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than to manage it as trustee for the benefit of the remaindermen,
petitioner’s children. Petitioner has no right under the trust
agreement to vest corpus in himself. The trust agreement
strongly shows the settlor’s intent for the trustee to act to
preserve the corpus for eventual distribution to the settlor’s
grandchildren. Petitioner, as trustee, has fiduciary duties to
these remainder beneficiaries and must act for their benefit when
dealing with the corpus.
Further, the undistributed income never became part of the
trust corpus nor commingled with the trust corpus.5 Petitioner
never relinquished his claim to the undistributed net income.
Moreover, the trust’s books and records showed the amount of
undistributed net income due petitioner. The undistributed net
income, unlike the trust corpus, was subject to petitioner’s
withdrawal at any time. The undistributed net income was not
held subject to the trust agreement, not required to be invested
for the benefit of the remaindermen, and therefore, not part of
the corpus.
Petitioners have also failed to prove the conservation
easements were donated from the undistributed net income
5We note that, if the undistributed net income did become
part of the corpus, the trust agreement would impose fiduciary
obligations on petitioner with respect to it. Any donation of
the undistributed net income, if it became part of corpus, would
be a violation of petitioner’s fiduciary duties to maintain the
corpus for the benefit of the remaindermen, his children.
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Last modified: May 25, 2011