Indiana Court of Appeals Opinion Upholds the Importance of Accountings in Trust Administration

Two siblings, after a mediated settlement and petitioning properties, two siblings again saw themselves against each other in court. Scott sued his sister, Stacey, in her capacity as trustee of his trust in In Re: The Scott David Hurwich 1986 Irrevocable Trust. Scott alleged that his sister did not provide an accounting, misused trust assets, and misappropriation of $107,000 of trust assets, which were characterized as trust expenses.

At trial, Stacey did not dispute that she did not provide an accounting, but alleged that she had not done so for years and that Scott had never complained; thus, the two-year statute of limitations barred the claim. The trial court agreed. The court did find that she did wrongfully use trust funds for personal expenses amounting to a breach of trust and ordered Stacey to reimburse Scott his proportionate share of the funds, which was less than $500. It refused to aware Scott attorney fees, though, and even found that the $107,000, which was used for some of Stacey’s litigation involving other family members, there was no wrongful conduct.

At the appellate level, the court agreed with the finding that the two-year statute of limitations applied because Scott could not explain why he waited so long to bring the claim. It reversed the lower court’s decision and ruled that there had been a breach of trust involving the $107,000, because none of the invoices contained Scott’s name and that Stacey had not justified the propriety of the expenses. The Indiana Court of Appeals also found that the trial was statutorily required to award whenever the court found a breach of trust.

See Sarah C. Jenkins & Jason M. Rauch, Indiana Court of Appeals Opinion Upholds the Importance of Accountings in Trust Administration, FaegrBD.com, July 22, 2019.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.