Kristoff v. Centier Bank establishes that generation-skipping transfer tax exempt trust cannot be terminated merely because current beneficiary does not have descendants. Ten years after a mother’s death, one of her daughters petitioned the court to terminate the trust created for her on the grounds that the trust was created to preserve the GST tax exempt amount for the mother’s grandchildren, and that because she and her sister had no children nor ever would, the trust should be terminated under state law which authorizes the court to direct deviation from the terms of a trust and to modify administrative or dispositive terms if the changes will further the purposes of the trust because of the existence of circumstances unknown to the settlor. The trial court granted summary judgment to the trustee, the daughter appealed, and the Indiana intermediate appellate court affirmed. The court found that the trust terms showed that the primary purpose of the trust was to provide for the daughter to whom the trustee had sole discretion to distribute income and principal for maintenance, health, education and welfare. In addition, the daughter had a special testamentary power of appointment over any trust property remaining at her death and only unappointed property would pass to the mother’s other descendants.
See Kristoff v. Centier Bank, No. 45A03–1204–TR–186, 2013 WL 587477 (Ind. Ct. App. Feb. 15, 2013).
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.
