Gwinn v. Gwinn, 2016 IL App (2d) 150851

Betty M. Gwinn created a trust in 2002 naming herself and Kenneth Gwinn Sr. (defendant) as initial trustees; the trust divided into a Marital Trust and a Family Trust upon Betty’s death.
After Betty died in 2009, defendant became sole trustee and primary income/limited-principal beneficiary; in 2009 trust assets were under the federal exclusion so assets became the Family Trust.
Trust §4(c) allowed the trustee to pay sums from principal that he "deems necessary or advisable from time to time for his health, support and maintenance in reasonable comfort." §7(n) separately authorized the trustee to make gifts to Betty’s descendants.
Plaintiffs (three of Betty’s four children) allege that in 2011 defendant used at least $425,000 of trust principal to build and title a custom Colorado house solely in his new wife Fritz’s name — an "extraordinary gift" that depleted remainder beneficiaries’ interests.
Plaintiffs sued for breach of the trust and breach of fiduciary duty; Fritz was later dismissed for lack of personal jurisdiction. The trial court dismissed counts I and II under 735 ILCS 5/2-615; the appellate court reversed and remanded.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trustee’s withdrawal power under §4(c) authorized gifting trust principal to a non-descendant (Fritz)	§4(c) limits withdrawals to what is "necessary or advisable" for trustee’s health/support/maintenance and does not authorize extraordinary gifts or transfers to non-descendants	§4(c) gives the trustee broad discretion ("necessary or advisable") to withdraw for his comfort, and buying the house served his health/support/maintenance	Reversed dismissal: taking plaintiffs’ allegations as true, a gift titled solely in Fritz’s name plausibly exceeds §4(c) authority; trustee lacked express power to gift to non-descendants and therefore plaintiffs stated a claim
Whether allegations state a claim for breach of fiduciary duty distinct from breach of trust	Trustee acted in bad faith by making an unauthorized extraordinary gift that depleted trust assets to plaintiffs’ detriment	Actions were within trustee’s discretionary authority under the trust; no separate wrongful fiduciary conduct pleaded	Reversed dismissal: alleging an unauthorized gift supports both a trust breach claim and a fiduciary-duty claim sufficient to survive a 2-615 motion

Turner v. Memorial Medical Center, 233 Ill. 2d 494 (2009) (standard for reviewing a section 2-615 dismissal)
Matthews v. Chicago Transit Authority, 2016 IL 117638 (2016) (pleading facts must be accepted as true on motion to dismiss)
Rock Island Bank & Trust Co. v. Rhoads, 353 Ill. 131 (1933) (language like "satisfaction" can confer unreviewable discretion on a trustee/beneficiary)
Brown Brothers Harriman Trust Co. v. Bennett, 357 Ill. App. 3d 399 (2005) (trust construction focuses on settlor intent and the whole instrument)
In re Estate of Polley, 111 Ill. App. 3d 873 (1982) (support/maintenance provisions do not authorize enlarging beneficiary’s separate estate)
Altenheim German Home v. Bank of America, N.A., 376 Ill. App. 3d 26 (2007) (express grant of a power implies exclusion of powers not granted)
Woolard v. Woolard, 547 F.3d 755 (7th Cir. 2008) (same expressio unius construction principle applied to trust powers)