DEBRA A. TIEDEMANN, as Trustee of The Edward E. Tiedemann Declaration of Trust, Dated January 30, 2014 v. BRENT E. TIEDEMANN and KEVIN A. TIEDEMANN
NO. 5-24-1010
APPELLATE COURT OF ILLINOIS FIFTH DISTRICT
2025 IL App (5th) 241010
Appeal from the Circuit Court of Piatt County. No. 24-CH-2. Honorable Dana C. Rhoades, Judge, presiding.
NOTICE: This order was filed under
PRESIDING JUSTICE McHANEY delivered the judgment of the court, with opinion. Justices Moore and Sholar concurred in the judgment and opinion.
OPINION
¶ 1 Edward E. Tiedemann (Settlor) executed the “Edward E. Tiedemann Declaration of Trust” (Trust) on January 30, 2014. He was the initial trustee of the Trust, and he named his wife, Debra A. Tiedemann (Debra) as the successor trustee of his Trust. The beneficiaries of the Trust were Debra, and his two sons, Brent E. Tidemann and Kevin A. Tiedemann (defendants). In 2022, the Settlor and Debra obtained a loan for $862,400 to purchase land in St. Clair County. The purchase was secured by a mortgage agreement dated June 30, 2022. Following the Settlor‘s death on September 7, 2023, ownership of the Belleville property passed to Debra as a joint tenant with right of survivorship. Following the Settlor‘s death, no payments were made on the loan, and the financial institution sent a notice of default, stating its intent to foreclose if the default was not remedied. Thereafter, Debra filed her petition with the trial court asking for “aid and direction” pursuant to the
¶ 2 I. Background
¶ 3 On January 30, 2014, the date that the Settlor executed his Trust, he also executed his final will. The Trust included tracts of real estate described in an attached and incorporated schedule. The two tracts of Trust real estate were in St. Clair County and were labeled as tract No. 1 and tract No. 2. The Trust was also defined to include any other property later added by the Settlor, together with the proceeds thereof. At an unspecified date, a third St. Clair County tract was transferred into the Trust.
¶ 4 Article 10 of the Trust provides that upon the Settlor‘s death:
“[Debra] shall pay from the Trust Estate, directly or through my personal representative, without apportionment or reimbursement, all of my just debts, including the expenses of my last illness and funeral, all expenses of administration of property wherever situated, passing under my Will or this [Trust] or otherwise, and all estate inheritance, transfer and succession taxes which become due by reason of my death *** ”
¶ 5 On June 30, 2022, the Settlor and First Federal Savings Bank of Mascoutah (Bank) executed a promissory note and a mortgage for $862,400 to purchase the Rentchler Station Road property in St. Clair County. The Settlor signed the promissory note and the Settlor and Debra both signed the mortgage. The promissory note was secured by a mortgage on four properties in St. Clair County. Three of the properties were within the Trust. The fourth property, the Rentchler Station Road property was not transferred into the Trust before the Settlor died. The Settlor also signed an assignment of rents to the four St. Clair County properties to the Bank “TO SECURE (1) PAYMENT OF THE INDETEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF BORROWER AND GRANTOR UNDER THE NOTE, THIS ASSIGNMENT, AND THE RELATED DOCUMENTS.” The Bank had the sole discretion as to application of the rents, but any rents received by the Bank that were not applied to the costs and expenses the Bank incurred in connection with the properties would be applied to the loan.
¶ 6 The Rentchler Station Road property was titled in the Settlor and Debra‘s joint tenancy with right of survivorship. Upon the Settlor‘s death on September 7, 2023, ownership of the Rentchler Station Road property passed by operation of law to Debra through her interest as the property‘s joint tenant with right of survivorship. Upon the Settlor‘s death, Debra also became the trustee of the Trust.
¶ 7 The record does not indicate if Debra made any mortgage payments on the Rentchler Station Road property loan after the Settlor‘s death. However, in January 2024, the Bank sent its notification that both the promissory note and the mortgage were in default, stating that the Bank intended to pursue foreclosure on the four properties if the default was not remedied. The amount of outstanding debt was then $858,476.08.
¶ 8 Debra‘s petition asked the trial court for aid and direction pursuant to
¶ 9 On July 3, 2024, the defendants filed their response to Debra‘s petition. The defendants agreed that Debra was a beneficiary of the Trust, particularly with respect to the marital domicile shared as of Settlor‘s death and that they were beneficiaries of the balance of the Trust, to be distributed equally. They disputed Debra‘s claim that the loan on the Rentchler Station Road property should be satisfied by Trust assets. The defendants alleged that three of the four St. Clair County properties were Trust assets, but the fourth property—the Rentchler Station Road property, consisting of 61.6 acres—had been titled jointly with right of survivorship by the Settlor and Debra alone. They argued that using Trust assets to pay the indebtedness on the property would be at the defendants’ detriment and would unjustly enrich Debra. The defendants cited
¶ 10 The defendants asked the trial court to remove Debra as the trustee because (1) she was suggesting that this personal debt should be paid from the Trust; (2) she was prioritizing her personal interests over her Trust duties and the well-being of the Trust beneficiaries; (3) she had received rental payments and income that were not placed into the Trust, and she had not reported the use of such funds to the defendants; and (4) she had failed by commission and omission to properly carry out the trustee‘s duties of accounting. The defendants asked the court to remove her as the acting trustee, and to replace her with the successor trustee, Brent E. Tiedemann.
¶ 11 On July 31, 2024, the trial court held a hearing on Debra‘s petition and the defendants’ response. The court entered its order on August 26, 2024. In its order, the court noted that the Trust provided that Debra could reside in the marital home for her lifetime with conditions and that the marital home at the time of the Settlor‘s death was in Monticello, Illinois. The court also noted that the Trust provided general provisions for the payment of the Settlor‘s debts and expenses. The court took judicial notice of the Settlor‘s will and noted that it was a pour-over will with a few specific tangible personal property bequests, with the remainder pouring into the Trust.
¶ 12 The trial court noted that the Settlor signed a promissory note to the Bank individually and not in his capacity as trustee of the Trust on June 30, 2022, for $862,400. Those funds were used to purchase a 61.6-acre parcel on Rentchler Station Road in St. Clair County. The mortgage dated the same date was signed by both Settlor and Debra. Three additional parcels of land were included with the Rentchler Station Road parcel as collateral to secure the promissory note.
¶ 13 The trial court found that
¶ 14 Additionally, the trial court noted that the Settlor did not execute a codicil to his will expressing his intent that
¶ 15 The trial court found that
¶ 16 Debra appeals from the August 26, 2024, order.
¶ 17 II. Analysis
¶ 18 On appeal, Debra contends that the trial court erred both in finding that
¶ 19 When we interpret statutory language, our main objective is to determine and give effect to the legislature‘s intent. Westberg v. Barcroft, 2022 IL App (2d) 210543, ¶ 23 (citing Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, ¶ 24). “The most reliable indicator of legislative intent is the statutory language, given its plain and ordinary meaning.” Id. “Each word, clause, and sentence of a statute must be given a reasonable construction, and no term should be rendered superfluous.” Id. (citing 1010 Lake Shore Ass‘n v. Deutsche Bank National Trust Co., 2015 IL 118372, ¶ 21). Moreover, a court cannot deviate from the statute‘s plain and unambiguous language by “reading into the statute exceptions, limitations, or conditions not expressed therein.” Id. (citing Rosenbach, 2019 IL 123186, ¶ 24).
¶ 20 There is no question that article 10 of the Trust directs Debra to pay all “just debts” of the Settlor from the Trust estate. The defendants acknowledge that the promissory note is Settlor‘s debt. However, the defendants dispute that the promissory note qualifies as a “just debt” and note that
¶ 21 The common law doctrine of exoneration provided that a devisee of encumbered real estate was entitled to a discharge of the encumbrance from the decedent‘s personal estate unless otherwise directed. Griffin v. Gould, 72 Ill. App. 3d 747, 749 (1979). This rule was followed in Illinois “as a corollary of the common law principle that a decedent‘s personalty is the primary fund for payment of his debts.” Id. (citing Watts v. Killian, 300 Ill. 242 (1921); Martin v. Martin, 310 Ill. App. 622 (1941)).
¶ 22 Historically, the exoneration question was debated in legal circles. Noting that exoneration had been statutorily disposed of in New York in 1850 and in England in 1854, the question of whether Illinois should follow suit was deemed problematic, and thus, “[i]f the testator wants his will to reflect his wishes, what he thinks the law to be, then he must explicitly burden the devised realty with its mortgage” and “[i]t seems probable that a testator would believe that an encumbrance followed his devise. It would be more normal to expect him to comment if he wished it to be otherwise.” Lloyd J. Tyler Jr., Should the Widow Pay?, 47 Ill. B.J. 850, 852-53 (1959). “The inequitable case, the hard case ***, is more likely to occur where the devise is exonerated.” Id. Another author suggested that the doctrine of exoneration “thwarts intention more often than it fulfills it” and that “many, if not most testators, if they thought about the problem, would have said the *** devisee, should take the property with whatever encumbrance there might be on it, and assume the debt.” Austin Fleming, Will Drafting Problems Posed by Mortgage Indebtedness, 48 Ill. B.J. 846, 848 (1960).
¶ 23 The predecessor to
“A question suggested by the statutory words [of what is now
section 20-19 ] is whether a general direction to the legal representative to pay the debts of the decedent constitutes an ‘express provision’ to the contrary. The majority rule appears to be that a general direction to pay debts is merely declaratory of the law and does not of itself indicate an affirmative or express intent to pay debts secured by a lien or encumbrance.” 4 William M. James, Illinois Probate Law and Practice § 219b.4, at 242 (Austin Fleming Supp. 1975).
Another author stated: “The new statute requires an express provision in the decedent‘s will to overcome the effect of the statute and a mere statement to pay the testator‘s debts will not be sufficient to overcome it.” Spencer H. Raymond, 1967 Legislative Changes Affecting Probate and Trust Law, 56 Ill. B.J. 208, 215 (1967).
¶ 24 We review
¶ 25 The question that remains is whether Debra, as the undisputed owner of this property with its monetary encumbrance, can use Trust assets to pay off the encumbrance. Debra argues that the answer to this question lies within
¶ 26 We start with legal definitions of the terms at issue. The terms “real or personal estate,” “real and personal estate,” and “trust estate” are not defined in the Act or the Code. The term “real or personal estate” was used in the Act 9 times,1 and the term, “real and personal estate” was used 16 times in the Act.2 The term “personal estate” is defined as “personal property” as follows: “Any movable or intangible thing that is subject to ownership and not classified as real property.” Black‘s Law Dictionary (12th ed. 2024) (directed to “personal property (1) under PROPERTY“). The term “real estate” is defined as “real property” as follows: “Land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land.” Black‘s Law Dictionary (12th ed. 2024) (directed to “real property under PROPERTY“). The term “trust estate” is defined as “corpus” as follows: “[t]he property for which a trustee is responsible; the trust principal.—Also termed res; trust estate; trust fund; trust property; trust res; trust.” Black‘s Law Dictionary (12th ed. 2024) (directed to “corpus (1)“).
¶ 27 Using rules of statutory construction by giving the words their plain and ordinary meaning (Westberg, 2022 IL App (2d) 210543, ¶ 23 (citing Rosenbach, 2019 IL 123186, ¶ 24)), we find that the terms real and/or personal estate as used in the Act simply mean real property and/or personal property. Reasonably interpreting this clause, we conclude that use of these terms, as they have been legally defined, simply denotes the distinction between realty and personal assets. Moreover, the term “trust estate” simply means the trust property. See id. (citing 1010 Lake Shore Ass‘n, 2015 IL 118372, ¶ 21).
¶ 28 We acknowledge that cases interpreting
¶ 29 In Gould, 72 Ill. App. 3d at 750, Gould claimed that the will‘s provision that “‘all indebtedness’ ” is to be paid, necessarily included real estate taxes. Gould argued that the word, “‘all’ ” must “be regarded as including the real estate taxes in order to avoid a construction rendering the word meaningless or mere surplusage.” Id. at 752. The appellate court stated: “The will must be considered in its entirety to determine testator‘s intent and, to the extent possible, that construction should be adopted which will give effect to all the language employed.” Id. (citing Kiesling v. White, 411 Ill. 493, 499 (1952); Glaser v. Chicago Title & Trust Co., 393 Ill. 447, 457 (1946)). The appellate court declined to reach a conclusion that ” ‘all indebtedness’ ” included real estate taxes, noting that given the history of exoneration, and
¶ 30 The promissory note and mortgage represent the Bank‘s encumbrance against the property. Debra‘s request to use Trust assets to pay off the loan on the property at issue is clearly contrary to the express wording of
¶ 31 The provisions of the Trust provide additional support for the conclusion that Settlor never intended his trust assets to be used to pay off the encumbrance on the Rentchler Station Road property. “This court‘s primary concern in construing a trust is to discover the settlor‘s intent, which the court will effectuate if it is not contrary to law or public policy.” Estate of Mendelson v. Mendelson, 2016 IL App (2d) 150084, ¶ 25 (citing First National Bank of Chicago v. Canton Council of Campfire Girls, Inc., 85 Ill. 2d 507, 513 (1981)). “The settlor‘s intent is determined as of the time the instrument is executed.” Id. To ascertain the settlor‘s intent, we must consider the plain and ordinary meaning of the words used by the settlor and must also consider the entire document. Id. (citing First National Bank of Chicago, 85 Ill. 2d at 514).
¶ 32 In the Settlor‘s trust, he made provisions to allow Debra to have the marital home in Monticello “as her sole property” if they were living in that home when he died. He makes no provisions about payment of real estate taxes, insurance, maintenance, or any other costs associated with home ownership. Notably, Debra did not seek guidance from the court on who was responsible for said expenses.
¶ 33 As Debra was living in the Monticello home when the Settlor died, alternative Trust provisions for Debra‘s housing after his death are inapplicable. However, we find that the alternative provisions provide insight into the Settlor‘s intentions. If they had been living anywhere but the Monticello home, the Settlor provided that while Debra could live there for her lifetime—so long as she did not remarry or cohabitate with another person on a conjugal basis—she was expressly responsible for “costs and expenses incident to the use, debt service, maintenance and protection thereof, including the cost of monthly mortgage payments, if any, insurance and the taxes thereon.” Additionally, upon either Debra‘s “death, remarriage, cohabitation, abandonment of said property, or failure to pay the aforesaid costs and expenses incident to the use thereof, or at my death, if my wife predeceases me, said property shall be distributed per stirpes to my descendants then surviving.”
¶ 34 Article four of the Trust also capped the amount Debra could receive for the “property.” It is not clear what “the property” is as it was not defined, but it is not characterized as a marital domicile as used in other paragraphs in article four. The provision states:
“If the property which my wife and I own jointly *** does not have a *** fair market value, less mortgage or security interest debt *** of at least $250,000.00 at the date of my death, my successor Trustee shall distribute next from the Trust Estate to my wife an amount equal to the difference between the *** [fair] market value of said jointly owned property and the sum of $250,000.00 ***.”
¶ 35 We conclude that the Settlor‘s intent was to provide housing for Debra so long as she did not remarry or cohabitate with a partner, that she was solely responsible for all costs and expenses associated with this housing, and that she was entitled to a certain amount of money for “the property.” The balance of the trust was to be distributed to the Settlor‘s two sons, the defendants. Outside of the trust, Debra received the Rentchler Station Road property as the surviving joint tenant subject to the amount owed to the Bank. We find no basis in law or in the express terms of the Settlor‘s Trust and/or his will that Debra was entitled to pay off the encumbrance on the Rentchler Station Road property with Trust assets.
¶ 36 III. Conclusion
¶ 37 For the foregoing reasons, we affirm the order of the Piatt County circuit court.
¶ 38 Affirmed.
McHANEY, PRESIDING JUSTICE
ILLINOIS APPELLATE COURT, FIFTH DISTRICT
| Decision Under Review: | Appeal from the Circuit Court of Piatt County, No. 24-CH-2; the Hon. Dana C. Rhoades, Judge, presiding. |
| Attorneys for Appellant: | Michael J. Brusatte, David C. Thies, and Mia O. Hernandez, of Webber & Thies, P.C., of Champaign, for appellant. |
| Attorneys for Appellee: | David A. Rolf and Andrew T. Jarmer, of Sorling Northrup, of Springfield, for appellees. |