficiary for all matters disclosed in the statement if he approves
in writing the trustee's statement.
(b) In a proceeding in which the court has been requested by
petition to approve a verified written statement of accounts, any
person authorized by 30-4-5-12(c) to petition for an accounting may
file an appropriate responsive pleading, and if he does so, he must
file it within the period of time after notice that a responsive pleading
is required to be filed after service of a prior pleading under the
Indiana Rules of Procedure.
(c) When a responsive pleading filed under subsection (b) of this
section includes objections to any matter contained in the trustee's
statement, those objections must be specific unless the court orders
otherwise.
(d) Upon request for approval of a verified written statement of
accounts and the filing of objections, if any, the court shall determine
the correctness of the statement and the validity and propriety of all
actions of the trustee described in the statement and may take any
additional 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 the
court under 30-4-5-14, either approving the statement or
disapproving it and surcharging the trustee, is final, conclusive and
binding upon all the parties to the action who are subject to the
jurisdiction of the court.
(b) Entry of the judgment by the court finally disposes of the
matter and the clerk may not tax or charge a service fee for any year
beyond 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, and
except as provided in section 17 of this chapter, the trustee is entitled
to reasonable compensation from the trust estate for acting as trustee.
(b) If the terms of the trust specify the trustee's compensation, the
trustee is entitled to be compensated as specified, but the court may
allow more or less compensation if:
(1) the duties of the trustee are substantially different from
those contemplated when the trust was created; or
(2) the compensation specified in the terms of the trust would
be 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 administration
of the trust; and
(2) expenses that were not properly incurred in the
administration of the trust, to the extent necessary to prevent
unjust enrichment of the trust.
An advance by the trustee of money for the protection of the trust
gives rise to a lien against trust property to secure reimbursement
with reasonable interest. (Formerly: Acts 1971, P.L.416, SEC.6.) As amended by
P.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 of
trust, the court may in its discretion either deny him all
compensation, allow him a reduced compensation, or allow him full
compensation.
(b) In the exercise of its discretion under subsection (a) of this
section, the court may consider, among others, the following facts:
(1) whether the breach of trust was intentional, negligent, or
without 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 trust
estate;
(4) if a loss results, whether the trustee has indemnified the trust
estate; 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 corporation
which is organized under the laws of this state and which is a private
foundation as defined in Section 509(a) of the Internal Revenue Code
shall, unless otherwise provided in the articles of incorporation of
such corporation:
(a) distribute each taxable year amounts sufficient for such
corporation to avoid liability for the tax imposed by Section
4942 of the Internal Revenue Code;
(b) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4941 of the Internal Revenue Code;
(c) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4943 of the Internal Revenue Code;
(d) not make any investment which would jeopardize the
carrying out of any of such corporation's exempt purposes
(within the meaning of Section 4944 of the Internal Revenue
Code) and which would subject such corporation to liability for
the taxes imposed by Section 4944 of the Internal Revenue
Code; and
(e) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4945 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 such
corporation organized before January 1, 1970, to the extent that a
court of competent jurisdiction shall determine that application of
such section to such corporation would be contrary to the terms of
any instrument which may not be changed to conform to such section
and 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 to
corporations to which such section applies in accordance with the
following subsections (a) and (b):
(a) With respect to each such corporation organized on or after
January 1, 1970, the provisions of 30-4-5-18 shall be effective from
and after the date of such corporation's organization.
(b) With respect to each such corporation organized before
January 1, 1970, the provisions of 30-4-5-18 shall be effective during
taxable 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 23
of this chapter, every trust for a benevolent public purpose that is
subject to the provisions of Subchapter A of Chapter 42 of Subtitle
D of the Internal Revenue Code shall:
(1) distribute each taxable year amounts sufficient for such trust
to avoid liability for the tax imposed by Section 4942 of the
Internal Revenue Code, except that this subdivision shall not
apply to split-interest trusts;
(2) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4941 of
the Internal Revenue Code;
(3) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4943 of
the Internal Revenue Code;
(4) not make any investment which would jeopardize the
carrying out of any of such trust's exempt purposes (within the
meaning of Section 4944 of the Internal Revenue Code) and
which would subject such trust to liability for the taxes imposed
by Section 4944 of the Internal Revenue Code; and
(5) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4945 of
the 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 and
amounts 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 such
trust created before January 1, 1970, to the extent that a court of
competent jurisdiction shall determine that application of such
section to such trust would be contrary to the terms of any instrument
which may not be changed to conform to such section and by which
such 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 trusts
to which such section applies in accordance with the following
subsections (a) and (b):
(a) With respect to each such trust first existing on or after
January 1, 1970, the provisions of 30-4-5-21 shall be effective from
and 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 taxable
years 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.)
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 unless
waived in writing by an adult, competent beneficiary, the trustee
shall deliver a written statement of accounts to each income
beneficiary or his personal representative annually. The statement
shall 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 of
the statement at their inventory value.
(b) This subsection applies to a charitable trust with assets of at
least five hundred thousand dollars ($500,000). The trustee of a
charitable trust shall annually file a verified written certification with
the attorney general stating that a written statement of accounts has
been prepared showing at least the items listed in section 13(a) of
this chapter. The certification must state that the statement of
accounts is available to the attorney general and any member of the
general public upon request. A charitable trust may not be exempted
from this requirement by a provision in a will, trust agreement,
indenture, or other governing instrument. This subsection does not
prevent a trustee from docketing a charitable trust to finalize a
written statement of account or any other lawful purpose in the
manner provided in this article. However, this subsection does not
apply to an organization that is not required to file a federal
information return under Section 6033(a)(2)(A)(i) or Section
6033(a)(2)(A)(ii) of the Internal Revenue Code.
(c) Upon petition by the settlor, a beneficiary or his personal
representative, a person designated by the settlor to have advisory or
supervisory powers over the trust, or any other person having an
interest in the administration or the benefits of the trust, including the
attorney general in the case of a trust for a benevolent public
purpose, the court may direct the trustee to file a verified written
statement of accounts showing the items listed in section 13(a) of
this 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 provided
in IC 30-4-6-2, the trustee shall file a verified written statement of
accounts containing the items shown in section 13(a) of this chapter
with the court biennially, and the court may, on its own motion,
require the trustee to file such a statement at any other time provided
there 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 the
Court)
(a) A verified written statement of accounts filed with the court
under 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 chargeable
according to the last preceding written statement of accounts or the
original inventory if there is no preceding statement;
(3) an itemized schedule of all principal cash and property
received and disbursed, distributed, or otherwise disposed of during
the 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 of
the period, how invested, and both the inventory and current market
values of all investments;
(6) a statement that the trust has been administered according to
its terms;
(7) the names and addresses of all living beneficiaries and a
statement identifying any beneficiary known to be under a legal
disability;
(8) a description of any possible unborn or unascertained
beneficiary and his interest in the trust estate; and
(9) the business addresses, if any, or the residence addresses of all
the trustees.
(b) The court may, either on petition or on its own motion, require
the trustee to submit such proof as it deems necessary to support his
verified written statement of accounts. The court may accept the
unqualified certificate of a certified public accountant in lieu of other
proof. (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 by
30-4-5-12(a), a beneficiary or his personal representative will be
deemed to have discharged the trustee from liability as to that
beneficiary for all matters disclosed in the statement if he approves
in writing the trustee's statement.
(b) In a proceeding in which the court has been requested by
petition to approve a verified written statement of accounts, any
person authorized by 30-4-5-12(c) to petition for an accounting may
file an appropriate responsive pleading, and if he does so, he must
file it within the period of time after notice that a responsive pleading
is required to be filed after service of a prior pleading under the
Indiana Rules of Procedure.
(c) When a responsive pleading filed under subsection (b) of this
section includes objections to any matter contained in the trustee's
statement, those objections must be specific unless the court orders
otherwise.
(d) Upon request for approval of a verified written statement of
accounts and the filing of objections, if any, the court shall determine
the correctness of the statement and the validity and propriety of all
actions of the trustee described in the statement and may take any
additional 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 the
court under 30-4-5-14, either approving the statement or
disapproving it and surcharging the trustee, is final, conclusive and
binding upon all the parties to the action who are subject to the
jurisdiction of the court.
(b) Entry of the judgment by the court finally disposes of the
matter and the clerk may not tax or charge a service fee for any year
beyond 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, and
except as provided in section 17 of this chapter, the trustee is entitled
to reasonable compensation from the trust estate for acting as trustee.
(b) If the terms of the trust specify the trustee's compensation, the
trustee is entitled to be compensated as specified, but the court may
allow more or less compensation if:
(1) the duties of the trustee are substantially different from
those contemplated when the trust was created; or
(2) the compensation specified in the terms of the trust would
be 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 administration
of the trust; and
(2) expenses that were not properly incurred in the
administration of the trust, to the extent necessary to prevent
unjust enrichment of the trust.
An advance by the trustee of money for the protection of the trust
gives rise to a lien against trust property to secure reimbursement
with reasonable interest. (Formerly: Acts 1971, P.L.416, SEC.6.) As amended by
P.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 of
trust, the court may in its discretion either deny him all
compensation, allow him a reduced compensation, or allow him full
compensation.
(b) In the exercise of its discretion under subsection (a) of this
section, the court may consider, among others, the following facts:
(1) whether the breach of trust was intentional, negligent, or
without 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 trust
estate;
(4) if a loss results, whether the trustee has indemnified the trust
estate; 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 corporation
which is organized under the laws of this state and which is a private
foundation as defined in Section 509(a) of the Internal Revenue Code
shall, unless otherwise provided in the articles of incorporation of
such corporation:
(a) distribute each taxable year amounts sufficient for such
corporation to avoid liability for the tax imposed by Section
4942 of the Internal Revenue Code;
(b) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4941 of the Internal Revenue Code;
(c) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4943 of the Internal Revenue Code;
(d) not make any investment which would jeopardize the
carrying out of any of such corporation's exempt purposes
(within the meaning of Section 4944 of the Internal Revenue
Code) and which would subject such corporation to liability for
the taxes imposed by Section 4944 of the Internal Revenue
Code; and
(e) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4945 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 such
corporation organized before January 1, 1970, to the extent that a
court of competent jurisdiction shall determine that application of
such section to such corporation would be contrary to the terms of
any instrument which may not be changed to conform to such section
and 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 to
corporations to which such section applies in accordance with the
following subsections (a) and (b):
(a) With respect to each such corporation organized on or after
January 1, 1970, the provisions of 30-4-5-18 shall be effective from
and after the date of such corporation's organization.
(b) With respect to each such corporation organized before
January 1, 1970, the provisions of 30-4-5-18 shall be effective during
taxable 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 23
of this chapter, every trust for a benevolent public purpose that is
subject to the provisions of Subchapter A of Chapter 42 of Subtitle
D of the Internal Revenue Code shall:
(1) distribute each taxable year amounts sufficient for such trust
to avoid liability for the tax imposed by Section 4942 of the
Internal Revenue Code, except that this subdivision shall not
apply to split-interest trusts;
(2) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4941 of
the Internal Revenue Code;
(3) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4943 of
the Internal Revenue Code;
(4) not make any investment which would jeopardize the
carrying out of any of such trust's exempt purposes (within the
meaning of Section 4944 of the Internal Revenue Code) and
which would subject such trust to liability for the taxes imposed
by Section 4944 of the Internal Revenue Code; and
(5) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4945 of
the 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 and
amounts 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 such
trust created before January 1, 1970, to the extent that a court of
competent jurisdiction shall determine that application of such
section to such trust would be contrary to the terms of any instrument
which may not be changed to conform to such section and by which
such 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 trusts
to which such section applies in accordance with the following
subsections (a) and (b):
(a) With respect to each such trust first existing on or after
January 1, 1970, the provisions of 30-4-5-21 shall be effective from
and 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 taxable
years 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.)
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 unless
waived in writing by an adult, competent beneficiary, the trustee
shall deliver a written statement of accounts to each income
beneficiary or his personal representative annually. The statement
shall 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 of
the statement at their inventory value.
(b) This subsection applies to a charitable trust with assets of at
least five hundred thousand dollars ($500,000). The trustee of a
charitable trust shall annually file a verified written certification with
the attorney general stating that a written statement of accounts has
been prepared showing at least the items listed in section 13(a) of
this chapter. The certification must state that the statement of
accounts is available to the attorney general and any member of the
general public upon request. A charitable trust may not be exempted
from this requirement by a provision in a will, trust agreement,
indenture, or other governing instrument. This subsection does not
prevent a trustee from docketing a charitable trust to finalize a
written statement of account or any other lawful purpose in the
manner provided in this article. However, this subsection does not
apply to an organization that is not required to file a federal
information return under Section 6033(a)(2)(A)(i) or Section
6033(a)(2)(A)(ii) of the Internal Revenue Code.
(c) Upon petition by the settlor, a beneficiary or his personal
representative, a person designated by the settlor to have advisory or
supervisory powers over the trust, or any other person having an
interest in the administration or the benefits of the trust, including the
attorney general in the case of a trust for a benevolent public
purpose, the court may direct the trustee to file a verified written
statement of accounts showing the items listed in section 13(a) of
this 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 provided
in IC 30-4-6-2, the trustee shall file a verified written statement of
accounts containing the items shown in section 13(a) of this chapter
with the court biennially, and the court may, on its own motion,
require the trustee to file such a statement at any other time provided
there 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 the
Court)
(a) A verified written statement of accounts filed with the court
under 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 chargeable
according to the last preceding written statement of accounts or the
original inventory if there is no preceding statement;
(3) an itemized schedule of all principal cash and property
received and disbursed, distributed, or otherwise disposed of during
the 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 of
the period, how invested, and both the inventory and current market
values of all investments;
(6) a statement that the trust has been administered according to
its terms;
(7) the names and addresses of all living beneficiaries and a
statement identifying any beneficiary known to be under a legal
disability;
(8) a description of any possible unborn or unascertained
beneficiary and his interest in the trust estate; and
(9) the business addresses, if any, or the residence addresses of all
the trustees.
(b) The court may, either on petition or on its own motion, require
the trustee to submit such proof as it deems necessary to support his
verified written statement of accounts. The court may accept the
unqualified certificate of a certified public accountant in lieu of other
proof. (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 by
30-4-5-12(a), a beneficiary or his personal representative will be
deemed to have discharged the trustee from liability as to that
beneficiary for all matters disclosed in the statement if he approves
in writing the trustee's statement.
(b) In a proceeding in which the court has been requested by
petition to approve a verified written statement of accounts, any
person authorized by 30-4-5-12(c) to petition for an accounting may
file an appropriate responsive pleading, and if he does so, he must
file it within the period of time after notice that a responsive pleading
is required to be filed after service of a prior pleading under the
Indiana Rules of Procedure.
(c) When a responsive pleading filed under subsection (b) of this
section includes objections to any matter contained in the trustee's
statement, those objections must be specific unless the court orders
otherwise.
(d) Upon request for approval of a verified written statement of
accounts and the filing of objections, if any, the court shall determine
the correctness of the statement and the validity and propriety of all
actions of the trustee described in the statement and may take any
additional 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 the
court under 30-4-5-14, either approving the statement or
disapproving it and surcharging the trustee, is final, conclusive and
binding upon all the parties to the action who are subject to the
jurisdiction of the court.
(b) Entry of the judgment by the court finally disposes of the
matter and the clerk may not tax or charge a service fee for any year
beyond 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, and
except as provided in section 17 of this chapter, the trustee is entitled
to reasonable compensation from the trust estate for acting as trustee.
(b) If the terms of the trust specify the trustee's compensation, the
trustee is entitled to be compensated as specified, but the court may
allow more or less compensation if:
(1) the duties of the trustee are substantially different from
those contemplated when the trust was created; or
(2) the compensation specified in the terms of the trust would
be 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 administration
of the trust; and
(2) expenses that were not properly incurred in the
administration of the trust, to the extent necessary to prevent
unjust enrichment of the trust.
An advance by the trustee of money for the protection of the trust
gives rise to a lien against trust property to secure reimbursement
with reasonable interest. (Formerly: Acts 1971, P.L.416, SEC.6.) As amended by
P.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 of
trust, the court may in its discretion either deny him all
compensation, allow him a reduced compensation, or allow him full
compensation.
(b) In the exercise of its discretion under subsection (a) of this
section, the court may consider, among others, the following facts:
(1) whether the breach of trust was intentional, negligent, or
without 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 trust
estate;
(4) if a loss results, whether the trustee has indemnified the trust
estate; 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 corporation
which is organized under the laws of this state and which is a private
foundation as defined in Section 509(a) of the Internal Revenue Code
shall, unless otherwise provided in the articles of incorporation of
such corporation:
(a) distribute each taxable year amounts sufficient for such
corporation to avoid liability for the tax imposed by Section
4942 of the Internal Revenue Code;
(b) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4941 of the Internal Revenue Code;
(c) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4943 of the Internal Revenue Code;
(d) not make any investment which would jeopardize the
carrying out of any of such corporation's exempt purposes
(within the meaning of Section 4944 of the Internal Revenue
Code) and which would subject such corporation to liability for
the taxes imposed by Section 4944 of the Internal Revenue
Code; and
(e) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such corporation to liability for the taxes imposed by Section
4945 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 such
corporation organized before January 1, 1970, to the extent that a
court of competent jurisdiction shall determine that application of
such section to such corporation would be contrary to the terms of
any instrument which may not be changed to conform to such section
and 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 to
corporations to which such section applies in accordance with the
following subsections (a) and (b):
(a) With respect to each such corporation organized on or after
January 1, 1970, the provisions of 30-4-5-18 shall be effective from
and after the date of such corporation's organization.
(b) With respect to each such corporation organized before
January 1, 1970, the provisions of 30-4-5-18 shall be effective during
taxable 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 23
of this chapter, every trust for a benevolent public purpose that is
subject to the provisions of Subchapter A of Chapter 42 of Subtitle
D of the Internal Revenue Code shall:
(1) distribute each taxable year amounts sufficient for such trust
to avoid liability for the tax imposed by Section 4942 of the
Internal Revenue Code, except that this subdivision shall not
apply to split-interest trusts;
(2) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4941 of
the Internal Revenue Code;
(3) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4943 of
the Internal Revenue Code;
(4) not make any investment which would jeopardize the
carrying out of any of such trust's exempt purposes (within the
meaning of Section 4944 of the Internal Revenue Code) and
which would subject such trust to liability for the taxes imposed
by Section 4944 of the Internal Revenue Code; and
(5) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4945 of
the 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 and
amounts 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 such
trust created before January 1, 1970, to the extent that a court of
competent jurisdiction shall determine that application of such
section to such trust would be contrary to the terms of any instrument
which may not be changed to conform to such section and by which
such 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 trusts
to which such section applies in accordance with the following
subsections (a) and (b):
(a) With respect to each such trust first existing on or after
January 1, 1970, the provisions of 30-4-5-21 shall be effective from
and 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 taxable
years 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.)
