§ 30-4-3-7 — Self-dealing; transactions between trusts

Indiana § 30-4-3-7

• Jurisdiction: Indiana
• Art. 4: TRUST CODE
• Ch. 3: Rules Governing the Rights, Powers, Duties, Liabilities,

Text

(a) Unless the terms of the trust provide
otherwise or the transaction is authorized under section 7.5 of this
chapter, IC 28-1-12-8, or IC 28-6.1-6-26, the trustee has a duty:
(1) not to loan funds to the trustee or an affiliate;
(2) not to purchase or participate in the purchase of trust property
from the trust for the trustee's own or an affiliate's account;
(3) not to sell or participate in the sale of the trustee's own or an
affiliate's property to the trust; or
(4) if a corporate trustee, not to purchase for or retain in the trust
its own or a parent or subsidiary corporation's stock, bonds, or
other capital securities. However, the trustee may retain such
securities already held in trusts created prior to September 2,
1971.
(b) Unless the terms of the trust provide otherwise, a corporate
trustee may invest in, purchase for, or retain in the trust its own or an
affiliate's obligations, including savings accounts and certificates of
deposit, without the investment, purchase, or retention constituting a
conflict of interest under section 5 of this chapter.
(c) Unless the terms of the trust provide otherwise, a corporate
trustee does not violate subsection (a) by investing in, purchasing for,
or retaining in the trust its own or an affiliate's obligations, including
savings accounts and certificates of deposit, if the payment of each
obligation is fully insured by the Federal Deposit Insurance
Corporation, the National Credit Union Share Insurance Fund, or any
insurer approved by the department of financial institutions under IC 28-7-1-31.5.
(d) If the terms of the trust permit the trustee to deal with a
beneficiary for the trustee's own account, the trustee has a duty to deal
fairly with and to disclose to the beneficiary all material facts related
to the transaction which the trustee knows or should know.
(e) Unless the terms of the trust provide otherwise, the trustee may
sell, exchange, or participate in the sale or exchange of trust property
from one (1) trust to the trustee as trustee of another trust, provided the
sale or exchange is fair and reasonable with respect to the beneficiaries
of both trusts and the trustee discloses to the beneficiaries of both trusts
all material facts related to the sale or exchange which the trustee
knows or should know.
(f) This section does not prohibit a trustee from enforcing or
fulfilling any enforceable contract or agreement:
(1) executed during the settlor's lifetime; and
(2) between the settlor and the trustee in the trustee's individual
capacity.
Formerly: Acts 1971, P.L.416, SEC.4. As amended by Acts
1982, P.L.171, SEC.118; P.L.174-1986, SEC.1; P.L.8-1991, SEC.34;
P.L.176-1996, SEC.34; P.L.238-2005, SEC.34; P.L.202-2007, SEC.3;
P.L.226-2007, SEC.22; P.L.89-2011, SEC.75; P.L.194-2017,
SEC.9.