Remainder Beneficiaries entitled to accounting in Indiana

Woodward, the grantor of an irrevocable trust, was also a remainder beneficiary. His wife would receive proceeds in the event of his death for her health, support and maintenance. If and when she died, their sons would receive income for their support. If all the sons died without leaving issue before the Trust was distributed, then Woodward was the beneficiary, followed by St. Benedict Catholic Church in Evansville.

Woodward was the original trustee. Upon his resignation, Marshall & Ilsley was named trustee. Woodward asked for an accounting of the trust in March 2004 because he had concerns about administration of the trust; however, Marshall & Ilsley refused. The trial court in Marshall& Ilsely Trust Company, N.A. v. Woodward said that Woodward was entitled to an accounting as a remainder beneficiary under Indiana law, and the appellate court affirmed.

A remainder beneficiary is a personentitled to receive principal either 1) on the day before an income beneficiarydies or another terminating event occurs; or 2) on the last day of a periodduring which there is no beneficiary to whom a trustee may distribute income. SeeInd.Code § § 30-2-14-11, -20.

Under the firstprong, Woodward is a remainder [beneficiary] if the trust terminates because ofthe death of his childless grandchildren before distribution. Under the second prong, the children are the onlybeneficiaries to whom the trustee may distribute income. When there are noincome beneficiaries (i.e., when the last child dies), Woodward would beentitled to the trust principal if none of the children had issue.

            Although his right to the trust principal is contingent on his childlessgrandchildren                         predeceasing him, Woodward is within the definition of aremainder beneficiary under the                 statute.