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Wheaton Nat'l Bank v. Aarvold

OPINION FILED MAY 28, 1976.

WHEATON NATIONAL BANK, TRUSTEE, PLAINTIFF-APPELLEE,

v.

LORRAINE AARVOLD, DEFENDANT-APPELLANT — (THE SAVINGS AND PROFIT SHARING PENSION FUND OF SEARS ROEBUCK & COMPANY EMPLOYEES ET AL., DEFENDANTS; MICHAEL AARVOLD, A MINOR, ET AL., DEFENDANTS-APPELLEES).



APPEAL from the Circuit Court of Du Page County; the Hon. BRUCE FAWELL, Judge, presiding.

MR. JUSTICE HALLETT DELIVERED THE OPINION OF THE COURT:

The appellant and appellees in this case are all claiming to be entitled, directly or indirectly, to the proceeds of a life insurance policy on the life of John O. Aarvold, Jr., and to the stock and cash due under a Sears Roebuck and Co. Savings and Profit Sharing Fund. Both the policy and the Fund listed as the designated beneficiary the Wheaton National Bank as trustee under trust 1231 dated September 27, 1967. In February, 1969, another trust agreement, given the same number, "revoked and terminated" the prior agreement and was substituted for it. The appellant contends that because of the "revocation" the designated beneficiary no longer exists and accordingly the funds must be paid to the estate of the deceased. The trial court ruled that the second trust agreement (which deleted the name of his first wife, Nancy Aarvold, as one of the beneficiaries) merely modified the first and awarded the funds to the trustee. We agree and affirm.

On September 27, 1967, the decedent John Aarvold, Jr., and the plaintiff Wheaton National Bank signed a written trust agreement which provided in part that the insured had delivered to the bank certain insurance policies but retained the right to change the beneficiary, borrow on the policies, pledge or assign them, surrender them, or exercise any other option under them as well as to remove them from the trustee's custody, that the decedent's wife, Nancy, and his children were the beneficiaries of the trust and that the trust was revocable. The bank of course was named the trustee. The trust created by this agreement was given the trust number 1231.

On September 27, 1967, a new designation of beneficiary for the Savings and Profit Sharing Pension Fund of Sears, Roebuck and Company Employees was completed which designated the primary beneficiary to be:

"III. NEW DESIGNATION OF BENEFICIARY.

I hereby revoke all my previous designations of primary and contingent beneficiaries and release THE SAVINGS AND PROFIT SHARING PENSION FUND OF SEARS, ROEBUCK AND CO. EMPLOYES (herein called the Fund) from liability thereunder, and designate below my beneficiary or beneficiaries under the Fund who shall be entitled to receive the credits remaining in my Fund account at the date of my death, all in accordance with and subject to the Rules and Regulations of the Fund.

A. PRIMARY BENEFICIARY OR BENEFICIARIES:

WHEATON NATIONAL BANK, 111 N. Hale, as Trustee(s), or its, his, her or their successor Trustee(s), under an AGREEMENT AND DECLARATION OF TRUST bearing date of September 27, 1967, executed by me, as Settlor, and the said WHEATON NATIONAL BANK as Trustee(s), creating the trust known as TRUST NUMBER 1231'."

Also, on September 27, 1967, a new beneficiary designation was made for the life insurance. It provided:

"In accordance with the conditions of Group policy number 19100G, I hereby revoke any previous designations of beneficiary and contingent beneficiary (if any) and designate as beneficiary, in the event of my death, in certificate number 349234 WHEATON NATIONAL BANK 111 NORTH HALE STREET, WHEATON, ILLINOIS and successor in trust, as trustee under — TRUST NO. 1231 bearing the date of September 27, 1967, executed by me and by WHEATON NATIONAL BANK."

On February 14, 1969, the two parties executed a new trust agreement which by its terms provided that "the agreement between Insured and the Trustee dated September 27, 1967, is hereby terminated, and the agreement as hereinafter set forth shall be substituted therefor." The only important change in the trust agreement was to eliminate Nancy Aarvold as a beneficiary of the trust. As in the first trust it was provided that the insured had delivered the policies of insurance to the trustee and was causing the death benefits to be made payable to the trustee. The trust number remained 1231.

On March 7, 1969, the decedent also executed a new will. His personal effects were bequeathed to his children. The residue of the estate was devised to the trustee under the 1969 insurance trust agreement.

• 1 In the fall of 1969, apparently, Nancy and John Aarvold were divorced. When Nancy demanded that the minor children be made irrevocable beneficiaries of the insurance policy and profit sharing and pension plan, the decedent wrote that "my trust agreement should satisfy this." There was, however, no stipulation to this effect in the divorce decree.

Sometime between the divorce and his death on May 3, 1971, the decedent married the defendant Lorraine Aarvold. Because she was not mentioned in the will, Lorraine renounced it and claims one-third of the estate. She contends that the designated beneficiary of the policy and trust agreement ...


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