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In Re Estate of Gandolfi

OCTOBER 28, 1970.

IN RE ESTATE OF MERIEN GANDOLFI, DECEASED — (KATHRYN PUCCI, APPELLANT,

v.

ROSE MARCHETTI, EXECUTOR, ET AL., APPELLEES.)



APPEAL from the Circuit Court of Bureau County; the Hon. HOBART W. GUNNING, Judge, presiding.

MR. JUSTICE ALLOY DELIVERED THE OPINION OF THE COURT:

This cause is before us on appeal from an order of the Circuit Court of Bureau County approving the executor's report of Rose Marchetti, executor of the will of Merien Gandolfi, deceased. The executor had reported that she divided a certain joint savings account among five daughters in accordance with oral instructions given to her by the decedent during her lifetime. Kathryn Pucci, a daughter and a residuary legatee, who had been omitted in the distribution of the joint tenancy account, filed objections to the report claiming that the bank account should have been distributed to the residuary legatees under the will.

In March 1956 Merien Gandolfi, a widow with six daughters, opened a savings account in the Spring Valley City Bank in the sum of $5,240. The account was set up in the joint names of Merien Gandolfi and Rose Marchetti (one of the daughters) as joint tenants and a joint tenancy signature card was signed. All parties to the present controversy agreed that a valid joint tenancy account was set up and that it was the intent of Merien Gandolfi that upon her death the balance in such account was to pass to Rose Marchetti. Mrs. Gandolfi died January 8, 1967. Her will, dated August 21, 1957, left the residue of her estate equally to her six daughters. Mrs. Gandolfi had made no changes in the joint ownership of the joint tenancy bank account from the time it was opened, but she did make additions to the account and withdrew interest so that on the date of her death there was $10,000 in the account. It was agreed by the parties that only Mrs. Gandolfi's money went into the joint account.

Rose Marchetti, executor of Mrs. Gandolfi's will inventoried the joint tenancy savings account of $10,000 as part of the estate assets. In her final report, however, she showed that she distributed the proceeds of such account 1/5th to each of her four sisters and 1/5th to herself under the oral directions from Mrs. Gandolfi at the time of the establishment of such account. The remaining daughter, Kathryn Pucci, was not to share in such account. It was shown that Kathryn Pucci had not been to visit her mother for eight years before her mother's death.

All parties agreed that the decedent, Mrs. Gandolfi, had given oral instructions to Rose Marchetti, the surviving joint tenant in the savings account, that Rose Marchetti was to distribute the balance in the account on the death of Mrs. Gandolfi to the five named daughters excluding Kathryn Pucci. The trial court made a finding of fact, which both parties agree is correct. The findings stated that when the account was established on March 12, 1956 (after the death of the father of the sisters), Merien Gandolfi had instructed Rose Marchetti, and Rose had agreed with her mother, that if there was any money in the account after Mrs. Gandolfi's death it was to be divided among the five daughters, excluding Mrs. Pucci. The objection filed by Kathryn Pucci contended that the savings account should be distributed as part of the residue of the estate to all six daughters under the decedent's will. The trial judge found that Rose Marchetti took valid legal title to the $10,000 joint tenancy account and that such fund was impressed with an express trust to distribute the balance of the account to the five daughters.

The question before the Court is whether the trial judge was correct in approving the final report and confirming the trust in favor of the five children of Mrs. Gandolfi. The real issue is whether there was sufficient proof of a valid oral trust in favor of the five children of the decedent Mrs. Gandolfi, or whether or not such trust was invalid on the theory asserted by appellant (that is constituted a testamentary disposition and, as such, must be executed in compliance with the Statute of Wills of this State).

It is unquestioned from the record that a joint account was created by Mrs. Gandolfi with Rose Marchetti; that it was the intention of Mrs. Gandolfi that upon her death the joint account balance was to pass directly and absolutely to Rose Marchetti; and that Rose Marchetti was to distribute such funds to the five sisters. None of the parties dispute that Mrs. Gandolfi had made such arrangement with Rose Marchetti and that Rose Marchetti was to manage the account and pay bills with it, and that the balance remaining at the time of the death of Mrs. Gandolfi was to be distributed to the five daughters.

• 1 In this State oral trusts of personal property have been upheld as being valid (Maher v. Aldrich, 205 Ill. 242). In Maher v. Aldrich, 205 Ill. 242, a Mr. King transferred personal property consisting of cash and corporate stock to a Lillie B. Maher with the oral stipulation that the property was to be held by Lillie as trustee to pay the income to four people and to the survivor of them. When an action was filed to establish the trust, it was argued that the trust was invalid since it was not in writing as required by the Statute of Wills. The court upheld the validity of this oral trust and stated (at page 255):

"The bill is framed upon the theory that a parol trust in personal property was created, and the property thus set aside was invested by the trustee in the property the income of which is now sought to be reached, and that the original trust thereby became impressed upon the property now held by the trustee, and this contention having been sustained, the Statute of Frauds does not apply, for the reason, as has been already suggested, that a verbal trust in personal property may be created by parol, (Price v. Laing, 152 Ill. 380,) and when such trust is established it is well settled the beneficiaries of such fund may follow the fund into all forms of investment which it may assume. Breit v. Yeaton, 101 Ill. 242."

In Catherwood v. Morris, 345 Ill. 617, the Illinois Supreme Court again indicated that trusts may be established by parol evidence if the evidence to establish the trust is clear and convincing. In that case the court determined that the proof was not sufficient to establish clearly and convincingly that personal property was taken upon an express trust. Apparently, both parties to this appeal agree that there was an express trust with Rose Marchetti as trustee created by oral agreement and they also agree as to the terms of such trust. The sole area of contention is whether the trust is testamentary in nature or whether it was an inter vivos trust, not requiring compliance with the Statute of Wills.

When Mrs. Gandolfi put the account in her name and Rose's name as joint tenants, she made an appropriate legal transfer of an interest in the account to Rose Marchetti and thus gave up some rights to the account. As stated in Frey v. Wubbena, 26 Ill.2d 62, where the question was raised as to whether it was appropriate to place property in joint tenancy in creating an inter vivos gift (the court said at page 71):

"Defendants contend that the placing of title to the various assets in joint tenancy did not create valid inter vivos gifts. This is predicated primarily upon the theory that there was lack of donative intent and that the purpose was to use joint tenancy as a device for testamentary disposition. Secondarily, it is asserted that the donor did not part with control over the property and hence there was no irrevocable delivery."

The court went on to find (at page 72):

"We turn to the question of whether the acts of the intended donor amounted to consummation of his intent to make inter vivos gifts. In addition to donative intent, other elements must be present. The donor must part with exclusive dominion and control over the subject of the gift and there must be delivery. The decedent surrendered his exclusive right to the several items when he voluntarily placed ownership in himself and others. The rights of the co-owners were equal to his own and by the transfer of his funds into joint-tenancy obligations he gave up exclusive dominion and control. Each of the co-owners has an equal right to possession of the evidence of ...


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