Dispute continues over beneficiary of trust The Humane Society of Indianapolis needs money to keep its doors open. But five local animal welfare organizations have filed legal disputes against the HSI’s proposed financial recovery plan to borrow against a $3.4 million trust. Five local animal welfare organizations have filed legal disputes against the HSI’s proposed financial recovery plan to borrow against a $3.4 million trust.On Aug. 31, Marion County Probate Judge Charles J. Dieter ruled that the five groups — Spay-Neuter Services of Indiana, Alliance for Responsible Pet Ownership, Home for Friendless Animals, Southside Animal Shelter and Move to Act — couldn’t participate in the court hearing to determine if the HSI could access the restricted Mary Crume Trust. Dieter ruled that only Indiana Attorney General Steve Carter could represent public interests in this matter.
The five groups then filed an appeal asking to suspend Dieter’s decision. This appeal will allow them to participate in an Oct. 14 hearing for testimony regarding the HSI’s recovery plan.
Martha Boden, executive director of the HSI, said it wants to use the trust as collateral for securing an operating line of credit of $3.4 million. She added that the HSI’s operating deficit averages about $75,000 a month and is “gradually getting smaller as our fund-raising increases.”
Since the HSI’s expenses run roughly $200,000 a month, Boden said, the line of credit would cover less than half of expenses. “Fund-raising and animal services revenue makes up the difference,” she said. “Operating expenses partially covered by the line of credit include animal and veterinary supplies, animal food, utilities, salaries, etc.”
But the groups disagreeing with the plan point to Mary Powell Crume’s will that created the Trust after she died in 1935. Dated June 1921, it states: “[I] bequeath all of the trust estate and property … to the Indianapolis Humane Society, of the City of Indianapolis, Indiana, as Trustee, to have and to hold the same perpetually in trust for the sole purpose of using the net income therefrom for relief of animals which come under its care. Said last mentioned Trustee shall have no power or authority to use either the principal or income of said trust estate and property to pay for buildings, equipment, salaries or any expenses other than relief of said animals.”
The five opposing animal welfare groups see using the funds to pay for equipment or salaries is in direct conflict with provisions of Crume’s will. “This language … is very specific, [the Trust is] to pay for the care and relief of animals,” said Attorney Veronica Jarnagin, who represents the opposing groups.
Boden disagreed. “Crume’s Trust was reformed over 40 years ago by the Probate Court, which since that time has on several occasions allowed HSI to use Trust funds to pay for capital and other expenses to fulfill the Trust’s essential purpose,” she said. “The court did so because the literal language of the will would have thwarted that purpose altogether; HSI cannot support the thousands of animals in its care without buildings, employees, etc.
“Moreover, the Trust has been supervised by the Probate Court since 1962, and all capital and other operational expenditures from Trust funds have been made with approval of the court. The Trust, therefore, has been interpreted by the Probate Court to allow exactly what Move to Act is claiming is a violation of the terms of the Trust.”
But Jarnagin doesn’t believe the HSI should be controlling the Crume Trust at all. “The Humane Society was actually named specifically as the trustee to use this perpetual income stream for the care and relief of animals. It was never specifically named as the beneficiary,” she said. “They shouldn’t be a trustee because they can’t handle money. All they are looking to do with this money is to meet their operating expenses and have a balanced budget by 2006. No additional services. What they’ll probably have do is continue to cut back services.”
Boden said the HSI will remain the trustee and beneficiary. “The Trust funds, by the express terms of the Trust, can only be used to support animals in HSI’s care. HSI is the sole beneficiary.”
Jarnagin and her clients believe the HSI has dissuaded citizens from relinquishing unwanted animals to their organizations leading to additional overflow at other shelters and animal dumping. “Our vision is that the appeals court will find that we have standing … that the attorney general will actually step in and actually take more specific action against the HSI for what has happened with commingling of Trust assets and conflicts of interest … and would call for a reorganization of the HSI board and its requirements under the law to account back to the public.”
Jarnagin stated that the bottom line for her clients is the welfare of the animals.