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In Re Estate of Wilkening

OPINION FILED OCTOBER 15, 1982.

IN RE ESTATE OF SARAH M. WILKENING, DECEASED. — (ROBERT F. BOHNE, EX'R OF THE ESTATE OF SARAH M. WILKENING, DECEASED, PLAINTIFF-APPELLANT,

v.

THORD C. NICHOLSON, DEFENDANT-APPELLEE.)



Appeal from the Circuit Court of Cook County; the Hon. H. Budzinski, Judge, presiding.

JUSTICE WILSON DELIVERED THE OPINION OF THE COURT:

This is a consolidated appeal arising out of the creation of joint tenancy accounts (Ill. Rev Stat. 1981, ch. 76, par. 2) at two separate Illinois banking institutions. *fn1 Plaintiff, executor of the estate of Sarah M. Wilkening, appeals from judgments entered against it upon motions for judgment filed in each separate action by defendant, Thord C. Nicholson, pursuant to section 2-1110 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-1110, formerly Ill. Rev. Stat. 1981, ch. 110, par. 64(3)). In each case, the trial court held that a fiduciary relationship did exist between Sarah and Nicholson; how ever, the existence of a fiduciary relationship between joint tenants did not in itself serve to rebut the presumption of donative intent and shift the burden of proof to the surviving joint tenant. Instead, it was incumbent upon the estate to prove that the relationship had been abused or that a confidence of decedent had been betrayed.

On appeal, the estate contends that: (1) proof of a fiduciary relationship between joint tenants rebuts the presumption of donative intent and shifts the burden to the surviving joint tenant to prove good faith and fair dealing; (2) the presumption of donative intent is overcome by the fact that Sarah held the disputed funds in trust and thus could not have had the requisite donative intent at the time the accounts were created; and (3) the accounts were created as convenience accounts for Sarah's benefit with no intent to make a gift to Nicholson. For the reasons that follow we affirm the trial court's judgment.

Sarah Wilkening, an elderly spinster, owned and resided on a 105-acre farm in Schaumburg, Illinois, as tenant in common with her unmarried brother, Walter. Sarah and Walter did not have a close brother-sister relationship and neither was socially active with friends or relatives.

In 1951, Thord Nicholson and his family purchased the farm adjacent to the Wilkening farm and lived there until 1974 at which time Nicholson sold his farm and moved to a nearby suburb. During the period from 1951 to 1974 Sarah and the Nicholsons developed a close friendship which continued until Sarah's death. Sarah relied regularly on Nicholson to drive her places and she also discussed various personal business matters with him. In addition to helping Sarah, the Nicholsons visited her socially at least once a week and on a daily basis when she was hospitalized in January 1979. At no time did the Nicholsons receive any monetary compensation for their services.

In 1974, Sarah and Walter decided to sell their farm, and, in that regard, asked Nicholson to recommend an attorney. Nicholson recommended Francis Sweet, who had negotiated the sale of his farm earlier that year. Sarah asked Sweet to keep Nicholson informed of all correspondence regarding the real estate transaction. When asked to do so, Nicholson would explain certain aspects of the sale to Sarah and offer his advice. The record indicates, however, that Sarah fully understood the nature of the negotiations and merely sought Nicholson's advice as a friend who had recently engaged in a similar real estate transaction. Nicholson received no compensation for the advisory services. Furthermore, although Sweet also drew up Sarah's will and handled other business matters for Sarah, Nicholson was not privy to the particulars of those matters.

On December 3, 1977, Sarah asked Nicholson to drive her to Palatine Savings and Loan Association (PS&L), Palatine, Illinois, where she closed out one savings account and opened a joint account with Nicholson. During the same visit Sarah transferred an existing certificate of deposit to joint tenancy with Nicholson. *fn2

Subsequently, on December 19, 1977, Sarah and Walter executed a real estate sale contract with Thomas Origer, at which time Origer issued separate earnest money checks to Sarah and Walter, each in the amount of $50,000. The following day Sarah asked Nicholson to drive her to the PS&L where she opened another savings account as joint tenant with Nicholson, with right of survivorship, and not as tenants in common. The record indicates that Sarah understood the nature of joint tenancy accounts and completed the transaction without the aid or advice of Nicholson. Sarah deposited $40,000 of the $50,000 she had received from Origer into the savings account and received a cashier's check for the remaining $10,000.

Sarah then asked Nicholson to drive her to Palatine National Bank (PNB) where she opened a checking account in her name only and another savings account as joint tenant with Nicholson, with right of survivorship, not as tenants in common. Sarah deposited $1,000 into the checking account and $9,000 into the joint tenancy savings account. The record indicates that the accounts at both PS&L and PNB were opened pursuant to written agreement in full compliance with statutory law.

On November 8, 1978, the Wilkenings and Origer entered into an agreement to extend the closing date of the sale of the farm. As consideration for the extension, Origer again issued separate checks to Sarah and Walter, each in the amount of $50,000. A few days later, Sarah asked Nicholson to drive her to PNB where she purchased a $50,000 certificate of deposit as joint tenant with Nicholson, pursuant to written agreement, with right of survivorship, not as tenants in common. The record indicates that Sarah understood the nature of the transaction and that Nicholson offered no advice or direction.

In January 1979, Sarah, age 82, suffered a stroke whereby she lost all ability to communicate. She was immediately hospitalized and died in the hospital on February 25, 1979, without ever having regained any communicative abilities. While Sarah was hospitalized, Walter located the joint account passbooks and gave them to Nicholson. Nicholson paid Sarah's hospital bills from one of the accounts, made a deposit on a nursing home, and paid Sarah's burial expenses. Approximately one month after Sarah's death, Walter died of natural causes. At that time, Nicholson paid Walter's property insurance premiums, his estate insurance and all his burial expenses with funds from one of the joint accounts.

Sarah's will was admitted to probate on March 26, 1979. Nicholson was not a beneficiary under the will; however, he was designated successor executor. As surviving joint tenant, Nicholson filed suits against PNB, PS&L and Schaumburg State Bank *fn3 seeking the funds in the joint accounts he owned with Sarah.

OPINION

The first issue presented for review is whether proof of a fiduciary relationship between joint tenants rebuts the presumption of donative intent and shifts the burden to the surviving ...


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