First National Bank of Murphysboro v. Grammer

426 N.E.2d 269, 99 Ill. App. 3d 993, 55 Ill. Dec. 294, 1981 Ill. App. LEXIS 3257
CourtAppellate Court of Illinois
DecidedAugust 25, 1981
DocketNo. 80-261
StatusPublished
Cited by1 cases

This text of 426 N.E.2d 269 (First National Bank of Murphysboro v. Grammer) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank of Murphysboro v. Grammer, 426 N.E.2d 269, 99 Ill. App. 3d 993, 55 Ill. Dec. 294, 1981 Ill. App. LEXIS 3257 (Ill. Ct. App. 1981).

Opinion

Mr. PRESIDING JUSTICE KASSERMAN

delivered the opinion of the court:

On May 3, 1977, Bessie Roberts entered into a trust agreement and named Rondell Grammer, defendant, as trustee. The agreement provided in pertinent part that:

“SECOND: During the lifetime of the Settlor, the Trustee shall pay the net income to the Settlor, or for the benefit of the Settlor, in quarterly installments, or shall déposit the net income to any account Settlor may designate. The Trustee shall pay to the Settlor such sums from the principal of the trust as the Settlor may direct in writing delivered to the trustee or as the trustee shall deem to be necessary or advisable for the support, maintenance, comfort, welfare, and medical, dental, hospital or' similar care for the Settlor.
THIRD: If the Settlor becomes incapacitated or ill, or if in the opinion of the Trustee it is more convenient for the Settlor, the Trustee during any such period shall pay, use and expend the net income and so much of the principal as may be necessary, in the Trustee’s discretion, to provide for the support, comfort, welfare, and medical, dental, hospital or similar care for the Settlor.
In determining whether to act or cease acting under this clause, the Trustee shall consult with DR. BORGSMILLER, of Murphysboro, Illinois, otherwise the physician then attending Settlor. The Trustee in making this determination under this clause may conclusively rely on a written medical opinion issued by a licensed medical doctor.
The Trustee is also authorized to arrange for convalescent care, extended care or nursing home care if the Trustee deems any such type of care is necessary and advisable for the support, comfort, maintenance, welfare, medical, dental, hospital or similar care for the Settlor.
In providing nusing [sic] home or permanent care, the Trustee shall require that any establishment, agency, or facility providing such care provide:
(a) Reasonable comfort and maintenance at the standard of living which the Settlor had maintained up to the time of admission for Settlor.
(b) Medical and nursing care of adequate quality, which covers all conditions of physical and mental infirmities attendant upon old age.
(c) The best care and comfort in all situations relating to health, medical, dental, hospital, nursing expenses and expenses of invalidism (except major hospitalization) as the Settlor would have provided.
Any income not paid for by the above purposes shall be added to the principal of the trust.”

Bessie Roberts was declared incompetent by order of the Circuit Court of Jackson County, entered on February 22, 1978. The order appointed the First National Bank of Murphysboro (hereinafter the Bank) as conservator of the estate of Bessie Roberts and Rondell Grammer, the trustee, as conservator of her person.

On November 15, 1979, the Bank filed a complaint, requesting that Grammer be required (1) to account for all assets of the trust and for all transactions concerning the trust after February 22, 1978, and (2) to pay the Bank all income of the trust when received. It was never contended that Grammer had been derelict in his duties as trustee. Instead, the Bank alleged that it made these requests in order to fulfill its duties as conservator of the estate of Bessie Roberts.

The trial court by order entered on June 6, 1980, stated in pertinent part:

“(5) Once this Court appointed Plaintiff, the First National Bank of Murphysboro, as Conservator of the estate of the Settlor, the Conservator was charged with the duty to manage and preserve the estate of the incompetent. That duty included the power to do that which is necessary for the proper performance of that duty subject to Court direction. Since the Settlor retained the power of direction as to the income and principal of the Trust during her lifetime, that power was transferred to the Plaintiff as Conservator of her estate and the provisions of Article 3 of the Trust were no longer applicable. ” ” *”

The relief requested by the Bank was granted, and from that order defendant Crammer appeals.

The first issue raised by defendant is whether a court may order the trustee of an inter vivos trust to account to and pay trust income to the conservator of the estate of a settlor-beneficiary who is now incompetent when provision for the incompetency of the beneficiary was made by an unambiguous portion of the trust.

The general clauses of the trust require the trustee to pay the income of the trust directly to the beneficiary. However, the third article gives the trustee the discretion to secure medical attention and living quarters for the beneficiary. It was to come into operation when the beneficiary became unable to care for herself and was designed to insure that, in her infirmity, the beneficiary would be cared for by someone of her own choosing and according to her own instructions. Those instructions, while giving the trustee broad powers, are quite explicit. Article three directs the trustee to obtain institutional care “at the standard of living which the Settlor had maintained” up to the time of her admission, and to procure “the best care and comfort in all situations relating to health, medical, dental, hospital, nursing expenses and expenses of invalidism (except major hospitalization) as the Settlor would have provided.” Bessie Roberts clearly contemplated that she would be looked after by someone familiar with her needs, tastes and habits. She obviously was of the opinion that defendant was that person.

For this reason, we conclude that the incompetency of Bessie Roberts did not operate to revoke her inter vivos trust. Instead, her disability provides compelling justification to keep the trust intact. A contrary holding would frustrate the plain intent of the settlor, contrary to the most fundamental tenet of trust interpretation and the provisions of section 3(1) of the Trusts and Trustees Act (Ill. Rev. Stat. 1979, ch. 148, par. 103(1)). Cf. Ford v. Newman (1979), 77 Ill. 2d 335, 396 N.E.2d 539; Kavanaugh v. Estate of Dobrowolski (1980), 86 Ill. App. 3d 33, 407 N.E.2d 856.

Defendant argues that the portion of the order of the trial court specifying that “the provisions of Article 3 of the trust were no longer applicable” indicated the court’s intention to revoke all of his authority under the trust. When read out of context, such is the obvious import of the specified portion of the order. However, we believe that the trial court recognized the justification for retaining a portion of the third clause of the trust when it retained Grammer as the individual to provide for the personal needs of the incompetent. In any event, we conclude that those provisions of the third clause of the settlor’s trust pertaining to her personal support, comfort, welfare, and medical, dental, hospital or similar care remain in full force and effect.

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426 N.E.2d 269, 99 Ill. App. 3d 993, 55 Ill. Dec. 294, 1981 Ill. App. LEXIS 3257, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-of-murphysboro-v-grammer-illappct-1981.