In Re Marriage of Romano
968 N.E.2d 115
Ill. App. Ct.2012Background
- Daniel and Cynthia Romano married on June 12, 1987; dissolution filed in 2006.
- Daniel established three irrevocable grantor trusts (DMR Gift Trust, MP Annuity Trust, SP Annuity Trust) in 2001; Buddy served as trustee.
- Daniel and family transferred interests in RBBC, Paramount, Central, Mueller to the DMR, MP, and SP trusts as part of an estate plan.
- SWSI purchased RBBC and Affiliates in 2002 for about $151 million; proceeds largely funneled into trust structures.
- Daniel later transferred 12.5% interests in M & D and Power to his trusts; ownership ultimately redistributed among family trusts for heirs.
- Courts characterized SP Trust as marital property; DMR Gift Trust and MP Trust were found neither marital nor Daniel’s nonmarital property; focus centered on classification and distribution of assets, including dissipation and maintenance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Classification of DMR assets funding | DMR funding assets should be marital. | DMR funding assets are Daniel's nonmarital property (gifts/Grantor trusts). | DMR funding assets deemed nonmarital; SP Trust deemed marital; overall property classification affirmed with remand on some issues. |
| Are M & D and Power Daniel's marital or nonmarital property? | Funds used to purchase were marital proceeds. | Interests were gifts from Buddy, thus nonmarital. | Daniel's interests in M & D and Power found nonmarital; gifts from Buddy supported classification. |
| Missing funds in DMR Gift Trust | Approximately $6.429 million is unaccounted for and should affect asset values. | Funds were used to satisfy other obligations; no missing funds claim supported by record. | No missing funds; plantiffs’ dissipation claim on this point rejected; no adjustment to asset values. |
| Dissipation analysis and date of irretrievable breakdown | Dissipation occurred due to transfers and fund movements; breakdown began earlier (2000/2003). | Court properly applied standard; no dissolution of marriage evidenced in 2000/2003. | Court's dissipation ruling upheld; no manifest-weight error; date finding not reversible. |
| Fraud on Cynthia's marital rights via DMR trusts | Transfers into and out of DMR trusts were illusory/colorable to defeat marital rights. | No prima facie case; transactions properly structured as grantor-trust arrangements. | Directed finding upheld; no evidence to show fraud on marital rights; no reversible error. |
Key Cases Cited
- In re Marriage of Henke, 313 Ill. App. 3d 159 (2000) (classification and presumption framework for property)
- In re Marriage of Hagshenas, 234 Ill. App. 3d 178 (1992) (gift presumptions in inter-family transfers; unitary asset treatment)
- In re Marriage of Didier, 318 Ill. App. 3d 253 (2000) (guidance on nonmarital property and exhibit of presumption overruns)
- In re Marriage of Sanfratello, 393 Ill. App. 3d 641 (2009) (premarital vs marital property in family-business context)
- In re O'Neill, 138 Ill. 2d 487 (1990) (defining dissipation standards and irretrievable breakdown)
- In re Marriage of Holthaus, 387 Ill. App. 3d 367 (2008) (timing of dissipation and Harmless-error approach)
- In re Marriage of Hazel, 219 Ill. App. 3d 920 (1991) (date of irretrievable breakdown; cautions against over-precision)
- In re Marriage of Frederick, 218 Ill. App. 3d 533 (1991) (illusory/colorable transfer framing in fraud on marital rights)
- In re Marriage of Jelinek, 244 Ill. App. 3d 496 (1993) (dissipation concept in context of marital property)