Ind. Code ch. 30-4-8

in effect

Ind. Code § 30-4-8-1 Application

Sec. 1. (a) Subject to the limitations set forth in subsection (b), this chapter applies to: (1) qualified dispositions to legacy trusts; and (2) dispositions by transferors who are trustees; that are made after June 30, 2019. (b) This chapter does not apply to: (1) any assets that are listed on an application or financial statement completed by the transferor and which is submitted to a lender in connection with a request to obtain or maintain credit from the lender; or (2) any assets of a legacy trust that are listed on an application or financial statement completed on behalf of the legacy trust and which is submitted to a lender in connection with a request to obtain or maintain credit from the lender on behalf of the legacy trust. In the event that assets described in subsection (b)(1) are later transferred to a legacy trust and a default occurs under the loan or extension of credit, either before or after the transfer or disposition under the legacy trust, the lender shall be entitled to proceed against any assets listed on the applications or financial statements which were submitted in connection with the loan, or any modifications, amendments, or renewals of the loan. Nothing in this chapter shall prohibit such action. A change in the character, form, or ownership of the assets described in subsection (b)(1) shall in no way make subsection (b)(1) inapplicable. This subsection shall apply only to the lender that extended credit based on the application or financial statement submitted to the lender and the indebtedness or any portion of the indebtedness owed to the lender remains unpaid. As added by P.L.221-2019, SEC.9. Amended by P.L.56-2020, SEC.12.

Ind. Code § 30-4-8-2 Definitions

Sec. 2. Unless the context requires otherwise, the following definitions apply throughout this chapter: (1) "Claim" means a right to payment, regardless of whether the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, immature, disputed, undisputed, legal, equitable, secured, or unsecured. (2) "Creditor" means a person who has a claim against the transferor. (3) "Debt" means liability on a claim. (4) "Disposition" means a transfer, conveyance, or assignment of property, including a change in the legal ownership of property that occurs when a trustee is substituted for another trustee or when at least one (1) trustee is added. The term also includes the exercise of a power that causes a transfer of property to a trustee. However, the term does not include the release or relinquishment of an interest in property that, until the release or relinquishment, was the subject of a qualified disposition. (5) "Investment decision" means the retention, purchase, sale, exchange, tender, or other transaction affecting the ownership of or rights in an investment. (6) "Legacy trust" means an irrevocable trust established under section 3 of this chapter. (7) "Lender" means a company or entity that extends credit, including but not limited to a financial institution (as defined by IC 28-1-1-3(1)), a company or entity that extends credit under IC 37-1 or IC 37-2, or the successors and assigns of the company or entity. (8) "Person" means an individual at least eighteen (18) years of age, a corporation, a trust, a limited liability company, a limited liability partnership, a partnership, a governmental entity, the state, or a political subdivision of the state. (9) "Property" means real property, personal property, or an interest in real or personal property. (10) "Qualified affidavit" means a sworn affidavit executed under section 5 of this chapter. (11) "Qualified disposition" means a disposition by a transferor to a legacy trust. (12) "Qualified trustee" means a person qualified to serve as the trustee of a legacy trust under section 6 of this chapter. (13) "Transferor" means a person who as: (A) an owner of property; (B) a holder of a power of appointment that authorizes the holder to appoint in favor of the holder, the holder's creditors, the holder's estate, or the creditors of the holder's estate; or (C) a trustee; directly or indirectly makes a disposition or causes a disposition to be made. (14) "Trust director" means a person given authority by the terms of a legacy trust to direct, consent to, or disapprove actual or proposed investment decisions, distribution decisions, or other decisions related to property in a legacy trust. As added by P.L.221-2019, SEC.9. Amended by P.L.115-2026, SEC.71.

Ind. Code § 30-4-8-3 Establishment

Sec. 3. A legacy trust is established by: (1) designating in writing in the trust that the trust is a legacy trust established under this chapter; (2) including the terms required by section 4 of this chapter in the legacy trust; and (3) delivering a qualified affidavit containing the statements required by section 5 of this chapter to the qualified trustee. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-4 Requirements

Sec. 4. A legacy trust must do the following: (1) Provide for the appointment of at least one (1) qualified trustee for the property that is the subject of a qualified disposition. (2) Expressly incorporate Indiana law to govern the validity, construction, and administration of the trust. (3) Be irrevocable. (4) Provide that the interests of the transferor or beneficiary in the trust property or the income from the trust property may not voluntarily or involuntarily be transferred, assigned, pledged, or mortgaged before the qualified trustee actually distributes the property or income to the beneficiary. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-5 Qualified affidavits

Sec. 5. (a) A qualified affidavit must be signed under the penalties of perjury, and state the following: (1) That the transferor has full right, title, and authority to transfer the property to the legacy trust. (2) That the transfer of the property to the legacy trust will not render the transferor insolvent. (3) That the transferor does not intend to defraud a creditor by transferring the property to the legacy trust. (4) That there are no pending or threatened court actions against the transferor other than the court actions identified by the transferor and attached to the qualified affidavit. (5) That the transferor is not involved in any administrative proceedings other than the administrative proceedings identified by the transferor and attached to the qualified affidavit. (6) That the transferor does not contemplate filing for relief under the federal bankruptcy code. (7) That the property transferred to the legacy trust is not derived from unlawful activities. (b) Except as provided in subsection (c), a qualified affidavit must be signed by the transferor. (c) In the case of a disposition by a transferor who is a trustee, the qualified affidavit must be signed by the transferor who made the original disposition to the trustee. A qualified affidavit signed under this subsection must state the facts as of the time of the original disposition. (d) If a transferor is a married individual at the time a qualified affidavit is signed, the transferor shall provide a copy of the qualified affidavit to the transferor's spouse. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-6 Qualified trustees; duties

Sec. 6. (a) A person may serve as a qualified trustee of a legacy trust if the person is not the transferor and satisfies either of the following requirements: (1) In the case of an individual, the individual is a resident of Indiana. (2) In all other cases, the person is: (A) authorized by Indiana law to act as a trustee; and (B) subject to the supervision of: (i) the department of financial institutions; or (ii) the federal Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, or any successor to these agencies. (b) A qualified trustee shall do the following: (1) Maintain or arrange for providing custody of the property subject to the qualified disposition in Indiana. (2) Maintain complete and accurate records for the legacy trust on an exclusive or nonexclusive basis. (3) Prepare or arrange for the preparation of all required tax returns for the legacy trust. (4) Materially participate in the administration of the legacy trust. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-7 Prohibited causes of action; effect of spendthrift provision

Sec. 7. (a) Except as provided in section 8 of this chapter, no cause of action of any kind, including a cause of action to enforce a judgment, may be brought for: (1) an attachment or other provisional remedy against property that is the subject of a qualified disposition to a legacy trust; or (2) the avoidance of a qualified disposition to a legacy trust. The protections provided to a qualified disposition by this subsection apply notwithstanding any law to the contrary set forth outside this chapter. (b) If a court declines to apply Indiana law in determining the effect of a spendthrift provision in a legacy trust in an action brought against a legacy trust, the trustee of the legacy trust shall immediately resign and, without further order of any court, cease to be the trustee of the legacy trust. When a trustee resigns under this section, the trustee has the power only to convey the trust property to a successor trustee appointed under this section. A successor trustee shall succeed the resigning trustee in accordance with the terms of the legacy trust. If the trust does not provide for a successor trustee and the trust would otherwise be without a trustee, any beneficiary of the trust may petition an Indiana court to appoint a successor trustee. The Indiana court receiving the petition shall appoint a successor trustee to serve in accordance with the terms and conditions that the court determines are consistent with the purposes of the trust and this chapter. (c) A legacy trust and its property are protected under this section regardless of whether or not the transferor: (1) serves as an investment adviser under section 12 of this chapter; or (2) retains a power described in section 13 of this chapter. (d) To the maximum extent permitted by the United States Constitution and the Indiana Constitution, a court of this state shall exercise jurisdiction over a legacy trust or a qualified disposition and shall adjudicate a case or controversy brought before the court regarding, arising out of, or related to a legacy trust or a qualified disposition if that case or controversy is otherwise within the subject matter jurisdiction of the court. Subject to the United States Constitution and the Indiana Constitution, a court of this state shall not dismiss or otherwise decline to adjudicate a case or controversy described in this subsection on the grounds that a court of another jurisdiction has acquired or may acquire proper jurisdiction over, or may provide proper venue for, the case or controversy or the parties to the case or controversy. Nothing in this subsection shall be construed to do either of the following: (1) Prohibit a transfer or other reassignment of a case or controversy from one court of this state to another court of this state. (2) Expand or limit the subject matter jurisdiction of a court of this state. As added by P.L.221-2019, SEC.9. Amended by P.L.231-2019, SEC.29.

Ind. Code § 30-4-8-8 Prohibited claims against property subject of a qualified disposition; exceptions; extinguishing a claim

Sec. 8. (a) Except as provided in subsection (e), a claim against property that is the subject of a qualified disposition to a legacy trust is barred by section 7 of this chapter unless the claim is one (1) of the following: (1) Except as provided in subsection (b), an action brought in Indiana under the Uniform Fraudulent Transfer Act (IC 32-18-2) in which the requirements for recovery under the act are met by clear and convincing evidence. (2) An action to enforce the child support obligations of the transferor under a judgment or court order. (3) A court judgment or order for the division of property in a dissolution of the transferor's marriage or a legal separation between the transferor and the transferor's spouse, if the transferor's qualified distribution to the legacy trust was made: (A) after the date of the transferor's marriage that is subject to the dissolution or legal separation; or (B) within thirty (30) days before the date of the transferor's marriage that is subject to the dissolution or legal separation unless the transferor provided written notice of the qualified disposition to the other party to the marriage at least three (3) days before making the qualified disposition. (b) A claim brought under an action described in subsection (a)(1) is extinguished unless: (1) the creditor's claim arose before the qualified disposition to a legacy trust was made and the action is brought not later than the later of: (A) two (2) years after the transfer was made; or (B) six (6) months after the transfer: (i) was recorded or made a public record; or (ii) if not recorded or made a public record, was discovered or could have reasonably been discovered by the creditor; or (2) notwithstanding IC 32-18-2-19, the creditor's claim arose concurrent with or after the qualified disposition and the action is brought not more than two (2) years after the date of the qualified disposition. (c) A qualified disposition made by a transferor who is a trustee is considered for purposes of this chapter to have been made on the date that the property that is subject to the qualified disposition was originally transferred in trust to the trustee or any predecessor trustee and the condition set forth in section 4(3) of this chapter is satisfied. (d) If more than one (1) qualified disposition is made by means of the same legacy trust: (1) the making of a subsequent qualified disposition is disregarded when determining whether a creditor's claim with respect to a prior qualified disposition is extinguished under subsection (b); and (2) any distribution to a beneficiary is considered to have been made from the latest qualified disposition. (e) If the state of Indiana is a creditor of a transferor, then notwithstanding subsection (a)(1) and subsection (b), the state of Indiana may bring an action against a qualified trustee to assert a claim against or to recover property that is the subject of a qualified disposition by proceeding under the Indiana Uniform Fraudulent Transfer Act, subject to the standard of evidence in IC 32-18-2-14 and IC 32-18-2-15, and the limitation periods in IC 32-18-2-19. As added by P.L.221-2019, SEC.9. Amended by P.L.231-2019, SEC.30; P.L.56-2020, SEC.13.

Ind. Code § 30-4-8-9 Creditor's claims

Sec. 9. (a) If a creditor's claim is allowed under section 8 of this chapter, the transferor's qualified disposition to a legacy trust is subject to the claim only to the extent necessary to satisfy the transferor's debt to the creditor making the allowed claim. (b) In the event the trustee participates in litigation brought by a lender to enforce its rights under section 1(b) of this chapter, the trustee may recover the fees and costs incurred in such litigation from the trust only after the lender has been paid in full. (c) If a creditor's claim is allowed under section 8 of this chapter and the creditor has not sought to enforce its rights under section 1(b) of this chapter, the claim is limited as follows: (1) If the court is satisfied that a qualified trustee has not acted in bad faith in accepting or administering the property that is the subject of the qualified disposition: (A) the qualified trustee has a first and paramount lien against the property that is the subject of the qualified disposition in an amount equal to the entire cost, including attorney's fees, properly incurred by the qualified trustee in the defense of the action or proceedings filed by the creditor; (B) the creditor's claim shall be allowed subject to the proper fees, costs, preexisting rights, claims, and interests of the qualified trustee and of any predecessor qualified trustee that has not acted in bad faith; and (C) it is presumed that the qualified trustee did not act in bad faith merely by accepting the property that is the subject of the qualified disposition. (2) If the court is satisfied that a beneficiary of a legacy trust has not acted in bad faith, and the distribution was made to the beneficiary before the creditor made the trustee aware of its claim or commenced an action to enforce its claim, the creditor's claim is subject to the right of the beneficiary to retain any distribution made upon the exercise of a trust power or the discretion vested in the qualified trustee that was properly exercised before the trustee was made aware of the claim or an action was commenced to enforce the claim. As added by P.L.221-2019, SEC.9. Amended by P.L.231-2019, SEC.31.

Ind. Code § 30-4-8-10 Spendthrift provisions

Sec. 10. A spendthrift provision described in section 4(4) of this chapter is considered a restriction on the transfer of the transferor's beneficial interest in the trust that is enforceable under applicable nonbankruptcy law within the meaning of Section 541(c)(2) of the federal Bankruptcy Code (11 U.S.C. 541(c)(2)) or any successor provision of the federal Bankruptcy Code. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-11 Transferor's rights and authority

Sec. 11. Except as permitted by the terms of a legacy trust and by sections 12 and 13 of this chapter, the transferor may not have any rights or authority with respect to the principal or income of the legacy trust. An agreement or understanding purporting to grant or permit the retention of any greater rights or authority is void. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-12 Transferor's service as an investment advisor

Sec. 12. A transferor who makes a qualified disposition may also serve as an investment adviser to the trust. However, the transferor may not serve as a trust director to a legacy trust except with respect to the retention of a veto right permitted by section 13(a)(1) of this chapter. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-13 Revocability

Sec. 13. (a) A legacy trust is not considered revocable because of the inclusion of one (1) or more of the following: (1) A transferor's power to veto a distribution from the trust. (2) A power of appointment (other than the power to appoint to the transferor, the transferor's creditors, the transferor's estate, or the creditors of the transferor's estate) that may be exercised by will or other written instrument of the transferor that is effective only upon the transferor's death. (3) The transferor's potential or actual receipt of income or principal, including a right to income retained in the trust. (4) The transferor's potential or actual receipt of income or principal from a charitable remainder unitrust or charitable remainder annuity trust (as those terms are defined in Section 664 of the Internal Revenue Code). (5) The transferor's potential or actual receipt of income or principal from a grantor retained annuity trust or grantor retained unitrust that is allowed under Section 2702 of the Internal Revenue Code. (6) The transferor's potential or actual receipt or use of principal when that potential or actual receipt or use results from a qualified trustee's acting: (A) in the qualified trustee's discretion; (B) under a standard that governs the distribution of principal and does not confer upon the transferor a power to consume, invade, or appropriate property for the benefit of the transferor unless the power of the transferor is limited by an ascertainable standard relating to health, education, support, or maintenance within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code; or (C) at the direction of a trust director described in section 14 of this chapter who acts: (i) in the trust director's discretion; or (ii) under a standard that governs the distribution of principal and does not confer upon the transferor a power to consume, invade, or appropriate property for the benefit of the transferor unless the power of the transferor is limited by an ascertainable standard relating to health, education, support, or maintenance within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code. (7) The transferor's right to remove a trustee or trust director and to appoint a new trustee or trust director as long as that right does not include the appointment of a person who is a related or subordinate party to the transferor within the meaning of Section 672(c) of the Internal Revenue Code. (8) The transferor's potential or actual use of real property held under a qualified personal residence trust (as defined in Section 2702(c) of the Internal Revenue Code). (b) For the purpose of subsection (a)(6)(A), a qualified trustee is presumed to have discretion with respect to the distribution of principal unless that discretion is denied to the qualified trustee by the terms of the legacy trust. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-14 Appointment of trust directors

Sec. 14. (a) A transferor may appoint one (1) or more trust directors who may have authority under the terms of the trust: (1) to remove and appoint qualified trustees or trust directors; and (2) to direct, consent to, or disapprove distributions from the trust. (b) Trust directors are not required to satisfy the requirements imposed upon trustees by section 6 of this chapter. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-15 Resignation of qualified trustee; appointing successor trustees

Sec. 15. If: (1) a qualified trustee of a legacy trust ceases to meet the requirements of section 6 of this chapter; and (2) there remains no trustee of the legacy trust that meets the requirements of section 6 of this chapter; the qualified trustee described in subdivision (1) is considered to have resigned when the qualified trustee ceased to meet the requirements of section 6 of this chapter, and a successor trustee provided for in the legacy trust shall become a qualified trustee. If the legacy trust does not provide for a successor qualified trustee, a court shall appoint a successor qualified trustee upon the application of any interested party. As added by P.L.221-2019, SEC.9.

Ind. Code § 30-4-8-16 Rights of a lender; notice of transfer of assets

Sec. 16. (a) Nothing in this chapter shall be construed to prohibit a lender from enforcing its rights in property identified in section 1(b) of this chapter and, to the extent necessary, naming the legacy trust or trustee of the trust as a defendant to the action or proceeding. (b) If an asset described in section 1(b)(1) of this chapter is transferred to a legacy trust or trustee of a legacy trust, the transferor of that asset must send written notice of the transfer to the pertinent lender within fifteen (15) days after that transfer. The transferor must send the notice by certified mail, return receipt requested, to the registered agent for the lender. If there is no registered agent for the lender, the transferor must send notice to one (1) of the following: (1) The last known address of the lender. (2) The last address specified by the lender for mailing payments on the obligations. (3) The address specified by the lender for general inquiries by customers. The notice must include the name of the transferor, a description of the asset transferred, the name of the trustee, and the date that the transfer was completed. Upon request, the transferor or trustee shall provide the lender with a certification of the trust under IC 30-4-4-5, the names and addresses of the qualified beneficiaries of the trust, and copies of the pages from the trust instrument that identify the current trustee and describe the trustee's administrative powers and duties. (c) Nothing in this chapter shall be construed to authorize any disposition that is prohibited by the terms of any agreements, notes, guaranties, mortgages, indentures, instruments, undertakings, or other documents. Any provisions that prohibit such transfer or disposition shall be binding and shall make this chapter inapplicable, so long as any indebtedness remains outstanding in connection with such agreements, notes, guaranties, mortgages, indentures, instruments, undertakings, or other similar documents. (d) In the event of a conflict between this section and any other provision of this chapter, this section shall control. As added by P.L.221-2019, SEC.9. Amended by P.L.231-2019, SEC.32; P.L.56-2020, SEC.14; P.L.32-2021, SEC.87.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/30Fetched: 10/17/2026