FILED Mar 24 2020, 9:37 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE Karl L. Mulvaney Mark D. Hassler Gregory J. Duncan Jacob H. Miller Nana Quay-Smith Hassler Kondras Miller, LLP Bingham Greenebaum Doll, LLP Terre Haute, Indiana Indianapolis, Indiana Gerald H. McGlone Terre Haute, Indiana
IN THE COURT OF APPEALS OF INDIANA
In the Matter of the Revocable March 24, 2020 Trust Agreement Created by the Court of Appeals Case No. Settlor, Anil Kumar Sarkar 19A-TR-1814 Dipa Sarkar, Appeal from the Vigo Superior Court Appellant-Petitioner, The Honorable Sarah K. Mullican, v. Judge Trial Court Cause No. Anuradha (“Mili”) Sarkar 84D03-1503-TR-1438 Naugle, Appellee-Respondent.
Riley, Judge.
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 1 of 21 STATEMENT OF THE CASE [1] Appellant-Petitioner, Dipa Sarkar (Dipa), appeals the trial court’s findings of
facts and conclusions thereon in favor of Appellee-Respondent, Anuradha
Sarkar Naugle (Mili), concluding that the revocable trust was not created in
contemplation of death and for the purpose of defeating Dipa’s spousal elective
share.
[2] We affirm.
ISSUE [3] Dipa presents this court with one issue on appeal, which we restate as:
Whether a surviving spouse can satisfy her election to take against the will of
her deceased husband when he transferred the majority of his assets into a
revocable trust.
FACTS AND PROCEDURAL HISTORY [4] Dipa is the surviving spouse of Anil Sarkar (Anil), who died on February 24,
2015. Dipa and Anil were married in 1958 in India, where they attended
medical school, and remained married for fifty-six years until Anil’s death. At
the time of their marriage, Anil was a widower with two children from his
previous marriage, Ashoke Sarkar (Ashoke) and Mili. Dipa and Anil had one
child together, Rumu Sarkar (Rumu). They immigrated to the United States to
complete their medical residencies in pathology and became permanent
residents in 1961. Dipa and Anil brought Rumu with them to the United
States, while Ashoke and Mili remained in India for many years.
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 2 of 21 [5] In 1969, Dipa became the laboratory director at Mary Sherman Hospital in
Terre Haute, Indiana, while Anil became the laboratory director at Clay
County Hospital. Anil created the Sarkar Medical Corporation, which received
the couple’s salaries and provided a profit-sharing plan. Both Dipa and Anil
retired in 1990 due to Anil’s poor health.
[6] Beginning in the 1970’s and continuing throughout their marriage, Dipa and
Anil kept separate bank accounts, pension plan accounts, and investment
accounts. Anil spent a big part of his income on his extended family in India.
He took care of his parents and their farm; he built homes for his eight living
siblings as well as a school and latrines for the village, in addition to gifts and
supplies. Anil also financially supported Ashoke and Mili as adults, while Dipa
paid for Rumu’s expenses and education.
[7] In 1992, after they both retired, Dipa retained attorney Keith Lyman (Attorney
Lyman) to create a revocable trust of which she was the settlor and primary
beneficiary during her life. The primary purpose of the trust was “to provide for
the management of the settlor’s assets, both presently and during any future
period of disability; being a preferred alternative to guardianship proceedings
and a simplified means of accomplishing both lifetime and death transfers of
those assets.” (Exh. Vol. V, p. 173). The trust agreement provided that Dipa
was the primary beneficiary during her life, and for the administration of the
trust for her benefit during any period of incapacitation. Dipa’s trust agreement
specified that upon her death, the trustee would distribute to Anil “the
minimum amount necessary to reduce the federal estate tax payable as a result
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 3 of 21 of my death to the least amount possible,” and “I acknowledge that is it my
intent that the amount to be distributed to my spouse shall not exceed an
amount which will provide for zero tax upon my death.” (Exh. Vol. V, pp. 178-
79). Rumu was the sole primary beneficiary of the residue of the trust corpus
following any transfer to Anil necessary to reduce estate tax liability. Dipa’s
trust agreement also included that Anil, as successor trustee, would not have
the power to appoint any trust property for his benefit, and he was prohibited
from exercising discretion in his own favor.
[8] In 1993, at Dipa’s insistence, Anil also sought Attorney Lyman’s services, and
on August 23, 1993, Anil executed the Anil Kumar Sarkar Revocable Trust
Agreement, which was nearly identical in all respects to Dipa’s, except that Mili
was named as the residuary beneficiary. Both Dipa and Anil transferred their
respective investment accounts to their respective trusts, and on March 4, 1994,
both executed their own beneficiary designations naming their respective trusts
as beneficiaries of their respective interests in the Sarkar Medical Corporation
Profit-Sharing Trust and Pension Plan. By amendment on August 23, 1996,
Dipa and Anil both executed beneficiary designations for their respective
interests in the Sarkar Medical Corporation Profit-Sharing Trust and Pension
Plan naming the other as the primary beneficiary, with their respective trusts as
secondary beneficiary.
[9] On October 23, 1996, Attorney Lyman wrote a letter, addressed to both Anil
and Dipa, in which he restated the couple’s respective goals and objectives,
Anil’s being to provide for Mili and Dipa’s being to provide for Rumu. The
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 4 of 21 letter acknowledged a recent discussion with Anil and Dipa about “the
advantages of designating each spouse as the primary beneficiary on your
IRA’s” but stated that, “[b]oth of you have indicated to me that you do not
wish to leave your respective IRA accounts to each other,” and that “[e]ach of
you are generally uncomfortable with designating the spouse as the primary
beneficiary of the IRA proceeds because you would no longer maintain control
over the ultimate beneficiaries of each such IRA account after your respective
deaths.” (Exh. Vol. VI, p. 42). Additionally, Attorney Lyman included a
summary of a surviving spouse’s right to elect to take against a deceased
spouse’s will. After describing this right, Attorney Lyman advised,
Indiana law has determined that the spouse’s statutory election can be made only against the probate assets of the spouse who died first. It has been ruled that this right of election does not extend to trust assets. Whether that would continue to be the law of the State of Indiana remains to be seen. It is therefore possible that the second spouse to die could make a claim against the first to die’s IRA proceeds or possibly the trust. Therefore if you are willing to assume that risk, then you may proceed without any additional documentation.
(Exh. Vol. VI, p. 44). Lyman continued that if Anil and Dipa wished to
foreclose this possibility, another document would be required, but reiterated,
“[a]s I mentioned earlier, it is my opinion that this right of election would not
extend to the IRA’s or trust property.” (Exh. Vol. VI, p. 45). Neither Dipa nor
Anil executed any agreement to waive their spousal right to an elective share.
On November 1, 1996, Dipa and Anil both amended their respective trust
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 5 of 21 agreements, opting for distributions to each other’s respective non-spouse
beneficiaries and acknowledging that they chose to leave nothing to each other.
[10] Dipa continued to make amendments to her trust agreement with the aid of
Attorney Lyman. By letter, dated March 11, 1998, Attorney Lyman advised
Dipa of the benefits of purchasing life insurance and gifting, stating that
[w]e have discussed the tax advantages of naming your husband as primary beneficiary on those retirement accounts. You have informed me, however, that you would prefer not to name him as primary beneficiary because he has sufficient retirement assets in his own name and you have a desire to provide for your daughter primarily with retirement accounts, and other beneficiaries with your non-retirement accounts currently in your revocable trust.
(Exh. Vol. VI, pp. 212-14). On July 15, 1998, Attorney Lyman informed Dipa
that he could no longer represent either spouse. Referencing his letter of March
11, 1998, Attorney Lyman noted a potential conflict of interest between Dipa
and Anil, as Dipa indicated to him that she did not wish for him to discuss her
estate planning with Anil.
[11] On March 31, 1997, Anil restated his entire trust agreement (Trust or Trust
Agreement). The Trust Agreement provided that “because my spouse, [Dipa],
has more assets than I have and will not need my money or property to support
herself, I choose to leave nothing to her.” (Exh. Vol. VI, p. 110). In
accordance with this expressed intention, the Trust Agreement devised
$250,000 to Rumu, $100,000 to each of Mili’s two sons, $10,000 to Anil’s
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 6 of 21 brother Sekhar Sarkar, and $5,000 to Ashoke, with the remainder of the corpus
to Mili.
[12] Anil amended his Trust Agreement seven times, with the seventh and final
Trust amendment occurring on March 14, 2014. From the original Trust
Agreement through the fourth amendment, Anil made no provision for
distribution of any Trust assets to Dipa, stating, [b]ecause my spouse, [Dipa],
has more assets than I have and will not need my money or property to support
herself, I choose to leave nothing to her.” (Exh. Vol. VI, p. 110). Beginning
with the fifth amendment through the final amendment, Anil provided for Dipa
to receive $50,000. Specifically, in the final amendment, he named Mili as
successor trustee and directed her to distribute $250,000 to Rumu, $30,000 to
Ashoke, $50,000 to Sekhar, and $50,000 to Dipa if she survived him by thirty
days. The remainder of the Trust assets were to be distributed to Mili, or if she
was deceased, to her descendants per stirpes.
[13] The Trust Agreement was funded by two investment accounts owned by Anil.
One account, titled in the name of the Trust and held by Anil as trustee,
consisted of stocks and bonds and was valued at $924,635 at the time of Anil’s
death. The second account that funded the Trust Agreement was the IRA
valued at $1,007,614. Shortly before he died, Anil also had his monthly social
security payments diverted from his checking account into the Trust
Agreement.
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 7 of 21 [14] In 2000 and again in 2003, Dipa signed consent forms of persons other than
herself as beneficiaries of Anil’s Individual Retirement Account (IRA). On
August 23, 2007, Anil and Dipa both signed nearly identical sets of documents
for the transfer of their respective trust accounts and IRAs to Morgan Stanley,
and both designated their respective trust accounts as beneficiaries of their
respective IRAs. Neither spouse signed the other’s designation where indicated
for spousal consent required in community property states. Both Anil and Dipa
signed a joint letter to their joint financial adviser, directing payment from their
respective IRAs to their respective trusts, and on August 2, 2010, Dipa received
a mailing from Morgan Stanley which included detailed information about
Dipa’s and Anil’s investment plan and amounts invested.
[15] On January 20, 2014, thirteen months before his passing, Anil executed a
simple pour-over will that transferred his remaining probate assets, if any, to the
Trust Agreement. Anil appointed Rumu as his personal representative and
directed that she use his probate estate to pay all of his debts, medical expenses,
funeral expenses, estate administration expenses, and “all inheritance, estate,
and like taxes . . . payable by reason of [his] death and in connection with any
property, whether passing under this will or otherwise” without reimbursement
from any person. (Exh. Vol. II, pp. 16-18). Anil made no provision for Dipa in
his will other than to leave her his tangible personal property, such as his
clothes and household goods.
[16] Shortly after Anil’s death on February 24, 2015, Rumu filed a petition to
probate the will. The will was admitted to probate and Rumu was appointed as
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 8 of 21 personal representative the following day. On March 10, 2015, Dipa filed a
petition to docket the Trust and for relief, challenging the validity of Anil’s
Trust and the propriety of Anil’s decision to divert the majority of his assets to
the Trust in an attempt to disinherit her. Dipa subsequently filed an election to
take against the will under Indiana Code section 29-1-3-1, which Mili contested
as untimely. Mili moved for summary judgment on Dipa’s petition, which was
granted by the trial court. Consequently, Dipa timely appealed.
[17] On appeal, we concluded that Dipa had made a timely election to take against
Anil’s will and that, therefore, Dipa was allowed to amend her petition to more
specifically allege her elective share claim against the assets of Anil’s trust. See
Matter of Sarkar, 84 N.E.3d 666, 675 (Ind. Ct. App. 2017) (Sarkar I). Finding
genuine issues of material fact with respect to Dipa’s ability to satisfy her
elective share with the assets of Anil’s Trust, we remanded to the trial court for
further proceedings.
[18] On remand and after extensive discovery, the trial court conducted a trial over
four separate days, beginning July 6, 2018. Prior to trial, the parties stipulated
that Dipa suffered from an irreversible degenerative neurological condition and
lacked the capacity to testify. An agreement was reached that Dipa’s testimony
at trial would be limited to the deposition testimony she gave in August 2015.
On May 24, 2019, the trial court entered its findings of fact and conclusions
thereon, issuing judgment in favor of Mili. Recognizing that Anil’s Trust assets
were not subject to Dipa’s elective share, the trial court concluded, in pertinent
part, that:
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 9 of 21 10. [] Anil’s [T]rust was established in 1993, twenty-two (22) years prior to his death, for the purpose of obtaining assistance in personal and business affairs as well as disposing of his property at death. Anil had check writing authority on his [T]rust and could amend or modify it at any time. Both Anil and Dipa were present with [Attorney Lyman] when the original estate planning advice was provided. The couple agreed to dispose of their assets separately and not to each other. Dipa was aware of Anil’s [T]rust and its provisions because it was identical to hers. Further, Anil and Dipa used a joint financial adviser, [], who testified that the couple’s investments were identical. [The financial advisor] testified that Anil and Dipa came together to her office to execute financial documents and that each was aware of the others IRA and trust.
12. The [c]ourt finds no evidence that Anil’s intent in creating the [T]rust was to frustrate Dipa’s right to a statutory elective share. The [c]ourt further finds that Anil’s [T]rust was not created in contemplation of his death and is therefore not testamentary. Therefore, the [c]ourt finds that Anil’s [T]rust assets are not subject to Dipa’s statutory elective share.
(Appellant’s App. Vol. II, pp. 39-40).
[19] Dipa now appeals. Additional facts will be provided if necessary.
DISCUSSION AND DECISION I. Standard of Review
[20] The trial court entered special findings of fact and conclusions of law pursuant
to Indiana Trial Rule 52(A). These special findings should contain all the facts
necessary for recovery by the party in whose favor the conclusions of law are
found and should contain a statement of the ultimate facts from which the trial Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 10 of 21 court determines the legal rights of the parties to the action. Seslar v. Seslar, 569
N.E.2d 380, 383 (Ind. Ct. App. 1980). Special findings provide the parties and
the reviewing court with the theory on which the trial court decided the case so
that the right of review may be effectively preserved. See Display Fixtures Co. v.
R.L. Hatcher, Inc., 438 N.E.2d 26, 30 (Ind. Ct. App. 1982). Where a party
challenges special findings and conclusions, our standard of review is two-
tiered. First, we determine whether the evidence supports the findings, and
second whether the findings support the judgment. Dunnewind v. Cook, 697
N.E.2d 485, 487 (Ind. Ct. App. 1998). The trial court’s findings and
conclusions will be set aside only if they are clearly erroneous. Id. Findings of
fact are clearly erroneous if the record lacks any evidence or reasonable
inferences to support them. Id. In reviewing the trial court’s entry of special
findings, we neither reweigh the evidence nor reassess the credibility of the
witnesses. Id. Rather, we must accept the ultimate facts as stated by the trial
court if there is evidence to sustain them. Id. This court may affirm the
judgment on any legal theory supported by the findings, but only if the
alternative theory has been briefed by all parties and is consistent with all of the
trial court’s findings and inferences drawn therefrom. Mitchell v. Mitchell, 695
N.E.2d 920, 923-24 (Ind. 1998).
II. Elective Share of Surviving Spouse
[21] Dipa contends that Anil’s transfer of assets to his Trust Agreement signaled a
clear intent to disown her and divest her of her right to take against the will. As
Anil’s Trust was created in contemplation of death and with a clear intent to
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 11 of 21 disinherit her, Dipa maintains the trial court erred to deny her right to take her
statutory elective share from the Trust’s assets.
[22] It is well-established that in Indiana, surviving spouses hold certain statutory
rights upon the death of their spouse. Boetsma v. Boetsma, 768 N.E.2d 1016,
1020 (Ind. Ct. App. 2002), trans. denied. As such, pursuant to Indiana Code
section 29-1-3-1, the surviving spouse of an individual who dies testate may
elect to take against the will if the surviving spouse is not satisfied with the
provision made for him or her in the will. In re Estate of Weitzman, 724 N.E.2d
1120, 1122 (Ind. Ct App. 2000). Thus, our statutory law protects a spouse from
being disinherited by providing a spousal allowance from their deceased
spouse’s estate and the ability of the surviving spouse to take against the
provisions of the deceased spouse’s will, thereby ensuring a certain degree of
future support. Brown v. Guardianship of Brown, 775 N.E.2d 1164, 1167 (Ind. Ct.
App. 2002). A surviving spouse may only waive his or her right to take against
the will by a written agreement after full disclosure of the nature and extent of
that right. I.C. § 29-1-3-6. No such written agreement was executed in this
case.
[23] In determining the estate of the deceased spouse for the purpose of computing
the amount due to the spouse electing to take against the will, the court is to
consider only such property as would have passed under the laws of descent
and distribution. In re Estate of Weitzman, 724 N.E.2d at 1123. A valid inter
vivos trust does not pass under the laws of descent and distribution and thus
does not become part of the decedent’s probate estate. Dunnewind, 697 N.E.2d
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 12 of 21 at 488. In In re Walz, 423 N.E.2d 729, 732 (Ind. Ct. App. 1981), we described
the effect of an inter vivos trust as follows:
The inter vivos trust is a unique legal entity. Through its use, the settlor may transfer property to a trustee reserving for the life of the settlor the beneficial use of the property with the remainder to designated beneficiaries. Although the settlor enjoys the beneficial use of the trust property until his death that trust property is not subject to the administration of his estate. That is, the trust property is not in the decedent-settlor’s estate. The Probate Code, which controls the distribution of the decedent’s property, does not control the inter vivos distributions of property.
[24] However, in recent years, Indiana jurisprudence started recognizing a spouse’s
ability to enforce his or her elective share claim against the deceased spouse’s
non-probate property under certain circumstances. Through Leazenby v. Clinton
Co. Bank & Trust, 355 N.E.2d 861 (Ind. Ct. App. 1976) and its progeny, Indiana
precedents have shaped the conditions in which a surviving spouse may reach
beyond the will into a valid inter vivos trust to satisfy the statutory elective right
when faced with insufficient probate assets.
[25] In Leazenby, we held that an inter vivos trust established by a wife successfully
transferred her property and removed it from the estate, thereby in effect
defeating her husband’s interest in his statutory elective share. Id. at 866. We
reached this conclusion by recognizing that a transfer solely for the purpose of
defeating the spouse’s statutory share is void. However, we found that wife and
husband, a subsequent childless spouse, had maintained separate properties and
that wife had gone to the bank to establish a trust for the purpose of obtaining
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 13 of 21 aid in handling her affairs three years prior to her death. Id. at 862. The trust
agreement reserved to the wife the right to income from the trust for life, the
right to control the actions of the trustee, and the right to revoke. Id. Husband
was granted the right to reside in the settlor’s former house for six months
following her death. Id. As time went on, wife was confined to a nursing home
and her separate funds were used to pay for her care. Id. The Leazenby court
observed that it was obvious husband was aware of this situation and had
acceded to it. Id. at 866. There was no indication that it was the settlor’s intent
to use the device of a trust to defeat her husband’s statutory share in her estate;
rather, she had merely conveyed a portion of her estate during her lifetime,
which she had every right to do. See id. at 866-67.
[26] Approximately ten years later, in Walker v. Lawson, 526 N.E.2d 968, 969 (Ind.
1988), our supreme court was faced with the question of whether it was
malpractice for an attorney to draft a will, and not a trust, for a client who had
recently learned of a fatal diagnosis and who “had come [to the attorney] for
the stated purpose of depriving her husband of any interest in her estate.”
Acknowledging both the rule set forth in Leazenby and the holding of
Crawfordsville Trust Co. v. Ramsey, 100 N.E.1049 (Ind. Ct. App. 1913), in which
the court upheld the trial court’s invalidation of assignments of stock and bonds
by a spouse who made the assignments knowing he would soon die and for the
sole purpose of defeating his spouse’s elective rights with respect to the assigned
property, the Walker court ruled that neither the conveyance of her land to a
trust naming her children as beneficiaries nor a conveyance of that land to
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 14 of 21 herself and her children with survivorship rights would have been effective
against the surviving spouse’s elective rights. Id.
[27] Again after a ten-year interval, this court decided Dunnewind, 697 N.E.2d at
487, where we found in favor of the surviving spouse’s right of election. Here,
the settlor executed a will in 1976 in which she left all her assets to her children
from a prior marriage. Id. at 487. After discovering she was terminally ill in
1995, she created a trust under which her husband would receive a life estate in
the marital residence and household goods, as well as a predetermined sum of
money, with the remainder to go to settlor’s children. Id. The trust made no
provision for payment of income to the settlor. Based on the evidence
presented, the Dunnewind court opined that “there was no showing that the trust
was executed to assist the [settlor] with business or financial affairs,” and held
that “the evidence presented at the hearing supports the trial court’s findings
that [the settlor] executed the trust in contemplation of her impending death
and did so to defeat [husband’s] statutory share . . . Given such circumstances,
the trust fails to defeat the spouse’s share given the law announced in
Crawfordsville and Walker.” Id. at 487, 490. We also noted that the trust had a
“testamentary character,” because the trust agreement did not give the settlor a
life interest in the trust property, yet the trustee, the settlor’s daughter, permitted
her to reside in the residential property and paid to her the trust’s income until
the settlor’s death. Id. The court found that neither the settlor nor the
beneficiaries intended the transfer to the trust to take effect until the settlor’s
death, similar to the finding in Crawfordsville. Id. at 490.
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 15 of 21 [28] Finally, in In re Estate of Weitzman, 724 N.E.2d 1120, 1121 (Ind. Ct. App. 2000),
both husband and wife had children from a prior marriage. Before the
marriage, Wife refused to sign a prenuptial agreement that would have waived
her elective share rights to her husband’s estate. Id. Four years into the
marriage, husband executed a revocable living trust, benefiting his children and
appointing the bank as trustee while husband retained the power to direct all
trust investment and receive the income from the trust. Id. Within three years,
husband transferred significant assets into the trust. Id. Wife knew that
husband had a trust; however, there was no evidence she was aware of the
provisions of the trust. Id. at 1121-22. Husband died six years after creating the
trust and several years after funding it. Id. After describing the nature and
effect of an inter vivos trust and restating the general rule in Leazenby and the
policy grounds upon which that decision was reached, the Weitzman court
stated, “[t]here is one pertinent exception to the rules and policies we relied on
in Leazenby. When a testator executes a trust in contemplation of his impending
death and does so in order to defeat the surviving spouse’s statutory share, the
trust will be considered testamentary in nature and will not defeat the spouse’s
share.” Id. at 1123. Finding that the facts did not negate the possibility that
husband’s intent was to defeat the surviving spouse’s elective share, we reversed
the trial court’s summary judgment in favor of husband and remanded for trial.
Id. at 1125.
[29] Accordingly, based on these precedents, the determinative issue before us is
whether the trial court properly found that Anil did not establish the Trust in
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 16 of 21 contemplation of his death and with the purpose of defeating Dipa’s statutory
share. As we noted in Sarkar I, “[t]he question of whether a testator has
established a trust in contemplation of death and with the intent of defeating his
surviving spouse’s statutory share is a fact-sensitive inquiry.” Sarkar I, at 677.
A. In Contemplation of Death
[30] Although Anil created the Trust in 1993, he restated the instrument in its
entirety on March 31, 1997. Anil passed away eighteen years later, on
February 24, 2015. When a trust agreement is restated, the reader should
“forget all prior documents and just look at this document, because these are
the trust provisions that are currently in effect.” Bender, 1 Living Trusts, Forms
and Practice, § 9.07 (2019). However, to analyze and determine Anil’s actions
and intent, we will need to take into account the circumstances surrounding the
prior version of the Trust.
[31] Anil’s purpose of his restated Trust indicated that he pursued “a simplified
means of accomplishing both lifetime and death transfers” of his assets, with
assistance in his personal and business affairs. (Exh. Vol. VI, p. 109). Unlike
Dunnewind where there was no showing that the trust was executed to assist in
financial affairs, Anil’s Trust, created after he retired, was initially utilized as
part of his estate and income tax planning efforts, and it later held and managed
the trust assets, with Anil having check writing authority. See Dunnewind, 697
N.E.2d at 487. Appointing himself as trustee, Anil retained all trust property
under his control, “with no restrictions on the transferability of such property.”
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 17 of 21 (Exh. Vol. VI, p. 112). He amended the Trust seven times, with the final
amendment executed approximately one year prior to his death.
[32] Although the record is documented with Anil’s extensive cardiac health
problems, contrary to Dunnewind and Walker, there is no evidence indicating
that Anil expected to die anytime soon after the effectuation of the Trust
instrument. See Dunnewind, 697 N.E.2d at 487 (trust was created after
becoming terminally ill); Walker, 526 N.E.2d at 969 (trust was created after
settlor learned of fatal diagnosis). Rather, it was not until 2013, or twenty years
after creating the initial trust, that Anil voiced his concerns to Rumu of an
impending death. There is no evidence in the record that throughout the
lifetime of the Trust—original or restated with amendments—Anil’s position
with respect to the purpose of the Trust and identification of the remainder
beneficiaries ever changed. Likewise, there is no evidence that any amendment
was effectuated in expectation of death. Rather, the amendments only
fluctuated the amount left to each remainder beneficiary, leading us to conclude
that internal family relationships played a significant role in the creation of the
amendments and not any belief that Anil was to die shortly.
[33] As in Weitzman, significant assets were transferred into the trust throughout the
years, with the most recent transfer being Anil’s social security payments. See
In re Weitzman, 724 N.E.2d at 1122. However given the fact that the Trust had
been assembling Anil’s assets since 1993—the investment account and IRA had
been transferred to the Trust by 1998—and that the social security payments
only amount to a minor addition to the complete Trust corpus, we cannot
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 18 of 21 conclude that this transfer alone would change our conclusion that Anil’s Trust
and corresponding transfers of assets were not created in contemplation of
death.
B. Intention to Disinherit
[34] While the Trust’s express stated purpose was to assist Anil with his business
and financial affairs, at the same time, Anil also acknowledged in the
instrument that “[b]ecause my spouse, [Dipa], has more assets than I have and
will not need my money or property to support herself, I choose to leave
nothing to her.” (Exh. Vol. VI, p. 110). Attorney Lyman testified extensively
about Anil and Dipa’s corresponding estate planning goal to leave their
significant assets to their non-spousal beneficiaries. Nevertheless, this explicit
intent appears to be contradicted beginning with the fifth amendment through
the final amendment, where Anil directed “the trustee to distribute, to [his]
spouse, [Dipa], the sum of Fifth [sic] Thousand Dollars ($50,000.00), outright
and free of trust, if she survives me by thirty (30) days[.]” (Exh. Vol. II, p. 21).
[35] Throughout their married life, Anil and Dipa kept their financial affairs divided
with separate bank accounts, pension plan accounts, and investment accounts.
Although Anil and Dipa initially retained Attorney Lyman to create their
individual trust accounts and to advise them on the legal ramifications thereof,
by July 1998, a potential conflict of interest ceased Attorney Lyman’s
representation and Anil and Dipa consulted with their individual attorneys, but
were still advised by the same financial advisor at Morgan Stanley. However,
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 19 of 21 throughout the time that Attorney Lyman represented Anil and Dipa, they met
with him together on most, if not all occasions, and discussed their respective
trust provisions in the presence of each other. Attorney Lyman testified that
Anil and Dipa had an agreement “to dispos[e] of their assets to their respective
beneficiaries and not to each other.” (Exh. Vol. V, p. 49). After designating a
non-spousal remainder beneficiary of the trust corpus at the creation of their
respective trusts, both Anil and Dipa amended their trust agreements on
November 1, 1996, again opting for distributions to non-spousal beneficiaries
and acknowledging that they chose to leave nothing to each other.
[36] In 2007, Anil and Dipa signed a joint letter to their joint financial advisor
directing payment from their respective IRAs to their respective trusts. On
August 2, 2010, Dipa received a mailing from Morgan Stanley, which included
detailed information about both Dipa’s and Anil’s respective investment plan,
IRA, and IRA beneficiary. They continued to meet jointly with their financial
advisor and they reviewed “both client account assets at the same time.” (Exh.
Vol. VIII, p. 15).
[37] Accordingly, unlike Weitzman, where the wife knew that husband had a trust
but was unfamiliar with its provisions, here, there is overwhelming evidence
from which the trial court could have reasonably inferred that Anil and Dipa
were aware of the other spouse’s trust provisions and estate planning. See In re
Weitzman, 724 N.E.2d at 1121. In fact, Anil and Dipa commenced their trust
creation with the same attorney and although they later retained individual
counsel, they were advised by the same financial planner, and had joint
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 20 of 21 meetings in which their respective assets were discussed. Anil transferred his
assets to the Trust with Dipa’s full knowledge while at the same time she
transferred her own assets to a nearly identical trust. As there is “no conclusive
evidence that there was a secreting of the real ownership of the property, or that
[Dipa] did not know and fully approve of the trust agreement,” we conclude
that Anil did not create the Trust with the intent to disinherit Dipa. See
Leazenby, 355 N.E.2d at 866. Consequently, as there is substantial evidence that
Anil did not create the Trust in contemplation of death and with the intent to
disinherit Dipa, we affirm the trial court’s decision to deny Dipa’s claim to
satisfy her spousal elective share from the Trust corpus.
CONCLUSION [38] Based on the foregoing, we hold that Dipa cannot satisfy her statutory election
to take against the will with the assets in her deceased husband’s inter vivos
Trust.
[39] Affirmed.
[40] Baker, J. and Brown, J. concur
Court of Appeals of Indiana | Opinion 19A-TR-1814 | March 24, 2020 Page 21 of 21