Madison Capital Co. v. S & S Salvage, LLC, 765 F. Supp. 2d 923, 931-32 (W.D. Ky. 2011). "It is elementary, of course, that when property is held in trust the trustee holds the legal title and the beneficiary or beneficiaries are considered to be owners of the equitable title." Hatcher v. S. Baptist Theological Seminary, 632 S.W.2d 251, 252 (Ky. 1982). Beam argues that she cannot be held liable for conversion because she has not received any trust funds that would eventually pass to Plaintiffs. (D.N. 49-1, PageID # 243) Instead, she claims, all disbursements Plaintiffs complain of were made for Lila Kerns's benefit. (Id.)
A trustee has title to the assets of the trust, but the beneficiaries are the real owners because they are entitled to the income or other benefits that the assets of the trust yield, minus only the trustee's reasonable fee for managing the assets. Hatcher v. Southern Baptist Theological Seminary, 632 S.W.2d 251, 252 (Ky. 1982) ("when property is held in trust the trustee holds the legal title and the beneficiary or beneficiaries are considered to be owners of the equitable title"); Guitner v. McEowen, 99 Ohio App. 32, 124 N.E.2d 744, 747 (1954); Restatement (Third) of Trusts § 2 and comments d, f (2003); George Gleason Bogert, George Taylor Bogert Amy Morris Hess, The Law of Trusts and Trustees § 1 (3d ed. 2009). The attorneys general were trying to strip WellPoint of its equitable ownership — its right to use the acquired assets for profit. Whether WellPoint remained the trustee was a detail.
Pursuant to the Sixth Circuit's holding in Martin Arsham, the claims against Stephen and Robert, as Co-Trustees of the Irrevocable Trust, are subject to the automatic stay. GATX has alleged that Larry fraudulently conveyed property to the Irrevocable Trust. As a matter of law, legal title to the property was transferred to Stephen and Robert, as Co-Trustees, making them "transferees" of the fraudulent conveyances. See Hatcher v. Southern Baptist Theological Seminary, 632 S.W.2d 251, 252 (Ky. 1982) (holding that "it is elementary, of course, that when property is held in trust the trustee holds the legal title and the beneficiary or beneficiaries are considered to be the owners of the equitable title."). GATX brings the current action against Stephen and Robert, as Co-Trustees, in an attempt to satisfy Larry's debts by attacking, as fraudulent, property transfers to these third parties.
In another case, the United States Court of Appeals for the Seventh Circuit explained that, with respect to property ownership, "[a] trustee has title to the assets of the trust, but the beneficiaries are the real owners because they are entitled to the income or other benefits that the assets of the trust yield, minus only the trustee's reasonable fee for managing the assets." Wellpoint, Inc. v. Comm'r of Internal Revenue, 599 F.3d 641, 648 (7th Cir. 2010); see also Hatcher v. S. Baptist Theological Seminary, 632 S.W.2d 251, 252 (Ky. 1982) ("[W]hen property is held in trust the trustee holds the legal title and the beneficiary or beneficiaries are considered to be owners of the equitable title.").
The trial court found this view to be buttressed by KRS 394.550(3), Kentucky's anti-ademption statute, which, without reference to timing directs, “[a]ll shares of stock issued as a result of merger, consolidation, reorganization or other similar action, and attributable to the devised shares” are included in any legacy of stock. See Hatcher v. Southern Baptist Theological Seminary, 632 S.W.2d 251, 254 (Ky.1982). Thus, the fact that the stock was converted in 1983 and split in 1995, before the will was executed in 1997, was not fatal to the bequest.
The trial court found this view to be buttressed by KRS 394.550(3), Kentucky's anti-ademption statute, which, without reference to timing directs, “[a]ll shares of stock issued as a result of merger, consolidation, reorganization or other similar action, and attributable to the devised shares” are included in any legacy of stock. See Hatcher v. Southern Baptist Theological Seminary, 632 S.W.2d 251, 254 (Ky.1982). Thus, the fact that the stock was converted in 1983 and split in 1995, before the will was executed in 1997, was not fatal to the bequest.
The trial court found this view to be buttressed by KRS 394.550(3), Kentucky's anti-ademption statute, which, without reference to timing directs, "[a]ll shares of stock issued as a result of merger, consolidation, reorganization or other similar action, and attributable to the devised shares" are included in any legacy of stock. See Hatcher v. Southern Baptist Theological Seminary, 632 S.W.2d 251, 254 (Ky. 1982). Thus, the fact that the stock was converted in 1983 and split in 1995, before the will was executed in 1997, was not fatal to the bequest.
The named children of the deceased sister are here insisting that the devise to James Hanley, since he predeceased the testatrix, passed to her heirs at law. To support their construction of the will, they cite to us section 4843, Kentucky Statutes; Garrard et al. v. Kendall (Ky.) 121 S.W. 997; Struss v. Fidelity Columbia Trust Co. et al., 182 Ky. 106, 206 S.W. 177; Carroll v. Carroll's Ex'r, 248 Ky. 386, 58 S.W.2d 670. The section of the statute cited by them was construed in Newton, etc., v. Southern Baptist Theological Seminary, 115 Ky. 414, 74 S.W. 180, 24 Ky. Law Rep. 2310, and in Schroeder, etc., v. Bohlsen, etc., 119 Ky. 305, 83 S.W. 627, 84 S.W. 535, 26 Ky. Law Rep. 1237, 27 Ky. Law Rep. 188. The construction therein was followed in Garrard et al. v. Kendall. The cases of Struss v. Fidelity Columbia Trust Co. et al. and of Carroll v. Carroll's Ex'r are not pertinent to the questions to be determined.