2011 IL App (1st) 110335
Ill. App. Ct.2011Background
- Barbara Faville's father, Martin Burns, died in 1939, leaving a will that created a trust for Barbara with life income to Barbara and remainder to her then-living descendants per stirpes.
- Barbara appointed Martin Burns as trustee of her trust in 1978; relations deteriorated and Barbara sought his removal and replacement, which did not occur before her death in 2010.
- In 2009 Barbara legally adopted her adult stepchildren Andrew and William Faville; they provided notice to Martin of their adoptee status, altering potential trust interests.
- Barbara died on February 28, 2010; Andrew and William filed an amended complaint alleging they are Barbara’s descendants for purposes of the trust and seeking Martin’s removal as trustee due to conflict of interest and fiduciary breaches.
- Martin moved to strike under 735 ILCS 5/2-615, arguing 2-4(a) (not 2-4(f)) determines descendant status for pre-1998 instruments; trial court granted the motion to dismiss.
- The appellate court reversed, holding that 2-4(f) should apply to determining descendants for the 1939 instrument, and that 2-4(a) amendments do not apply to pre-1998 instruments, thus remanding for further proceedings on both descendant status and removal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which Probate Act provision governs descendants status | Favilles: 2-4(f) applies; adoptive status presumptively included in pre-1955 instrument. | Burns: 2-4(a) controls and amendments post-1997 do not apply to the 1939 instrument. | 2-4(f) governs; 2-4(a) amendments do not apply to the 1939 instrument. |
| Applicability of 1997 amendment to 1939 instrument | Amendment is applicable to determining rights under the instrument executed before 1998. | Amendment only applies to instruments executed on or after January 1, 1998. | Amendment does not apply to the 1939 instrument; disputed rights proceed under pre-amendment law. |
| Descendant status under the trust | Adopted Andrew and William are Barbara's descendants for purposes of the trust. | Adopted status does not render them descendants under the trust due to post-18 adoption and non-cohabitation. | Adopted descendants presumptively included under 2-4(f). |
| Removal of trustee for conflict of interest | Martin’s contingent remainderman status creates a conflict with potential beneficiaries, warranting removal. | No demonstrated abuse of discretion or fiduciary breach; the trustee acted within broad discretion. | Sufficient allegations of conflict of interest to state a claim for removal. |
| Prudent investor rule claim | Martin breached prudent investor rule by preserving principal at the expense of income. | Trust deed gives broad discretion; prudent investor rule is about conduct, not results; no abuse shown. | Trial court did not err in dismissing the prudent investor claim. |
Key Cases Cited
- In re Estate of Roller, 377 Ill. App. 3d 572 (2007) (expands presumption for adoptees under instruments; 2-4(f) context)
- Cross v. Cross, 177 Ill. App. 3d 588 (1988) (adult adoption to make heir—subterfuge theory)
- Laubner v. JP Morgan Chase Bank, N.A., 386 Ill. App. 3d 457 (2008) (prudent investor rule and trustee discretion standard)
- Yates v. Yates, 255 Ill. 66 (1912) (removal when contingent interest conflicts with beneficiaries)
- Lorenz v. Weller, 267 Ill. 230 (1915) (contingent remainderman removal relevance)
- In re Estate of Hawley, 183 Ill. App. 3d 107 (1989) (fiduciary duty and self-dealing concepts)
- Altenheim German Home v. Bank of America, N.A., 376 Ill. App. 3d 26 (2007) (interpretation of 'instrument' to include trusts)
- King v. First National Bank, 165 Ill. 2d 533 (1995) (interpretation of inheritance concepts under 2-4)