Property given in trust lost its trust character after trustees expended it for charitable purpose

In St. Mary’s Medical Center, Inc. v. McCarthy, 829 N.E.2d 1068 (Ind. Ct. App. 2005), the testator’s will devised a portion of the residue in trust for the benefit of a hospital to be spent as directed by a committee of persons named in the will to create a memorial to the testator’s family.

The committee expended the trust property to build a chapel on the hospital grounds completed in 1956.

In 2003, the hospital decided to raze the chapel to expand its facilities.

The court determined that (1) the expenditure of the trust property to build the chapel terminated the testamentary trust, (2) the will did not create a successor trust with the hospital as trustee, and (3) the will did not create a condition subsequent.

Special thanks to Rita and Joseph Solomon  Prof. William P. LaPiana for contributing this case.