In the Matter of the Trust Created Under the Last Will and Testament of Marion A. Peeples, Johnson County Community Foundation as Successor Trustee of the Marion A. Peeples Foundation Charit

Jun 19 2015, 9:31 am

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE INDIANA
Daniel J. Paul ATTORNEY GENERAL
Williams Barrett & Wilkowski, LLP Gregory F. Zoeller
Greenwood, Indiana Attorney General of Indiana
Frances Barrow
Aaron T. Craft
Deputy Attorneys General
Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

In the Matter of the Trust June 19, 2015
Created Under the Last Will and Court of Appeals Case No.
Testament of Marion A. Peeples, 41A01-1412-TR-513
Deceased, Appeal from the Johnson Superior
Court
Johnson County Community The Honorable Kevin M. Barton,
Foundation as Successor Trustee Judge
of the Marion A. Peeples Trial Court Cause No. SE79-23
Foundation Charitable Trust,
Appellant-Petitioner

Bradford, Judge.

Case Summary

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[1] After Marion Peeples and his wife Eve passed away, the trust provided for in

their wills was established (“The Trust”). The Trust provided for the award of

scholarships to Indiana high school graduates, preferably from Franklin High

School, who wished to pursue post-secondary education in certain fields.

Union Bank & Trust was initially the trustee of the Trust, and, through mergers

and acquisitions, JPMorgan Chase Bank, N.A. (collectively, “the Bank”), took

over.

[2] In 2013, the Johnson County Community Foundation (“JCCF”), which had

been managing the scholarship program for the Bank since 2000, petitioned the

trial court to be appointed trustee for the Trust. The trial court granted JCCF’s

petition in an order that limited JCCF’s fee to 1.5% of trust assets per year and

required it to receive court approval before engaging the service of certain third-

parties under certain circumstances. JCCF now appeals, contending that the

trial court abused its discretion in imposing restrictions on its administration of

the Trust. The Attorney General of Indiana appears on behalf of the Trust

beneficiaries and argues that JCCF’s arguments are not ripe for appellate

review. JCCF counters that the Attorney General’s arguments were not

properly preserved. Because we conclude that (1) the Attorney General’s

arguments were properly preserved, (2) JCCF’s arguments are ripe, and (3) the

trial court did not abuse its discretion in imposing restrictions on JCCF’s

administration of the Trust, we affirm.

Facts and Procedural History
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[3] On February 28, 1962, Marion Peeples and his wife Eva Peeples each executed

a last will and testament. The wills included provisions for the establishment of

the “Marion A. Peeples and Eva S. Peeples Foundation Trust,” or the Trust.

Appellant’s App. p. 35. The Trust established separate scholarship funds for

male and female students. The female scholarship was established for Franklin

College for the benefit of graduates of any Indiana high school (preferably

Franklin Community High School) interested in pursuing nursing or dietetics

(preferably at Franklin College). The male scholarship fund was established for

Franklin Community High School for the benefit of graduates of that high

school who are seeking “training in teaching in the field of industrial arts”

(preferably at Franklin College). Appellant’s App. p. 37. The language creating

the Trust grants the trustee the power to “employ such attorneys, auditors,

accountants, or other assistants, as are, in the judgment of the Trustee,

necessary, and to pay their compensation from the Trust Property.”

Appellant’s App. p. 42. Between 2001 and 2014, $1,049,583.00 was distributed

to scholarship recipients.

[4] On July 11, 1971, Marion died, followed by Eva on October 5, 1978. On

March 29, 1979, the Bank petitioned Johnson Superior Court to docket the

Trust, which petition the trial court granted on April 2, 1979. In 2000, the Bank

approached JCCF to manage the scholarships. Until 2005, the Bank paid

JCCF $30,000.00 per year to manage the scholarship programs and $20,000.00

per year after.

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[5] On March 26, 2013, JCCF filed a petition of proposed successor trustee to

appoint successor trustee (“the Petition”) and the Bank made filings indicating

its desire to resign as trustee. At the time, the balance of the Trust was

$1,292,662.65. On May 31, 2013, the Indiana Attorney General, on behalf of

the beneficiaries of the Trust, indicated that it had no objection to the

appointment of JCCF as the successor trustee.

[6] On June 3, 2013, the trial court held a hearing on the Petition, at which no

party other than JCCF appeared and presented evidence. JCCF President Gail

Richards testified and was cross-examined by counsel for Franklin College.

Richards testified on cross-examination that JCCF had never administered a

trust before and that the fees JCCF were seeking were 1.5% of the balance of

the Trust.

[7] On October 18, 2013, the trial court issued its order accepting the Bank’s

resignation as trustee of the Trust, appointing JCCF trustee, and approving the

Bank’s accounts for 2011 and 2012. The order provides as follows:

The Court being duly advised in the premises, now
FINDS AND ORDERS as follows:
1. The above cause of action came before the Court for
hearing on the Verified Petition of Trustee to Appoint Successor
Trustee And Verified Petition Of Proposed Successor Trustee To
Appoint Successor Trustee. Testimony was presented to the
Court by Gail Richards, Director.
2. J.P. Morgan Chase Bank, N.A filed it’s [sic passim]
Trustee’s Statement of Account for 2011 and 2012. By Notice of
Opportunity To File Objection to Trustee’s Accounts the Court

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 provided all interested parties with notice and opportunity to file
objection to the Trustee’s Statement of Account for 2011 and
2012. No objections were filed.
3. By Attorney General’s Response, the Attorney
General stated that no objection was made to the Verified
Petition of Trustee to Appoint Successor Trustee And Verified
Petition Of Proposed Successor Trustee To Appoint Successor
Trustee.
4. From the evidence submitted to the Court, J.P.
Morgan Chase Bank is now administering the Trust from a trust
officer out of state. J.P. Morgan Chase Bank has submitted it’s
resignation as trustee because it deems the size of the trust
insufficient to effectively manage.
5. Request is made for the Johnson County
Community Foundation to be appointed as Successor Trustee of
the Peeples Trust. Johnson County Community Foundation has
expertise in the management of investments for charitable and
benevolent purposes as a community foundation. The Johnson
County Community Foundation has expertise in financial
management. However, the Johnson County Community
Foundation has not previously acted as trustee for a benevolent
trust.
6. From the testimony presented at [the] hearing, the
Court identifies two matters of concern: trustee fees and
identification of trust recipients.
7. As to trustee fees, it was disclosed that J.P. Morgan
Chase Bank had contracted with the Johnson County
Community Foundation to fulfil local trustee duties, including
encouraging applicants for the trust, screening applicants and
determining who should receive disbursements from the trust. A
fee was initially charged in the amount of $30,000.00 but was
subsequently reduced to $20,000.00 after J.P. Morgan Chase
Bank assumed the duty of making distributions from the trust to
the educational institutions of the selected trust recipients. J.P.
Morgan Chase Bank did not request court approval to utilize the

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 services of the Johnson County Community Foundation in
fulfilling it’s duties as Trustee. Inasmuch as J.P. Morgan Chase
Bank was authorized to charge for it’s services a[t] it’s usual and
customary rates for trust services, it was contemplated that the
fees assessed were for all aspects in serving as trustee. The
accountings filed by J.P. Morgan Chase Bank show that the
effective annual charge by J.P. Morgan Chase Bank in serving as
trustee was 1.2% of the trust assets. After including the
additional amount charged by the Johnson County Community
Foundation, the effective annual charge for trustee services rises
to 2.7% of the trust assets. The trustee fees constitute
approximately 64% of the amount disbursed to the trust
recipients. The court finds that the fees charged in relation to the
amounts disbursed to be excessive.
However, the Court is also mindful that the banking
landscape has changed considerably from the time when the
Peeples Trust was created. The locally based trust company has
largely been relegated to history.
8. A concern was also noted regarding identification of
students to apply for disbursements from the trust. Ms. Richards
testified that the Foundation had placed notice of opportunity to
apply for benefits under the trust with other community
foundations. The trust states a clear preference to benefit
students attending Franklin Community High School. The
Court makes clear that the terms of the trust need to be closely
followed.
9. The Court determines as follows:
A. The resignation of J.P. Morgan Chase Bank, N.A.
as the Trustee of the Marion A. Peeples and Eva S. Peeples Trust
is granted.
B. The petition for appointment of the Johnson
County Community Foundation as successor trustee of the
Marion A. Peeples and Eva S. Peeples Trust is granted subject to
the terms herein set forth.

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 C. The fees charged by J.P. Morgan Chase Bank,
N.A., including the amount paid to the Johnson County
Community Foundation, for 2011 and 2012 are reserved for
consideration. J.P. Morgan Chase Bank, N.A. shall tender
within forty-five (45) days of the date of this Order, the rate
structure used by J.P. Morgan Chase Bank, N.A. in assessing
trustee fees and the authority for incurring additional charges for
trustee duties above the rate structure either by the terms of trust
or by statute. J.P. Morgan Chase Bank, N.A. may submit to the
Court the rate structure for other similar trust institutions in
support of the fee petition.
D. The fees charged by Johnson County Community
Foundation in serving as Trustee shall be limited to one and one-
half percent (1 ½%) of the Trust assets annually, although
payment for services may be made on a quarterly or monthly
basis. Any request for payment of fees in addition to such
amount shall be supported by time records that support the
additional fee or financial report regarding administrative
expenses in administering assets.
E. If any third party is to be engage[d] to provide
services to the Peeples Trust that is not included within the said
one and one-half percent (1 ½%) annual administrative fee, prior
Court approval shall be required before the third party is engaged
to provided [sic] services. The Johnson County Community
[Foundation is specifically directed to make no disbursement
from the Peeples Trust for such third party] services without
express court authorization.
F. The Johnson County Community Foundation shall
include in it’s annual report as Trustee the efforts made in
seeming applicants for trust benefits and the secondary school of
the trust recipient in sufficient detail so that the court may
determine compliance with the trust intention.
G. Except as reserved as to fees as hereinabove set
forth, the Trustees Statement of Account for 2011 and 2012 is
approved.

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 Appellant’s App. pp. 13-15.

[8] On November 27, 2013, the Bank filed a supplemental brief addressing the fee

issue. On April 3, 2014, the trial court issued an order approving the Bank’s

fees, in which it also ordered that “[t]he scholarships awarded and the expense

of administration allocated to income shall not exceed the income of the trust.”

Appellant’s App. p. 17.

[9] On May 5, 2014, JCCF filed a motion to correct error. On October 23, 2014,

the trial court held a hearing on JCCF’s motion to correct error. The Indiana

Attorney General appeared at the hearing. On November 6, 2014, the trial

court granted JCCF’s motion to correct error in part and denied it in part. The

order on JCCF’s motion to correct error provides as follows:

The above cause of action came before the Court for
hearing on the 23rd day of October, 2014 on the Motion To
Correct Error filed by Successor Trustee, Johnson County
Community Foundation, hereinafter referred to as JCCF, on
May 5, 2014. Johnson County Community Foundation
appeared by it’s [sic passim] President and Chief Executive
Officer, Gail Richards, and by counsel, William Bennett, Esq.
and Daniel Paul, Esq. Indiana Attorney General appeared by
Deputy Attorney General Justin Hazlett, Esq. Ms. Richards
sworn. Evidence is presented.
And the Court, being duly advised in the premises, now
FINDS as follows:
1. The Motion To Correct Error addresses certain
issues as to the Court’s Order Accepting Resignation Of Trustee
And Appointing Successor Trustee And Order Regarding Fees
And Approval Of Trustee’s Account For 2011 And 2012 dated
October 18, 2013, to-wit:
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 A. Limitation on fees charged by JCCF;
B. Express authorization required before contracting
with third parties for services.
2. The Motion To Correct Error addresses an issue in
the Court’s Order Regarding Trustee’s Fees For 2011 And 2012
And Trust Administration dated April 3, 2014, to-wit:
A. Any limitation on scholarships awarded and expenses
of administration to income.
3. At hearing, JCCF requested that the Court rescind
the portion of the Order of October 18, 2013 that limits the “fees
charged by Johnson County Community Foundation in serving
as Trustee shall be limited to one and one-half percent (1 ½%) of
the Trust assets annually, although payment for services may be
made on a quarterly or monthly basis.” JCCF asserted that the
basis of the request is that the fee schedule of JCCF for the
administration of trusts was two percent (2%) of trust assets. Ms.
Richards testified that the fee schedule for administration of
trusts was set by the JCCF Board on March 21, 2012.
4. At hearing conducted on June 3, 2013, the
following testimony was presented:
Question by Mr. Huddleston: So what will be your fees if
the Judge approves you as Trustee?
Answer by Ms. Richards: Well according to managing a
trust - our internal fees right now are one and a half
percent of the balance of the fund taken out once a month
so whatever the balance of the fund is on a monthly basis
it would be one and a half percent.
…
Question by Mr. Huddleston: So the one and a half is
regardless of the amount of time you put in, you
automatically bill this trust one and a half percent?
Answer by Ms. Richards: Just like we do every other fund
that we manage.

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 Question by Mr. Huddleston: So the answer is yes?
Answer by Ms. Richards: Yes.”
5. At [the] hearing on June 3, 2013, no evidence was
presented that JCCF would charge a different fee for the
administration of trusts, i.e. 2% of the fund balance, as opposed
to the fee charged to administer other funds administered by
JCCF, i.e. 1 1/2% of the fund balance. The Court relied upon
the testimony provided by Ms. Richards in appointing JCCF as
Successor Trustee. Ms. Richards’ testimony formed the basis for
paragraph 9(D) of the Court’s Order Accepting Resignation Of
Trustee And Appointing Successor Trustee And Order Regarding
Fees And Approval Of Trustee’s Account For 2011 And 2012
dated October 18, 2013.
6. Ms. Richards acknowledged that a cost analysis had
not been performed to determine the cost to JCCF to administer
the Trust. The time required to administer the trust was
unknown. On November 27, 2013, J.P. Morgan Chase filed it’s
Response To The Court’s Order of October 18, 2013. The fee
schedule provided by J.P. Morgan Chase resulted in a Trustee’s
compensation of 1.52% of Trust assets based upon the principal
balance as of December 31, 2012. Fee schedules were also
submitted from other trust companies. The fees schedules were
all slightly less than the fee of J.P. Morgan Chase although the
fees were close to that charged by J.P. Morgan Chase.
7. The Court does not find error in it’s Order
Accepting Resignation Of Trustee And Appointing Successor
Trustee And Order Regarding Fees And Approval Of Trustee’s
Account For 2011 and 2012 dated October 18,2013 in setting the
Trustee’s fee at one and a half percent (1 ½%) of the asset
balance annually. The Court accepted the fee quoted by JCCF
when it sought appointment as Successor Trustee. The Court
does not amend its Order Accepting Resignation Of Trustee And
Appointing Successor Trustee And Order Regarding Fees And
Approval Of Trustee’s Account For 2011 And 2012 dated
October 18, 2013 as to the fees authorized to be paid to the

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 Successor Trustee. If JCCF now finds that it is not able to
administer the Marion And Eva Peeples Trust based upon the
testimony provided at hearing on June 3, 2013, JCCF may resign
as Successor Trustee.
8. The Court turns to the second basis of the Motion to
Correct Error. JCCF seeks to be relieved of the requirement that
JCCF seek Court approval for fees paid to third parties.
9. The Court’s restriction on fees arose from the
amount paid to J.P. Morgan Chase and JCCF for trust
administration. The Court determined that the services provided
by J.P. Morgan Chase and JCCF amounted to trust
administration. Based upon the asset balance as of December 31,
2012, the amount paid to J.P. Morgan Chase and JCCF for trust
administration was in the amount of 3.1% of trust assets. This
amount was determined to be higher than trust fees of other
corporate fiduciaries for trust management especially when a cost
analysis had not been performed to determine the cost of
providing services. Significantly, JCCF likewise viewed the
amounts charged by J.P. Morgan Chase and JCCF as being
duplicitous [sic]: Board Member Bill Kiesel testified at [the]
hearing on June 3, 2013: “It came to the attention of the Board
that we were doubling up fees by having a trustee who really
didn’t want to be trustee and those were Robin’s words - not
mine. It didn’t fit the parameters of what Chase wanted to do
and Robin and I did have conversations about other alternatives,
but it seemed to make sense that because we don’t want to pay
double fees to another trustee that the foundation be allowed to
be the trustee and eliminate those fees and use the money saved
for scholarships.”
10. Ms. Richards testified that JCCF might require
services of an attorney and tax preparer and that fees on
investments would be incurred. Ms. Richards clarified that fees
on investments consisted of transactional fees as opposed to
investment management.

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 11. Paragraph 9(E) of the Court’s Order Accepting
Resignation Of Trustee And Appointing Successor Trustee And
Order Regarding Fees And Approval Of Trustee’s Account For
2011 And 2012 dated October 18, 2013 provided:
“E. If any third party is to be engage to provide services to
the Peeples Trust that is not included within the said one and
one-half percent (1 ½%) annual administrative fee, prior Court
approval shall be required before the third party is engaged to
provided services. The Johnson County Community Foundation
is specifically directed to make no disbursement from the Peeples
Trust for such third party services without express court
authorization.”
12. Normal transactional fees to third party brokerage
firms was not contemplated within the provisions of paragraph
9(E) of the Court’s Order Accepting Resignation Of Trustee And
Appointing Successor Trustee And Order Regarding Fees And
Approval Of Trustee’s Account For 201 l And 2012 dated
October 18, 2013. Consequently, normal transactional fees to
third party brokerage firms are excluded from paragraph 9(E) of
the Court’s Order Accepting Resignation Of Trustee And
Appointing Successor Trustee And Order Regarding Fees And
Approval Of Trustee’s Account For 2011 And 2012 dated
October 18, 2013.
13. Fees to tax preparers are required to comply with
federal and state requirements. Tax preparation fees charged at
the customary hourly rate by third party tax preparers should
likewise be excluded from the provisions of paragraph 9(E) of the
Court’s Order Accepting Resignation Of Trustee And
Appointing Successor Trustee And Order Regarding Fees And
Approval Of Trustee’s Account For 2011 And 2012 dated
October 18, 2013.
14. Attorney fees provided to a fiduciary are
customarily subject to oversight. See Indiana Code 29-1-10-13,
Indiana Code 29-3-9-9. The Court does not find a reason to
exclude attorneys from paragraph 9(E) of the Court’s Order

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 Accepting Resignation Of Trustee And Appointing Successor
Trustee And Order Regarding Fees And Approval Of Trustee’s
Account For 2011 And 2012 dated October 18, 2013.
15. Based upon a need for greater oversight arising from
past duplicitous charges for trustee services, the Court otherwise
finds that paragraph 9(E) of the Court’s Order Accepting
Resignation Of Trustee And Appointing Successor Trustee And
Order Regarding Fees And Approval Of Trustee’s Account For
2011 And 2012 dated October 18, 2013 is appropriate subject to
the modification and clarification set forth in paragraphs twelve
and thirteen above. JCCF does not provide evidence of the need
for other services or present evidence that paragraph 9(E) will
hinder the administration of the trust.
16. The Court next turns to the Paragraph 7 of the
Order Regarding Trustee’s Fees For 2011 and 2012 And Trust
Administration of April 3, 2014, which provides: “7. The
scholarships awarded and the expense of administration
allocated to income shall not exceed the income of the trust. “
17. JCCF asserts that paragraph 7 of the Order of April
3, 2014 restricts the discretion granted to the Trustee to utilize
principal for trust purposes under the terms of the Peeples Trust.
In reviewing JCCF’s Hearing Brief as well as the provisions cited
by JCCF of the Last Will and Testament of Marion Peeples, the
Court concurs.
18. Accordingly, JCCF’s Motion To Correct Errors as
to Paragraph 7 of the Order Regarding Trustee’s Fees For 201 l
and 2012 And Trust Administration of April 3, 2014 is granted.
Paragraph 7 of the Order Regarding Trustee’s Fees For 2011 and
2012 And Trust Administration of April 3, 2014 is vacated.
19. The Court does not identify any other basis of the
Motion to Correct Errors either by the terms of the Motion To
Correct Errors or by Hearing Brief. Accordingly, except as
specifically granted, the
Motion to Correct Errors is denied.

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 IT IS THEREFORE ORDERED BY THE COURT AS
FOLLOWS:
A. Motion To Correct Error as to the restriction on
Trustee Fees charged by Johnson County Community
Foundation as Successor Trustee under Paragraph 9(D) of the
Order Accepting Resignation Of Trustee And Appointing
Successor Trustee And Order Regarding Fees And Approval Of
Trustee’s Account For 2011 And 2012 dated October 18, 2013 is
denied;
B. Motion to Correct Error as to Paragraph (E) of the
Court’s Order Accepting Resignation Of Trustee And
Appointing Successor Trustee And Order Regarding Fees And
Approval Of Trustee’s Account For 2011 And 2012 dated
October 18, 2013 is granted and denied as follows:
i) Normal transactional fees to third party brokerage
firms are excluded from paragraph 9(E);
ii) Tax preparation fees charged at the customary
hourly rate by third party tax preparers are excluded from
paragraph 9(E);
iii). Except as provided under paragraph i and ii,
Paragraph 9(E) will remain unaltered;
C. Motion to Correct Error as to Paragraph 7 of the
Order Regarding Trustee’s Fees For 2011 and 2012 And Trust
Administration of April 3, 2014 is granted. Paragraph 7 of the
Order Regarding Trustee’s Fees For 2011 and 2012 And Trust
Administration of April 3, 2014 is vacated;
D. Except as herein granted, the Motion to Correct
Error is denied.
Appellant’s App. pp. 18-23.

[10] JCCF contends on appeal that the trial court erred in restricting its authority to

employ attorneys and other third parties and in capping its annual fee at 1.5%

of the Trust’s assets per year. The Attorney General argues that none of
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 JCCF’s arguments are ripe for appellate review and that the trial court did not

abuse its discretion in appointing JCCF trustee subject to limitations. Finally,

JCCF argues in its reply brief that the Attorney General’s arguments were not

properly advanced in the trial court and are therefore waived for appellate

review. We address the arguments presented in more or less reverse order.

Discussion and Decision
I. Whether the Attorney General’s
Arguments Are Waived
[11] JCCF contends that the Attorney General’s arguments are waived for appellate

review. JCCF notes that the Attorney General did not object to the Petition

and only became involved in the litigation following JCCF’s motion to correct

error. Under the circumstances of this case, we find the Attorney General’s

actions sufficient to preserve its arguments for appellate review. The purpose of

the contemporaneous objection rule is to promote a fair trial by preventing a

party from sitting idly by and appearing to assent to an offer of evidence or

ruling by the court only to cry foul when the outcome goes against him. Purifoy

v. State, 821 N.E.2d 409, 412 (Ind. Ct. App. 2005), trans. denied (citation

omitted). That purpose would not be served in this case by application of the

waiver rule.

[12] We see no reason the Attorney General should have been required to object to

the Petition, as it requested nothing that is inconsistent with the positions now

taken by the Attorney General. The Petition itself only requests substitution of

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 JCCF for the Bank as trustee—which the Attorney General has never

opposed—and mentions nothing regarding fees, payments to third parties, or

using Trust principal for scholarships or expenses. Nor do we believe that the

Attorney General should have been required to object to the trial court’s order

on the Petition, as it contained no provisions to which the Attorney objected.

On the other hand, the Attorney General did oppose JCCF’s motion to correct

error, in which JCCF urged the trial court for the first time to enter rulings to

which the Attorney General objected. Put another way, the Attorney General

became involved at the precisely the point where it became clear that JCCF was

taking a position in opposition to the Attorney General’s position. We

conclude that the Attorney General adequately preserved its arguments for

appellate review.

II. Whether JCCF’s Arguments Are Ripe
[13] The Attorney General contends that JCCF’s arguments are not ripe because

there is no evidence that JCCF will ever need more than 1.5% of the Trust

assets per year or engage the services of third parties in order to adequately

administer it. “Ripeness relates to the degree to which the defined issues in a

case are based on actual facts rather than on abstract possibilities, and are

capable of being adjudicated on an adequately developed record.” Ind. Dep’t of

Envtl. Mgmt. v. Chem. Waste Mgmt., Inc., 643 N.E.2d 331, 336 (Ind. 1994).

“BLACK’S LAW DICTIONARY defines ripeness as the ‘circumstance

existing when a case has reached, but has not passed, the point when the facts

have developed sufficiently to permit an intelligent and useful decision to be

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 made.’” Estate of Hagerman v. Ind. Dep’t of State Revenue, 771 N.E.2d 120, 128

(Ind. T.C. 2002) (quoting BLACK’S LAW DICTIONARY 1328 (7th ed. 1999)).

[14] We agree with JCCF that its claims are ripe. JCCF’s fee for serving as trustee

moving forward has been capped at 1.5% and JCCF must obtain court

permission before engaging the services of most third parties. JCCF’s decision-

making as trustee will be affected by the limit, even if it does not go to the trial

court seeking more money. Also, as things stand, before considering engaging

the services of a third party, JCCF must weigh whether it is worth the

additional trouble and expense of petitioning the trial court for permission to do

so. We consider these restrictions to be more than abstract possibilities when

viewed from JCCF’s perspective. We conclude that the facts of this case have

developed sufficiently to permit an intelligent and useful decision.

III. Whether the Trial Court Abused its Discretion in
Imposing Restrictions on JCCF
[15] JCCF contends that the restrictions placed on its administration of the Trust are

contrary to the express language of the Trust and the Indiana Trust Code. The

Attorney General counters that the restrictions, even those that alter the terms

of the Trust, are within the trial court’s equitable power over the administration

of trusts.

In Indiana, probate courts possess general equity powers. Powell
v. North (1859), 3 Ind. 392. Those powers include the authority
to supervise and control the administration of trusts. See State ex
rel. Anderson-Madison County Hospital Development Corp. v. Superior
Court of Madison County (1964), 245 Ind. 371, 199 N.E.2d 88;
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 Messner v. DeMotte (1948), 119 Ind. App. 273, 82 N.E.2d 900,
trans. denied; Hulet v. Crawfordsville Trust Co. (1946), 117 Ind. App.
125, 69 N.E.2d 823; Newlin v. Newlin (1944), 114 Ind. App. 574,
52 N.E.2d 503, trans. denied. The Indiana Trust Code does not
pretend to limit the equity power of probate courts except as it
specifically provides. See IND. CODE 30-4-3-30.
Matter of Trust of Loeb, 492 N.E.2d 40, 43 (Ind. Ct. App. 1986).

[16] Indiana Code section 30-4-3-24.4 specifically provides for the modification of a

trust if it will further the purposes of the trust:

(a) The court may modify the administrative or dispositive terms
of a trust if, because of circumstances not anticipated by the
settlor, modification or termination will further the purposes of
the trust. To the extent practicable, the modification must be
made in accordance with the settlor’s probable intention.
(b) The court may modify the administrative terms of a trust or
terminate the trust if:
(1) the purpose of the trust has been fulfilled; or
(2) continuation of the trust on the trust’s existing terms
would:
(A) be illegal, impossible, impracticable, or wasteful; or
(B) impair the trust’s administration.
So, the question is not whether the trial court’s restrictions violated or altered

the terms of the Trust, but whether those restrictions were within its equitable

power to administer the Trust.

A. Limiting Trustee Fee to 1.5% of Trust Assets
[17] The Trust is silent on the question of trustee compensation. Indiana Code

section 30-4-5-16(a) provides that, as a general rule, “the trustee is entitled to

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 reasonable compensation from the trust estate for acting as trustee.” The trial

court specifically found that the total fees received by the Bank and JCCF had

been unreasonably high at approximately 2.7% of the trust assets (or 64% of the

amount distributed to beneficiaries) and then imposed the 1.5% limitation.

Under the circumstances of this case, we conclude that the record supports the

trial court’s decision regarding trustee fees.

[18] JCCF’s own evidence supports a conclusion that a 1.5% fee is reasonable. At

the hearing on June 3, 2013, Richards testified that 1.5% was the fee JCCF was

seeking as trustee. (Tr. 16). Although Richards testified on October 23, 2014,

that JCCF now wanted an annual fee of 2% of trust assets, she admitted on

cross-examination that (1) she was unaware of any justification for the

additional 0.5%, (2) 2% is “just the policy that we have[,]” and (3) requesting

additional funds from the trial court, if needed, might be workable. Tr. p. 62.

It is also worth noting that 1.5% is a “soft” cap, with the trial court’s order

allowing for the payment of funds beyond that if JCCF can justify it. JCCF

provided ample evidence from which the trial court could conclude that 1.5% of

trust assets was a reasonable yearly fee.

[19] Limiting JCCF’s fee also seems justified by changing circumstances, which

threaten to prevent the Trust from effectively fulfilling its purpose. In 2001, the

Trust distributed $139,000.00 to students. This number has steadily declined

since then, and by 2014 the distribution had shrunk to $41,000.00. In March of

2013, Trust assets totaled $1,292,662.65, 2% of which would be almost

$26,000.00, or approximately 63% of the 2014 distribution to beneficiaries. The

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 obvious purpose of the Trust is to award scholarships to students in dietetics,

nursing, and industrial arts, a purpose that would not be well-served if fees

exceeded distributions to beneficiaries, a circumstance that seems a distinct

possibility in the relatively near future, and even more likely if JCCF is able to

charge a higher fee. We conclude that the trial court did not abuse its discretion

in pushing JCCF to find ways to streamline administration of the Trust.

B. Payments to Third Parties
[20] As previously mentioned, the language creating the Trust grants the trustee the

power to “employ such attorneys, auditors, accountants, or other assistants, as

are, in the judgment of the Trustee, necessary, and to pay their compensation

from the Trust Property.” Appellant’s App. p. 42. It is undisputed that the trial

court modified this, ruling that JCCF must seek prior authorization for third-

party services that were not covered by its 1.5% fee, with the exception of

brokerage fees and tax preparation fees. Both parties seem to agree that this

issue primarily concerns the question of future attorney’s fees. The award of

trustee’s attorney’s fees is “‘in the exercise of a sound discretion, and in the

absence of an affirmative showing of error or abuse of discretion we must affirm

[the trial court’s] order.’” Malachowski v. Bank One, Indpls., N.A., 682 N.E.2d

530, 533 (Ind. 1997) (quoting Zaring v. Zaring, 219 Ind. 514, 523, 39 N.E.2d

734, 737 (1942)).

[21] In addition to the reasons justifying the fee limitation, JCCF was unable to

identify any specific anticipated need for legal representation, with Richards

noting that it was a possibility but that “I’m not sure what to tell you those
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 expenses will be.” Tr. p. 68. It should also be noted that, as with the soft cap

on fees, the trial court’s order specifically provided for Trust funds to be made

available for third-party services should JCCF establish a need. Given the

absence of evidence of any specific need for the services of a third-party

attorney, we cannot say that the trial court abused its discretion in this regard.

Conclusion
[22] We conclude that the Attorney General properly preserved its issue for

appellate review. We further conclude that JCCF’s arguments are ripe for

appellate consideration. Finally, we conclude that the trial court did not abuse

its discretion in imposing certain restrictions on JCCF’s administration of the

Trust. Consequently, we affirm the judgment of the trial court in all respects.

[23] The judgment of the trial court is affirmed.

Vaidik, C.J., and Kirsch, J., concur.

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