COA: Invalid trust due to unclear beneficiaries
A man acting as the personal representative of his brother’s estate failed to convince the Indiana Court of Appeals that the language of a will left by his late brother created a valid trust in his name.
Terrel Wilson Sr. executed his will, which included five articles, in October 2018. In article 4, the subject of the appeal, Wilson Sr. âg[a]ve all the residues of [his] succession to [his] brother, [Kevin Wilson], as trustee, IN TRUST, to be distributed to [Terrel, Sr.âs] family and others according to [his] instructions to [Wilson]. “
Wilson Sr. appointed Kevin as the personal representative of the estate and authorized the unattended administration of the estate in Section 5.
Wilson Sr. died in February. Three weeks later, Kevin filed a petition, which was accepted, to have the will probated without judicial oversight.
Then, in April, Terrel Wilson Jr. filed a motion asking Hendricks Superior Court to require Kevin to produce the section 4 trust of the will. Shortly thereafter, Wilson Jr. filed a motion to revoke the unattended administration of her father’s estate, arguing that the trust was invalid because it had failed to identify the beneficiaries with reasonable certainty, as required. Indiana code Â§ 30-4-2-1.
Wilson Jr. asked the trial court to make an order requiring supervision of the estate, to require Kevin to post a bond, to order a record of Kevin’s actions and to order the distribution of the remainder of the estate. succession, in accordance with IC 29-1-2- 4, under the law of intestate succession. The trial court allowed Wilson Jr.’s motion without a hearing.
In its order, the trial court found that the trust failed to identify the beneficiaries with reasonable certainty, as required by IC 30-4-2-1. The court ruled that â[b]because no trust can exist, the provision of the remainder of the estate by section 4 has no effect. As such, [pursuant to INDIANA CODE Â§ 29-1-2-4,] the residual property of the succession must be distributed according to the laws of intestate succession.
Two weeks later, Kevin filed a motion for error correction, arguing “[t]he beneficiary [had been] sufficiently identified from the language “to my family and others according to my instructions to him.” The court of first instance rejected his request.
Kevin reiterated this argument on appeal, but the ACO disagreed.
“While the trust settlor does not need to identify a beneficiary with exact precision, the settlor must give the trustee the ability to determine an intended beneficiary,” Judge Rudolph Pyle wrote, emphasizing Doll c. Job, 132 NE3d 34, 39 (Ind. Ct. App. 2019). âMore specifically, Â§ 30-4-2-1 (c) of the INDIANA CODE instructs the grantor to identify a beneficiary with” reasonable certainty “. â¦ Nothing close to such an identification exists here, where the designated beneficiaries are “my family and the others”.
ââ¦ Because the generalization ‘my family and the others’ does not meet the legal requirement that beneficiaries must be identified with reasonable certainty, the trust in the will is invalid. “
In two footnotes, the COA elaborated on its decision.
âWe further note that INDIANA CODE Â§ 29-1-2-4 provides that ‘[i]If part but not all of a deceased’s estate is validly disposed of by will, the part not assigned by will will be distributed as provided herein for intestate estates, âPyle wrote in the first footnote. . âThus, after invalidating the trust, the trial court correctly ordered the distribution of the residual assets of the estate according to the laws of intestate succession.
“… Finally, Wilson argues that the order of the trial court dismissing Wilson’s motion to correct the error”[ed] in an impermissible attack on the validity of the will, âPyle continued in the second footnote. âHowever, our review of the trial court order reveals that the trial court only invalidated the Trust. The court of first instance neither challenged the validity of the will nor invalidated it.
The case is In Re: The Supervised Estate, Kevin J. Wilson v. Terrel B. Wilson, Jr., 21A-ES-1406.