Indiana Code 30-4-3-7. Self-dealing; transactions between trusts
(1) not to loan funds to the trustee or an affiliate;
Terms Used In Indiana Code 30-4-3-7
- Affiliate: means a parent, descendant, spouse, spouse of a descendant, brother, sister, spouse of a brother or sister, employee, director, officer, partner, joint venturer, a corporation subject to common control with the trustee, a shareholder, or corporation who controls the trustee or a corporation controlled by the trustee other than as a fiduciary, an attorney, or an agent. See Indiana Code 30-4-1-2
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: has the meaning set forth in IC 30-2-14-2. See Indiana Code 30-4-1-2
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- Settlor: means a person who establishes a trust including the testator of a will under which a trust is created. See Indiana Code 30-4-1-2
- Trust property: means 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. See Indiana Code 30-4-1-2
- Trustee: A person or institution holding and administering property in trust.
- Trustee: has the meaning set forth in IC 30-2-14-13. See Indiana Code 30-4-1-2
(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.