APPEAL from the Circuit Court of Adams County; the Hon. J.
ROSS POOL, Judge, presiding.
MR. JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:
Inheritance tax question.
Stock held in joint tenancy.
Can a resulting trust be imposed and thus avoid the tax?
The solitary issue in this case is whether certain assets held in joint tenancy should be included in the taxable estate of a decedent where the surviving joint tenant contends that the decedent held the property on resulting trust for the benefit of the survivor. Marjorie Wilson died July 14, 1973. Subsequently, her husband and surviving joint tenant, Elmer Wilson, was appointed executor under her will and, in that capacity, filed an Illinois inheritance tax return on June 13, 1974. Although he listed certain joint tenancy property on the appropriate schedule, he claimed that it was for informational purposes only and not property which was subject to taxation in Marjorie's estate.
The Attorney General filed objections to the return, arguing that section 1(5) of the Illinois inheritance and transfer tax law (Ill. Rev. Stat. 1973, ch. 120, par. 375(5)) is specifically intended to cover joint tenancy. He then argues that since it was not disputed that the property was held in joint tenancy, the inheritance tax was properly assessed and any extraneous circumstances regarding contributions or equitable ownership are irrelevant.
The executor's position, however, is that, although the property was held in joint tenancy at the time of his wife's death, the court can properly go behind the bald title to consider circumstances which show a resulting trust.
The circuit court agreed with the executor that it could inquire into the question of whether the decedent held the property on resulting trust, but sustained the State's objection to the return because it found that the facts did not support a conclusion that the property was held on resulting trust.
It is to be particularly noted that these facts are not in dispute since the parties stipulated to them.
Elmer and Marjorie Wilson were married on October 17, 1931. Marjorie brought no assets into the marriage, was never employed during the marriage, nor did she receive any assets from outside the marriage. At the time of her death she owned 525 shares of Moorman Manufacturing Company stock individually and another 1,610 shares were registered to "Elmer H. Wilson and Marjorie D. Wilson, his wife, in joint tenancy with right of survivorship." No Moorman stock was registered in Elmer's name alone. The purchase price for the 1,610 shares registered in joint tenancy form was contributed by Elmer and, at the time of purchase, he did not intend to make a gift of any present interest to Marjorie. He did intend for her to receive the stock should she survive him.
Elmer selected the joint tenancy form of registration with the understanding that it would provide for a simpler, less expensive means of transfer to his wife if he predeceased her. He wanted to insure that she received the stock on his death but he did not want her to have any present interest. All dividend checks on the 1,610 jointly titled shares were made payable to "E.H. Wilson." The shares were voted by Elmer alone and Marjorie never signed a proxy for these shares. In contrast, dividend checks on the shares registered in Marjorie's name alone were made payable to her and she always signed proxies for those shares.
The bylaws of the Moorman Manufacturing Company required its directors to own stock in the company. Elmer became a director on May 11, 1943, general manager on October 5, 1943, and continued with the company until 1957. After February 1946, the only shares in the company owned by Elmer were the 1,610 shares registered in joint tenancy. Elmer believed, however, that these shares were his alone.
The majority of the shares of Moorman stock registered in Marjorie's name alone came to her in 1947 from C.A. Moorman, then president of the company. Moorman desired to make a gift of the shares to Elmer. Elmer, in the belief that he was already the owner of a great deal of ...