Indiana Code 30-4-2.1-12. Order of abatement; other rules governing abatement
(1) The interests that would be characterized as residuary devises if the trust were a will.
Terms Used In Indiana Code 30-4-2.1-12
- 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
- Devise: To gift property by will.
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- 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 instrument: means an instrument, agreement, or other written document executed by the settlor that contains the terms of the trust, including any amendments to the terms of the trust. 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
(3) The interests that would be characterized as specific devises if the trust were a will.
The amount abated for each beneficiary within each classification described in subdivisions (1) through (3) must be proportional to the amount of property that each beneficiary would have received if full distribution of the trust property had been made in accordance with the terms of the trust instrument.
(b) If:
(1) a trust instrument expresses an order of abatement that differs from the order set forth in subsection (a); or
(2) the order of abatement stated in subsection (a) would impair an express or implied purpose of the trust;
the interests of the beneficiaries must be abated in the manner determined appropriate to give effect to the settlor‘s intent.
(c) If, under the terms of a trust that was revocable at the time of the settlor’s death, the subject of a preferred devise is sold or used to pay debts, expenses, taxes, or other obligations incident to the settlement of the settlor’s affairs, abatement must be achieved by adjustment in, or contribution from, other interests in the remaining trust property.
(d) Where applicable, the abatement of beneficiary interests in a trust is subject to IC 32-17-13-4.
As added by P.L.101-2008, SEC.8.