Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In Re Estate of Montgomery

JANUARY 10, 1972.

IN RE ESTATE OF BERNICE DILLON MONTGOMERY, DECEASED — (EARL L. MONTGOMERY, ADMR., PETITIONER-APPELLANT,

v.

ANDRICE F. MICHAELS, ET AL., RESPONDENTS-APPELLEES.)



APPEAL from the Circuit Court of Lake County; the Hon. LAVERNE A. DIXON, Judge, presiding.

MR. JUSTICE ABRAHAMSON DELIVERED THE OPINION OF THE COURT:

This appeal is prosecuted from an order entered February 18, 1971, by the Circuit Court of Lake County that dismissed the appellant's petition to discover and recover certain assets brought by him as administrator of the estate of his deceased wife, Bernice Dillon Montgomery and individually pursuant to Section 183 of the Probate Act (Ill. Rev. Stat., 1969, ch. 3, sec. 183)

On September 1, 1970, Letters of Administration were issued to Earl L. Montgomery, the appellant, in the estate of his deceased wife. On September 10, Montgomery petitioned the court for issuance of citations on the First National Bank of Chicago and the First National Bank of Highland Park relative to certain savings accounts established at those institutions by the decedent in her name as trustee for the benefit of Andrice Fleming Michaels and Robert Dillon Fleming, her children by a prior marriage. Citation writs and summons were issued pursuant to the petition and a hearing held on November 5, 1970.

The passbooks, ledger sheets and signature cards of the particular accounts were admitted into evidence on the stipulation of the parties. Those records indicate that four separate accounts had been established at the First National Bank of Chicago, each in the name of Bernice Dillon Montgomery as Trustee. Two of those accounts, in the aggregate amount of $16,552.15, provided on the signature card that the deposits in the account were made for the benefit of Andrice Fleming Michaels "to whom or to whose legal representative said deposits or any part thereof, together with the interest thereon, may be paid in the event of the death of the . . . trustee." The two other accounts at the First National in Chicago, in the same amount, provided that they were for the benefit of Robert Dillon Fleming with identical provisions in regard to payment after the death of the trustee.

Two of the accounts at the First National Bank of Highland Park, each in the amount of $6,033.74, were in the name of the decedent as trustee for the benefit of, and payable on her death to, Andrice Michaels and Robert Fleming respectively. The last two accounts, also at the Highland Park bank, were each in the amount of $8,822.98 and in the name of the decedent as trustee for the two children but with no specific provision as to payment after her death.

In his petition, the appellant alleged that the trusts were "illusory and invalid" since his wife had full control over the accounts during her lifetime and possessed all the incidents of complete ownership including the right to withdraw all of the funds deposited at any time. He further alleged that the trusts constituted virtually all of his wife's assets and were a fraud on his marital rights and that he should be accorded the same rights to the accounts that he would have if they were held in her own name.

At the conclusion of the hearing, the trial court took the matter under advisement and then entered the order from which this appeal was taken. That order found that the trusts were not illusory and ordered the two banks to pay the funeral bills of the decedent and distribute the balance of the proceeds to the named beneficiaries.

The Supreme Court, in 1965, ruled that "Totten" trusts (so-called from the case of Matter of Totten, 179 N.Y. 112, 71 N.E. 748) were valid in Illinois in the case of In re Estate of Petralia (32 Ill.2d 134). In that case, Antonio Petralia opened a savings account on November 8, 1948 at the First National Bank of Chicago as trustee for the benefit of his daughter, Domenica DiMaggio. The signature card provided:

"All deposits in this account are made for the benefit of Domenica DiMaggio.

To whom or to whose legal representative said deposits or any part thereof, together with the interest thereon, may be paid in the event of the death of the undersigned Trustee."

The evidence showed that Petralia kept the savings account passbook in his possession and made deposits and withdrawals from the account during his lifetime. The administrator of his estate contended that the mere execution of the signature card was insufficient to create a valid trust and that Petralia had attempted to make a testamentary disposition of the account without conforming to the statute of wills. The Supreme Court rejected that contention and said as follows:

"It is true that Antonio Petralia, as settlor and trustee, retained extensive control over the savings account trust which he established. However, in this respect it is not significantly different in substance from other revocable inter vivos trusts which have been held valid in this and other jurisdictions. (citations omitted). The nature of the beneficiary's present interest under such trusts is well stated in I Scott, The Law of Trusts, 353-354:

`The declaration of trust immediately creates an equitable interest in the beneficiaries although the enjoyment of the interest is postponed until the death of the settlor, and although the interest may be divested by the exercise of the power of revocation.' The fact that the beneficiary's actual enjoyment of the trust is contingent on Antonio Petralia's death without first having revoked the trust by withdrawing the balance in the account does not negate the existence of a present interest in the plaintiff during her father's lifetime, even though that interest may have been highly destructible.

We conclude that the instrument executed by Antonio Petralia on November 8, 1948, was sufficient to create a valid and enforceable inter vivos savings account trust. In so holding we accept the position adopted by the American Law Institute in Sec. 58 of the Restatement (Second) of Trusts: `Where a person makes a deposit in a savings account in a bank or other savings organization in his own name as trustee for another person intending to reserve a power to withdraw the whole or any part of the deposit at any time during his lifetime and to use as his own whatever he may withdraw, or otherwise to revoke the trust, the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.