FIRST DIVISION AUGUST 06, 2007
No. 1-06-0820
IN RE ESTATE OF ) Appeal from the ) Circuit Court of JOHN J. PHELAN, ) Cook County, ) Illinois, County Deceased ) Department, Probate ) Division (Nora Phelan Clifford, ) ) Plaintiff-Appellant and ) Cross-Appellee, ) ) v. ) No. 00 P 10864 ) Jimmie "Red" Baskin, a/k/a Jimmy Baskin,) as Executor of the Will of John Phelan, ) and as Successor Trustee of the ) Declaration of Trust of John Phelan, ) dated, July 7, 2000, for the benefit of ) Karen Phelan, Joseph Phelan, Ryan ) Phelan, Nora Phelan Clifford and Nellie ) Phelan Wilson; Anthony J. D'Alexander, ) as Trustee of the MJRNN Irrevocable ) Trust dated June 1, 1999, for the ) benefit of Karen Phelan, Joseph Phelan, ) The Honorable, Ryan Phelan, Nora Phelan Clifford and ) Jeffrey A. Malak, Nellie Phelan Wilson, Karen Phelan, ) Judge Presiding. Joseph Phelan, Ryan Phelan, Nellie ) Phelan Wilson, Wyatt Wilson, and Joseph ) Patrick Clifford, ) ) Defendants-Appellees and ) Cross-Appellants). ) No. 1-06-0820
JUSTICE GARCIA delivered the opinion of the court.
John J. Phelan established two separate trusts to provide
for his wife and their two minor sons and his two adult daughters
from prior marriages. In the first trust, MJRNN Irrevocable
Trust (MJRNN Trust), he included his two adult daughters as
beneficiaries. In the second, the revocable Declaration of Trust
(Revocable Trust), he provided for his wife and two minor sons
but did not provide for his two adult daughters. This appeal
concerns the validity of those two trusts and the pourover
provision of his will.
The plaintiff, Nora Phelan Clifford, one of the two
daughters, appeals from an order of the trial court granting the
defendants' motion for a finding pursuant to section 2-1110 of
the Code of Civil Procedure (735 ILCS 5/2-1110 (West 2002)) on
her reformation claims of her amended complaint and amended
petition. The plaintiff contends she presented sufficient
evidence to establish a prima facie case to reform both the MJRNN
Trust and the Revocable Trust.
In the cross-appeal, the defendants, specifically Jimmie
Baskin, acting as executor of the will and trustee of the
Revocable Trust, argue that the trial court erred when it found
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that the Revocable Trust was not in existence at the time the
decedent, John Phelan, executed his will. Based on this finding,
the trial court determined that the pourover residuary provision
of the will failed, resulting in the residue of the estate
passing according to the laws of descent and distribution as if
the estate were intestate.
Because we find the plaintiff has failed to carry her burden
during her case in chief to warrant reformation of either trust,
we affirm the trial court's judgment against the plaintiff.
Because we find the Revocable Trust was in existence at the time
the will was executed, we reverse the trial court's judgment on
the cross-appeal.
BACKGROUND
The decedent, John Phelan, died on November 27, 2000. He
was survived by his wife, Karen Phelan, their two minor sons,
Joseph and Ryan, and two adult daughters from previous marriages,
the plaintiff and Nellie Phelan Wilson. Phelan provided for the
distribution of his assets in the MJRNN Trust, the Revocable
Trust, and his will.
In 1999, Phelan contacted his brother-in-law Anthony
D'Alexander and asked him to prepare an irrevocable life
insurance trust for him. The trust, known as the MJRNN Trust,
was to be funded with life insurance proceeds of $1.3 million and
3 No. 1-06-0820
it named, among others, the plaintiff and Wilson as
beneficiaries. Regarding the funding of a trust with proceeds of
a life insurance policy, section 2035 of the Tax Code (26 U.S.C.
§2035 (2006)) provides that if an individual owns or has
incidence of ownership in an existing life insurance policy and
gives the policy away within three years of his death, the
proceeds of the policy will be included in his estate. This is
true regardless of whether he transfers ownership to another
individual or to a trust. See 26 U.S.C. §2035 (2006). In
accordance with section 2035 of the Tax Code, the MJRNN Trust
provided that if Phelan died within three years of giving up
incidence of ownership of the insurance policies that formed the
corpus of the trust, the proceeds of those policies would be
distributed to the personal representative of the Phelan estate,
not the trustee of the MJRNN Trust.
At oral argument, the defendants' attorney explained that
one consequence of the three-year rule was that the Phelan estate
would be subject to a 50% estate tax that would reduce the value
of Phelan's insurance policies from $1.3 million to $650,000. He
further explained that the only way Phelan could have avoided the
ramifications of the three-year rule would have been to have
established the trust before he purchased the life insurance
policies. Phelan, however, had already purchased the life
4 No. 1-06-0820
insurance policies by the time he sought to create the
irrevocable trust so the application of the three-year rule was
unavoidable short of purchasing replacement insurance polices
after the creation of the MJRNN Trust.
Regarding Phelan's understanding of the three-year rule
provision of the MJRNN Trust, D'Alexander testified that he and
Phelan discussed the three-year rule and that Phelan understood
the consequences of that provision. In addition, Alan Bruggeman,
who prepared Phelan's will and Revocable Trust, testified in a
deposition that Phelan understood the consequences of the three-
year rule and that he only wanted to provide for the plaintiff
and Wilson through the MJRNN Trust and only if it succeeded. His
main concern was to provide for his minor sons.
Although the MJRNN Trust was dated June 1, 1999, D'Alexander
testified that it was not signed until sometime after that date.
Phelan died in November 2000, less than three years after the
transfer of the insurance policies to the MJRNN Trust. In
accordance with the three-year rule provision of the MJRNN Trust,
the proceeds of the trust were distributed to the personal
representative of Phelan's estate and none of the beneficiaries
under the MJRNN Trust received a distribution.
In May or June 2000, Phelan asked Bruggeman to review the
MJRNN Trust and prepare a will and trust for him. After
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discussing each provision of the will and the Revocable Trust,
Bruggeman faxed drafts to Phelan on July 7, 2000. Phelan signed
both documents and returned them to Bruggeman with some changes
made in ink. Bruggeman told Phelan that he would prepare clean
copies of each document for him to sign, but Phelan indicated
that drafts that were signed were sufficient.
The Trustee of the Revocable Trust was the residuary
beneficiary of Phelan's estate pursuant to Article IV of his
will. That pourover clause provided:
"I give the residue of my estate,
excluding any property over which I have a
power of appointment, to the trustee acting
under that certain [Revocable Trust] of John
Phelan dated July 7, 2000, to be added to the
principal held in trust thereunder as such
[Revocable Trust] exists as of the date of my
death to be administered pursuant to the
terms and conditions of said [Revocable
Trust] as they exist as of this date, which
terms and conditions are hereby expressly
incorporated by reference."
In his deposition, Bruggeman testified that he believed that
the Revocable Trust was funded on the date it was signed.
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Although he did not prepare any transfer documents, he testified
that he believed that a deed in trust had been prepared.
On July 7, 2000, Phelan signed the will in the presence of
Karen McGinnis, Barbara Vest, and Gwenda Landingham. He signed
the will in the general office area of the building where he
worked and each witness also signed it at that time. McGinnis
and Vest testified that Phelan signed more than one document that
day, but they only witnessed and signed the will. Vest also
testified that D'Alexander and Michael Gavin were not present
when the will was signed. The will was notarized by D'Alexander
sometime after it was signed in the presence of others.
Phelan signed the Revocable Trust in the presence of Gavin
and D'Alexander in his personal office. Gavin signed the trust
as a witness, while D'Alexander notarized it. Gavin testified
that he did not remember for certain when the trust was signed,
but noted that it was dated July 7, 2000. He also indicated that
he was not present when the will was signed.
Phelan's will was admitted to probate on January 8, 2001,
and Baskin was appointed supervised executor of the estate. On
July 6, 2001, the plaintiff filed a petition to contest the will
and trusts. Wilson filed a will contest, alleging that the
Revocable Trust was a forgery. Baskin moved to dismiss both
actions. The trial court granted the motion in part and allowed
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plaintiff and Wilson leave to amend their complaints.
On September 3, 2002, the plaintiff filed her first amended
complaint, requesting reformation and construction of the MJRNN
Trust. She also filed her amended petition regarding the
Revocable Trust and the will, consisting of five counts: (1)
reformation of the Revocable Trust; (2) lack of funding of the
Revocable Trust; (3) forgery of the Revocable Trust; (4)
declaratory judgment concerning the pourover clause of the will;
and (5) construction of the Revocable Trust. Wilson also filed
an amended contest, alleging forgery of the Revocable Trust. On
March 25, 2004, Wilson's will contest and count III of the
plaintiff's amended petition were dismissed by order of the trial
court.
The remaining parties then moved for summary judgment, which
the trial court denied. The case proceeded to trial. Following
the plaintiff's presentation of evidence, the defendants moved
for a finding in their favor pursuant to section 2-1110 of the
Code. On February 14, 2006, the trial court granted the motion
as to the plaintiff's amended complaint. The court held that the
reformation or construction of the MJRNN Trust was not
appropriate or possible because the trust had no funds. The
court also granted the motion as to count I of the amended
petition concerning reformation of the Revocable Trust.
8 No. 1-06-0820
On May 7, 2006, following trial, the trial court held: (1)
the Revocable Trust was not in existence as the time of the
execution of the will and, therefore, failed as a valid inter
vivos trust; (2) because the Revocable Trust was not in
existence, it could not be incorporated by reference into the
will and could not be considered a testamentary trust; (3)
because the residuary portion of the will consisted of the
pourover clause in favor of the Revocable Trust, that clause also
failed; and (4) the residuary portion of the estate was meant to
pass through the will, but because the Revocable Trust was not in
existence, the residue of the estate thereunder would pass
according to the laws of descent and distribution as if the
estate were intestate. The court made no findings concerning
counts II (lack of funding) and V (construction) of the amended
petition because the court's decision concerning count IV
(declaratory judgment of pourover clause of will) disposed of
those issues. This appeal followed.
ANALYSIS
I. Plaintiff's Appeal
In her appeal, the plaintiff argues that the trial court
erred in granting the defendants' section 2-1110 motion resulting
in the dismissal her amended complaint and count I of her amended
petition. Section 2-1110 of the Code provides:
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"In all cases tried without a jury,
defendant may, at the close of plaintiff's
case, move for a finding or judgment in his
or her favor. In ruling on the motion the
court shall weigh the evidence, considering
the credibility of the witnesses and the
weight and quality of the evidence." 735
ILCS 5/2-1110 (West 2002).
When ruling on a section 2-1110 motion, a trial court
applies a two-prong analysis. Under the first prong, the court
determines whether, as a matter of law, the plaintiff presented a
prima facie case. A plaintiff establishes a prima facie case
when she proffers some evidence on every element essential to her
cause of action. People ex rel. Sherman v. Cryns, 203 Ill. 2d
264, 275, 786 N.E.2d 139 (2003). Because this presents a
question of law, we review such a determination by the trial
court de novo. Under the second prong, the trial court acts as
the finder of fact to determine whether the plaintiff presented a
prima facie case at the close of her case under the totality of
the evidence. In re Estate of Goldstein, 293 Ill. App. 3d 700,
709, 688 N.E.2d 684 (1997). As finder of fact, the trial court
must weigh all the evidence and determine the credibility of the
witnesses and may draw reasonable inferences from the evidence
10 No. 1-06-0820
presented. Because the court also considers evidence that is
favorable to the defendant, the "weighing process may result in
the negation of some of the evidence presented by the plaintiff."
Cryns, 203 Ill. 2d at 276. After considering the totality of the
evidence, the court must determine whether there remains some
evidence as to each essential element of her cause of action.
Cryns, 203 Ill. 2d at 276. Under this second-prong inquiry, we
will not reverse a trial court's ruling on appeal unless it is
against the manifest weight of the evidence. Cryns, 203 Ill. 2d
at 276.
A. Standard of Review
In this case, the trial court did not specify whether its
decision to grant the defendants' section 2-1110 motion was
premised on the plaintiff's failure to present a prima facie case
or because, under the totality of the evidence, her
prima facie case did not survive. The parties disagree as to
which approach the trial court took. The plaintiff maintains
that the court held that the plaintiff failed to present a prima
facie case, while the defendants argue that the court considered
the weight and quality of the evidence. Because our disposition
is the same in either instance, we will apply the de novo
standard.
B. Reformation Claims
11 No. 1-06-0820
In her amended complaint and amended petition, the plaintiff
moved for the reformation of the MJRNN Trust and for the
reformation of the Revocable Trust. The plaintiff alleged that
Phelan wanted to provide for her and Wilson in his estate plan
and mistakenly believed that he did. She contends that because
Phelan's intentions were not carried out, he lacked understanding
of his overall estate plan and specifically of the effects of the
three-year rule provision of the MJRNN Trust and of the
provisions of the Revocable Trust.
In Handelsman v. Handelsman, 366 Ill. App. 3d 1122, 1132-33
852 N.E.2d 862 (2006), Justice Bowman of the Second District
examined the state of Illinois law regarding reformation of a
trust.
"Illinois courts have long held (with
narrow exceptions not pertinent here) that
'[a] will cannot be reformed to conform to
any intention of the testator expressed in
it, no matter how clearly a different
intention may be proved by extrinsic
evidence.' [Turek v. Mahoney, 407 Ill. 476,
482 ***; 95 N.E.2d 330 (1950); ***.]
***
We acknowledge that [the] reasoning
12 No. 1-06-0820
[against reformation of a will] does not
apply completely to will substitutes, as
there is no statutory requirement that they
be written, witnessed, and attested as wills
must be (see 755 ILCS 5/4-3(a) (West 2002)).
However, the effect of allowing the
reformation of a will substitute is similar
to that of allowing the reformation of a
will: to enable a stranger to the original
proceeding to 'make a will [substitute] for
the [settlor].' [Decker v. Decker, 121 Ill.
341, 357, 12 N.E.2d 750 (1887); ***]. ***
[E]ven in cases involving trusts that are not
will substitutes, Illinois courts have
stressed that the use of extrinsic evidence
to nullify the effect of unambiguous language
should be allowed 'only in extreme cases.' In
re Estate of McInerny, 289 Ill. App. 3d 589,
598[, 682 N.E.2d 284] (1997).
Because the plaintiff does not address or even note the
aversion in Illinois case law to reformation of trusts in
general, we limit our discussion to the legal question before us
- whether the plaintiff presented some evidence of Phelan's
13 No. 1-06-0820
mistaken belief that he provided for his adult daughters in his
estate plan, as the plaintiff contends.
As to the plaintiff's amended complaint regarding the MJRNN
Trust, we agree with the trial court that because the trust had
no funds, no reformation was possible. Accordingly, the
dismissal of the amended complaint was not error.
As to the plaintiff's claim seeking reformation of the
Revocable Trust in her amended petition, the plaintiff argues
that Phelan signed the Revocable Trust only because he was
mistaken in his belief that he had provided for his daughters in
the MJRNN Trust. We disagree.
The evidence was clear and ample that Phelan knew and
understood that the MJRNN Trust would fail if he died within
three years of establishing the trust. D'Alexander testified
that he discussed the three-year rule provision of the MJRNN
Trust with Phelan and that Phelan understood the provision and
its implications. Bruggeman also testified that Phelan
understood the ramifications of the three-year rule provision of
the MJRNN Trust and that his daughters would receive a bequest
only if the trust succeeded. While other drafting provisions may
have been available, the plaintiff presented no evidence that
Phelan did not understand the provision that was chosen. Because
Phelan was informed of, and understood the implications of, the
14 No. 1-06-0820
three-year rule specifically provided in a provision of the MJRNN
Trust, there is no evidence in the record of a mistaken belief on
Phelan's part regarding providing for his daughters in either
trust. Phelan knew that his adult daughters would not be
provided for if the MJRNN Trust failed when he signed the
Revocable Trust and the plaintiff did not present any evidence to
show otherwise. Accordingly, we find the trial court did not err
when it granted the defendants' section 2-1110 motion as to count
I of the amended petition at the close of the plaintiff's case in
chief.
II. Defendants' Cross-Appeal
In their cross-appeal, the defendants argue the trial court
erred in finding the Revocable Trust not in existence at the time
of the execution of the will. Alternatively, relying on section
4-4 of the Probate Act of 1975 (755 ILCS 5/4-4 (West 2002)), the
defendants argue that the incorporation of the Revocable Trust
into the will was not necessary to create a valid inter vivos
trust. Because we agree with the defendants as to their first
contention, we do not address their alternative argument.
The defendants contend that the trial court's factual
finding that the will was executed before the Revocable Trust was
signed "was not supported by the evidence, but was based on a
15 No. 1-06-0820
negative inference." However, little is made of this claim. The
defendants' principal contention is that the will and trust were
signed together, contemporaneously, and therefore, the Revocable
Trust was in existence when the will was executed. Without
disturbing the trial court's findings of fact, we find the trial
court's ruling that the Revocable Trust was not "in existence" at
the time the will was executed raises a question as to the legal
effect of the documents. This is a conclusion of law to which we
apply a de novo standard of review. See Eychaner v. Gross, 202
Ill. 2d 228, 252, 779 N.E.2d 1115 (2002).
B. "In Existence"
It has long been established that so long as certain
requirements are met, a will may incorporate by reference other
documents, including trusts, even where these documents were not
executed with the formality required for the execution of a will.
In re Estate of Meskimen, 39 Ill. 2d 415, 417, 235 N.E.2d 619
(1968). "A separate paper may under certain conditions be
incorporated into and become a part of a will. The rule as to
when such an instrument may be referred to in a will and become a
part thereof has been settled in this State since Keeler v.
Merchants Loan & Trust Co., 253 Ill. 528[, 97 N.E. 1061 (1912)],
where the authorities were thoroughly examined, and the rule
clearly established with the reason for each requirement."
16 No. 1-06-0820
Wagner v. Clauson, 399 Ill. 403, 409, 78 N.E.2d 203 (1948). A
document will be incorporated into a will where: (1) the will
itself refers to the document as being in existence at the time
of the execution of the will and in such a way as to reasonably
identify it and show the testator's intention to incorporate the
document in the will and make it part thereof; (2) the document
is in fact in existence at the time of the execution of the will;
and (3) the document corresponds to the description in the will
and is shown to be the instrument referred to therein. Meskimen,
39 Ill. 2d at 417-18. "All three requisites must coexist in
order to incorporate an extrinsic document into a will."
Meskimen, 39 Ill. 2d at 418.
In this case, the dispute centers on whether the Revocable
Trust was "in existence" at the time of the execution of the
will. The trial court held that because the Revocable Trust was
not signed before the will was executed, it was not "in
existence" for purposes of incorporation.
The evidence at trial established that all the controlling
events occurred on July 7, 2000. Bruggeman sent Phelan both the
will and the Revocable Trust via facsimile. The will was
executed in the presence of McGinnis, Vest, and Landingham in the
common area of Phelan's office building. The Revocable Trust was
signed in the presence of Gavin and D'Alexander in Phelan's
17 No. 1-06-0820
personal office. Thereafter, D'Alexander notarized both the
Revocable Trust and the will.
The defendants initially contend that the trial court's
finding that the will was signed before the Revocable Trust "was
not supported by the evidence, but based on a negative
inference." We do not agree. That the will was signed before
Phelan arrived at attorney D'Alexander's office where Phelan
signed the Revocable Trust is unassailable. The trial court's
finding that this was in fact the sequence of events is the only
conclusion that can be drawn from the evidence. However, the
real issue, and one we believe presents a question of law, is
whether the Revocable Trust, for purposes of incorporation, had
to be signed by Phelan to be "in existence" prior to the
execution of the will.
While section 4-3(a) of the Probate Act (755 ILCS 5/4-3(a)
(West 2002)) requires that "[e]very will shall be in writing,
signed by the testator or by some person in his presence and by
his direction and attested in the presence of the testator by 2
or more credible witnesses," the Trusts and Trustees Act (Trust
Act) (760 ILCS 5/1 et seq. (West 2002)) has no similar
requirement for trusts. Instead, the Trust Act merely provides
that a trust may be "created by will, deed, agreement,
declaration or other written instrument." 760 ILCS 5/2(1) (West
18 No. 1-06-0820
2002).
To support the trial court's holding that the Revocable
Trust was not in existence when the will was executed, the
plaintiff contends that a written trust must be signed to be "in
existence." The plaintiff invokes the doctrines of
noscitur a sociis and ejusdem generis to conclude that the phrase
"other written instrument" of the Trust Act necessarily requires
that written trusts be signed because "wills, deeds and written
agreements must be signed in order to be valid." The plaintiff's
argument is that because the Revocable Trust was not signed prior
to the execution of the will, the Revocable Trust was not valid
at the time the will was executed, and, therefore, the Revocable
Trust was not "in existence" so as to be incorporated by
reference into the executed will. Whether the plaintiff's
argument regarding the validity of a written trust is legally
sound, we need not resolve. But see Alexander v. Mermel, 27 Ill.
App. 2d 281, 287, 169 N.E.2d 569 (1960) (in Illinois a trust in
personal property need not be in writing); Catherwood v. Morris,
345 Ill. 617, 630, 178 N.E. 487 (1931) (no requirement that
trusts in personal property be proved by some writing signed by
the party declaring such a trust).
In our judgment, this case does not turn on any perceived
statutory requirement that a written trust be signed to be valid.
19 No. 1-06-0820
Rather, this case turns on the requirements of the doctrine of
incorporation by reference. See Harris Trust & Savings Bank v.
Beach, 145 Ill. App. 3d 682, 689, 495 N.E.2d 1173 (1986). The
test for determining whether an extrinsic document may be taken
as part of the will has been settled since 1912 when Keeler was
decided. The test stems "'[f]rom the proposition that a will may
be written upon different pieces of paper *** [so] that a will
may by reference incorporate into itself, as completely as if
copied in full, some other paper which in itself is not a will
for lack of execution.'" Keeler, 253 Ill. at 535, quoting W.
Page, Page on Wills, §§162, 163, at 183 (1901). The requirement
that such a "paper" be in existence at the time of the execution
of the will is also explained: "'If this were not the rule,
testator could, by executing a will and incorporating therein a
document to be executed in the future, create for himself a power
to dispose of his property in a testamentary manner by an
instrument not executed in accordance with the Statute of
Wills.'" Keeler, 253 Ill. at 536, quoting W. Page, Page on
Wills, §§162, 163, at 184 (1901). Based on this long-established
authority, our inquiry is limited to whether the test for
incorporation of an extrinsic document into a will has been met
here. If so, then the extrinsic document, the Revocable Trust in
this case, is incorporated into the will "as if copied in full."
20 No. 1-06-0820
The plaintiff's argument that the Revocable Trust was not
"in existence" because it was not signed when the will was
executed is premised upon her challenge to the Revocable Trust's
validity as a trust. Yet, no authority is presented for the
contention that the validity of the trust must be established for
it to be "in existence" for incorporation purposes, and our
research has discovered none. Why the phrase "in existence"
should be construed to mean something beyond its ordinary common
meaning is unstated by the plaintiff. Certainly, the Revocable
Trust had to be "in existence" in a literal sense before it could
be signed. Why the Revocable Trust's existence for incorporation
purposes should only begin with the testator's signature is
unclear; we can think of no good reason and the plaintiff has
offered none.
The two testamentary documents were sent to the testator in
a simultaneous manner; he treated each as part of his total
estate plan; each was notarized by the same attorney on the same
date, so that each, the Revocable Trust and the pourover will,
was signed contemporaneously with each other. Under these facts
we find that the Revocable Trust was in existence at the time the
pourover will was executed. While the plaintiff contends that
the two documents were not signed contemporaneously, she points
to no evidence to the contrary. Nor did the trial court find
21 No. 1-06-0820
that the documents were not signed contemporaneously. The trial
court relied only on the sequence of the signing, that the will
was signed before the Revocable Trust was signed, as the basis
for its ruling. The law does not require the trust be signed
before the will, where each is signed contemporaneously with the
other, in order for the trust to be "in existence" for
incorporation purposes. See Eschmann v. Cawi, 357 Ill. 379, 382,
192 N.E. 226 (1934) (for incorporation purposes, "[i]t makes no
difference that the instrument *** has been defectively executed
and not attested, if the [will] itself has been executed and
attested according to law and contains proper reference to the
other instrument"). It was mere happenstance that the will was
signed before the Revocable Trust. Such happenstance is not
enough to undo the estate plan Phelan so carefully devised to
provide for his sons and wife where the long-established test for
incorporation of an extrinsic writing into a will has been
satisfied. The test itself is a demanding one that must be
satisfied completely in order to make out a case for
incorporation.1 See Clauson, 399 Ill. 403 (1948) (extrinsic
1 In fact, it is "generally assumed that section 43(a) [now
section 4-4 of the Probate Act] was enacted because *** bequests
to a trust which has been amended after the date of the will ***
22 No. 1-06-0820
document bore a later date than will); Bottrell v. Spengler, 343
Ill. 476, 175 N.E. 781 (1931) (no showing that deeds conveying
real estate were intended to be part of will); Meskimen, 39 Ill.
2d at 417-18 (inter vivos trust independently significant so as
not to be incorporated in will although referenced). We are
aware of no authority requiring that the requisites for
incorporation of a trust in a will be expanded to include an
examination as to the trust's validity, as the plaintiff urges,
under the Trust Act.
Even if we were to look to the Trust Act for guidance, the
Act presents no obstacle to our holding. Section 18 of the Trust
Act mandates that the Act shall be liberally construed. 760 ILCS
5/18 (West 2002). Requiring that a trust be signed before it may
be "in existence" for purposes of being incorporated into a will
would be a narrow, rather than a liberal, reading of the Act. In
this regard we note that the plaintiff does not challenge the
validity of the Revocable Trust as it exists in the record, both
signed and witnessed.2 Her contention is limited to the timing
would be impossible under the strict rules of incorporation by
reference." Meskimen, 39 Ill. 2d at 421. 2 We do not consider the plaintiff's separate contention,
which we address below, that the Revocable Trust was not "in
23 No. 1-06-0820
of its signing vis-a-vis the will.
On the record before us, there is no question but that all
three requisites of the Keeler test coexist here to incorporate
the Revocable Trust into the will. Phelan's will refers to the
existence of the Revocable Trust, reasonably identifying it and
demonstrating Phelan's intention to make the Revocable Trust a
part of the will. The existence of the Revocable Trust at the
time of the execution of the will is amply spread of record from
the point it was faxed with the will to Phelan on July 7, 2000.
Finally, the Revocable Trust corresponds exactly to the trust
referenced in Phelan's will. This is not a case where the
testator sought to incorporate into a will a trust he would form
later. Phelan was in possession of the Revocable Trust when he
signed his will. Phelan signed the Revocable Trust before the
will and the Revocable Trust were notarized by D'Alexander, one
immediately after the other.
Our disposition is further supported by the underlying goals
of testamentary construction -- to give affect to the testator's
intention and avoid intestacy. See Wise v. First National Bank,
10 Ill. 2d 623, 627, 141 N.E.2d 1 (1957); In re Estate of Stern,
existence" because it was not funded at the time it was signed as
a direct challenge to its validity.
24 No. 1-06-0820
263 Ill. App. 3d 1002, 1009, 636 N.E.2d 939 (1994) (clear intent
of legislature in enacting section 4-4 of Probate Act was to
prevent intestacy). Phelan had an estate plan. Although the
MJRNN Trust failed, its failure was anticipated in Phelan's
estate plan. The incorporation of the Revocable Trust into his
will was the foundation of his estate plan.
The plaintiff also argues that the Revocable Trust was not
"in existence" because, as she claims, it was not funded at the
time Phelan executed his will. This claim likewise seeks to
expand the test for incorporation to add an element that the
trust be funded in order for it to be "in existence" to be made a
part of the will. We reject this claim for the same reasons set
out above. We have been presented with no authority that
requires a trust be funded in order to be "in existence" so as to
be made a part of a will.
We find as a matter of law that the trial court erred in
ruling that the Revocable Trust was not in existence for purposes
of incorporation into the pourover will. Accordingly, we reverse
the trial court's order that the Revocable Trust failed and that
the pourover clause of the will failed.
CONCLUSION
In summary, we affirm the order of the trial court
dismissing the plaintiff's amended complaint and count I of her
25 No. 1-06-0820
amended petition. We reverse the trial court's order finding the
Revocable Trust and pourover clause of the will failed. Because
the trial court did not enter a ruling on counts II and V of the
plaintiff's amended petition, we remand for further proceedings
consistent with this opinion.
Affirmed in part and reversed in part; cause remanded.
McBRIDE, P.J., and R. GORDON, concur.