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Friday, October 20, 2006

Ind. Decisions - "Two charities lose in Lilly estate ruling"

Yesterday's Court of Appeals decisions in Americans for the Arts, et al. v. Ruth Lilly Annuity Trust, et al., (see ILB entry here) is the subject of this story by Kevin O'Neal in today's Indianapolis Star:

The Indiana Court of Appeals, affirming a lower court ruling, ruled Thursday that National City Bank acted in good faith in handling an estate plan for Ruth Lilly.

At issue in the case: large portions of what is estimated to be an estate worth more than $1 billion held by Ruth Lilly, the only surviving grandchild of the founder of drug giant Eli Lilly and Co.

"We're disappointed with the decision," said Andrew J. Goodman, a New York attorney who represented Americans for the Arts, one of the charities that sued in the case. "We're exploring the possibility of taking the case to the Indiana Supreme Court."

The lawsuit, filed by that group as well as the Poetry Foundation, claimed National City failed to diversify the funds entrusted to it, costing the plaintiffs millions of dollars as her future beneficiaries.

"Ruth Lilly gave this wonderful gift to the poetry world, and our job is to protect that gift," said John Barr, president of the Poetry Foundation, who estimated that the charities lost $100 million because of investments not made by National City.

The appellate judges upheld a ruling by Marion Superior Court, Probate Division, that endorsed the bank's plans for Lilly's estate, which oversees two charitable trusts in Ruth Lilly's name. Those trusts will provide a lifetime annuity to Lilly and to six of her nieces and nephews for five years, with the rest going to the Lilly Endowment and the two charities.

The court said the bank's actions were part of a move to "overhaul her extraordinarily -- and unnecessarily -- complicated estate plan that was sure to result in protracted litigation and astronomical tax bills."

While the charities said the bank did not properly diversify the estate's investments, the appeals court said a clause in the estate plan specifically did not require that sort of diversification, and so the bank did nothing wrong.

Posted by Marcia Oddi on October 20, 2006 08:48 AM
Posted to Ind. App.Ct. Decisions