Indemnification agreement the beneficiaries executed as part of a receipt for distribution is not a trust instrumentt
, 686 S.E.2d 284 (Ga. Ct. App. 2009): The trustee in Heiman made distributions to the beneficiaries of the trust and the beneficiaries executed a release and indemnification agreement releasing the trustee for all claims “of whatever kind or nature.” Seven years later and after the trustee’s resignation, the beneficiaries sued alleging fraud, negligence, and other wrongdoing. The trustee brought a breach of contract counterclaim, which was dismissed by the trial court on the grounds that the release violated state law making ineffective any provision in a “trust instrument” that purports to relieve the trustee from liability for breaches in bad faith, done intentionally, with reckless indifference or involves self-dealing.
On appeal, the intermediate Georgia appellate court reversed, holding that the release was not a trust instrument and that the release did not violate public policy to the extent it applied to conduct preceding execution of the release.