Court Opinion

ID: 4387364
Source: CourtListenerOpinion
Date Created: 2019-04-15 15:03:38.790149+00
Date Added: 2024-06-11T07:49:49.731188
License: Public Domain

FILED
                                                                            Apr 15 2019, 8:52 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court

      ATTORNEY FOR APPELLANT                                      ATTORNEY FOR APPELLEE
      Joseph J. Zaknoen                                           Douglas L. Biege
      Espar & Associates, P.C.                                    Drayton, Biege, Sirugo &
      Michigan City, Indiana                                       Elliott, LLP
                                                                  LaPorte, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      John W. Homan, Successor                                    April 15, 2019
      Trustee to the February 15, 2013                            Court of Appeals Case No.
      Trust No. 102433,                                           18A-EU-1801
      Appellant-Petitioner,                                       Appeal from the LaPorte Circuit
                                                                  Court
              v.                                                  The Honorable Thomas J.
                                                                  Alevizos, Judge
      The Unsupervised Estate of                                  Trial Court Cause No.
      Robert L. Homan, deceased,                                  46C01-1601-EU-20
      Appellee-Respondent

      Vaidik, Chief Judge.

                                            Case Summary
[1]   In Indiana, an owner of property can place that property in trust by declaring in

      writing that he or she holds it as trustee. The trust agreement at issue in this

      case provides that “[t]he GRANTOR hereby transfers to himself as TRUSTEE
      Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019                            Page 1 of 7
      the property listed on the attached schedule, marked Schedule ‘A’, and

      incorporated herein,” but the Schedule “A” attached to the agreement is blank.

      The issue is whether certain farm land discussed in a different part of the trust

      agreement was placed in trust notwithstanding the blank Schedule “A.” We

      hold that it was not.

                             Facts and Procedural History
[2]   Robert L. Homan died in January 2016. During his lifetime, he had owned

      approximately 300 acres of farm land in LaPorte County. When he died, his

      brother Paul F. Homan—the personal representative under Robert’s 2009

      will—opened an unsupervised estate and began taking actions relating to the

      farm land (i.e., renting land and selling crops). Later the same year, Robert’s

      nephew, John W. Homan, filed a petition asking the trial court to convert the

      estate from unsupervised to supervised. John alleged that he is the successor

      trustee of a trust that Robert created in 2013, that Robert had put the farm land

      into the trust, that as a result the land was no longer part of Robert’s personal

      estate, and that Paul’s actions relating to the land are therefore improper.

[3]   The trust agreement begins by naming Robert as grantor and initial trustee and

      John as successor trustee:

              THIS TRUST AGREEMENT executed this _15_ day of _Feb_,
              2013 by Robert L. Homan a/k/a Robert Homan of LaPorte
              County, Indiana, hereinafter “GRANTOR”, and “TRUSTEE”.
              If at any time Robert L. Hohman [sic] should be unable or

      Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019         Page 2 of 7
        unwilling to serve as TRUSTEE, the first successor trustee would
        the [sic] GRANTOR’S nephew, John W. Homan.

Appellant’s App. Vol. II p. 45. It then defines the “trust estate” as follows:

        The GRANTOR hereby transfers to himself as TRUSTEE the
        property listed on the attached schedule, marked Schedule “A”,
        and incorporated herein. That property and all investments and
        reinvestments thereof and additions thereto are herein
        collectively referred to as the “trust estate” and shall be held and
        disposed of upon the following trusts[.]

Id. However, the Schedule “A” attached to the agreement does not actually

identify any property—it is blank. Id. at 54. In the trial court, John

acknowledged that Schedule “A” was blank but argued that the farm land is

nonetheless trust property because Article III of the agreement discusses the

management and distribution of the farm land:

               After the death of the GRANTOR [Robert] . . . the
        SUCCESSOR TRUSTEE [John] will continue holding the assets
        in the trust upon the following terms and conditions:

               (a)     The SUCCESSOR TRUSTEE will continue the
        farm operation, held in the trust, so that the net income from 150
        acres of such farm ground will be distributed to the
        GRANTOR’S brother, Paul F. Homan. When Paul F. Homan
        passes, if he is survived by his wife, Carolyn, then she will receive
        the net income from that same amount of acreage and then, upon
        the death of the latter of Paul F. Homan and his wife, Carolyn
        Homan, their daughter, Cathleen Homan, shall receive the
        income therefrom for her natural lifetime.

Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019             Page 3 of 7
                     (b)    The GRANTOR’S nephew, David L. Homan, shall
              be entitled to receive the net income from 100 acres of farm
              ground. If David L. Homan is not surviving, or upon his death,
              then the GRANTOR’S nephew, John W. Homan shall receive
              the income from that 100 acres of ground.

                     (c)    The remainder of any and all tillable acres as well as
              the income from all other sources of this trust shall be distributed
              to the GRANTOR’S nephew, John W. Hohma [sic] and then if
              he is not surviving or upon his death, that income will be
              distributed to his brother, David L. Homan.

      Id. at 46-47. Notwithstanding this discussion of the farm land, the trial court

      denied John’s petition to convert the estate from unsupervised to supervised

      and struck the trust agreement from the record, noting that “on Schedule ‘A’,

      there is no mention of farm land placed into the trust.” Id. at 123.

[4]   John now appeals.

                                  Discussion and Decision
[5]   John contends that the farm land is trust property by virtue of the trust

      agreement and that the trial court therefore erred by not requiring supervision of

      Robert’s estate and by striking the trust agreement from the record.

      Interpretation of a trust instrument is an issue of law that we review de novo.

      Fulp v. Gilliland, 998 N.E.2d 204, 207 (Ind. 2013).

[6]   Initially, we note that, in addition to leaving Schedule “A” blank, Robert never

      executed a deed transferring the farm land to the trust. Paul asserts that this

      Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019             Page 4 of 7
      fact, alone, is enough to establish that the farm land is not trust property. He

      cites Indiana Code section 32-21-1-13, which provides that, generally, “a

      conveyance of land or of any interest in land shall be made by a deed that is: (1)

      written; and (2) subscribed, sealed, and acknowledged by the grantor (as

      defined in IC 32-17-1-1) or by the grantor’s attorney.” But as our Supreme

      Court has explained, “‘If the owner of property declares himself trustee of the

      property, a trust may be created without a transfer of title to the property.’”

      Hinds v. McNair, 235 Ind. 34, 52, 129 N.E.2d 553, 563-64 (1955) (quoting

      Restatement (First) of Trusts § 17 cmt. a (Am. Law Inst. 1935)); see also Kesling

      v. Kesling, 967 N.E.2d 66, 79 (Ind. Ct. App. 2012), trans. denied. In other words,

      while a separate deed could certainly provide clarity, a written trust instrument

      can satisfy the written-deed requirement. See, e.g., Restatement (Third) of

      Trusts § 10 (Am. Law Inst. 2003); Rose v. Waldrip, 730 S.E.2d 529 (Ga. Ct. App.

      2012); Ladd v. Ladd, 323 S.W.3d 772 (Ky. Ct. App. 2010); Estate of Heggstad, 16
Cal. App. 4th 943 (1993).

[7]   The question we must address is whether the trust agreement was sufficient to

      make the farm land property of the trust. We hold that it was not. Indiana’s

      Trust Code defines “trust property” as “property either placed in trust or

      purchased or otherwise acquired by the trustee for the trust regardless of

      whether the trust property is titled in the name of the trustee or the name of the

      trust.” Ind. Code § 30-4-1-2(22). One way for property to be “placed in trust”

      is “a declaration by an owner of property that he or she holds that property as

      trustee for one or more persons[.]” Restatement (Third) of Trusts § 10. Here,

      Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019           Page 5 of 7
      the trust agreement includes the framework for such a declaration when it says,

      “The GRANTOR hereby transfers to himself as TRUSTEE the property listed

      on the attached schedule, marked Schedule ‘A’, and incorporated herein.”

      However, because Schedule “A” was left blank, it cannot be said that Robert

      “declared” himself trustee of the farm land or any other property.

[8]   John directs us to Indiana Code section 30-4-2-1(b), which provides, in part,

      that “no formal language is required to create a trust, but the terms of the trust

      must be sufficiently definite so that the trust property . . . may be ascertained

      with reasonable certainty.” John contends that, despite the blank Schedule

      “A”, the property Robert “intended to be trust property can be ‘ascertained with

      reasonable certainty’” because the farm land is discussed in the distribution

      section of the trust agreement. Appellant’s Br. p. 27. He emphasizes the

      provision that he (as successor trustee) “will continue the farm operation, held

      in trust . . . .” Appellant’s App. Vol. II p. 47. Judging by this language, it may

      be that Robert intended to place the farm land into the trust and simply

      neglected to complete Schedule “A.” But in determining whether property

      meets the definition of “trust property” under Indiana Code section 30-4-1-

      2(22), the question is not whether the owner “intended” to place the property in

      trust but whether the property was, actually, “placed in trust.” Here, neither

      the farm land nor any other property was “placed in trust.”

[9]   John’s focus on the requirement in Section 30-4-2-1(b) that “the terms of the

      trust must be sufficiently definite so that the trust property . . . may be

      ascertained with reasonable certainty” is misplaced. That provision pertains to

      Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019            Page 6 of 7
       the situation where generally described property (e.g., “my home,” “my farm,”

       “my car”) has been placed in trust and the question is whether the precise

       property can be identified. For example, if a trust instrument says “I hereby

       place my home in trust” and does not include any additional identifying

       information, the question is whether the “home” at issue can be “ascertained

       with reasonable certainty.” If it cannot, and the “home” was the sole property

       transferred into the trust, then no trust was created. See Restatement (Third) of

       Trusts § 40 cmt. e (“[A]lthough S may declare himself trustee of all of the stocks

       and bonds he owns at the time of the declaration, if he declares himself trustee

       of ‘the bulk of my securities’ or purports to transfer ‘some substantial portion of

       my X Co. stock’ to T in trust, no trust is created.”); Restatement (Second) of

       Trusts § 76 cmt. a (Am. Law Inst. 1959) (“A, the owner of Blackacre, purports

       to convey to B in trust for C ‘a small part’ of Blackacre. No trust is created.”);

       Scott on Trusts § 76 (4th ed. 1987); Bogert, The Law of Trusts and Trustees §

       111 (2d ed. rev. 1984). This provision has no application where, as here, no

       property—not even generally described property—has been placed in trust.

[10]   Because Robert never declared himself trustee of his farm land, the farm land is

       not property of the trust, and the trial court did not err by denying John’s

       petition to convert the estate from unsupervised to supervised or by striking the

       trust agreement from the record.

[11]   Affirmed.

       Mathias, J., and Crone, J., concur.

       Court of Appeals of Indiana | Opinion 18A-EU-1801 | April 15, 2019         Page 7 of 7