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Halas v. Executor of Estate of Halas

OPINION FILED FEBRUARY 14, 1983.

THERESE M. HALAS ET AL., PETITIONERS-APPELLANTS,

v.

EXECUTOR OF THE ESTATE OF GEORGE S. HALAS, JR., DECEASED, RESPONDENT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. Charles Fleck, Judge, presiding.

JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 14, 1983.

Petitioner, Therese M. Halas, appeals from the dismissal of three petitions whereby she sought to have certain trust amendments declared invalid, to increase the amount of child support awarded in dissolution of marriage proceedings, and to set aside and vacate certain provisions of a judgment for dissolution of marriage. Thomas Chuhak, guardian ad litem appointed to represent the interests of two minor children, was granted leave to intervene. He joined Therese in the first two petitions, but opposed the latter.

On appeal, petitioner and the guardian ad litem contend (1) the trial court erred in finding that a partial revocation and an amendment of a trust were valid, and (2) petitioner should have been granted an increase in child support. Additionally, petitioner contends the trial court erred in dismissing with prejudice her section 72 petition to vacate portions of a judgment for dissolution of marriage.

We affirm in part, reverse in part, and remand.

Therese and George M. Halas, Jr., were married in 1963. Two children were born during the marriage. In 1975, Therese and George were divorced. George Halas, Jr., died on December 16, 1979. At the time of his death, he was married to Patricia Navalio Halas, whom he had wed in 1978.

The judgment for dissolution of marriage incorporated a settlement agreement entered into by the parties, each of whom was represented by counsel during the settlement negotiations. Part of the settlement agreement provided that decedent was to pay petitioner $50,000 as alimony in gross during the first year after the divorce and $35,000 per year for up to nine years thereafter. The alimony in gross payments also included child support. The parties also agreed that alimony in gross payments would continue after decedent's death. Paragraph 5 of the settlement agreement insured continued payments and provided as follows:

"The husband further covenants and agrees that he will keep and maintain in full force and effect insurance upon his life by doing any and all things necessary thereto in any amount no less than the unpaid balance of the alimony in gross due and owing the wife at any time, naming the wife or a trust for the benefit of wife as irrevocable beneficiary thereof until the husband's said obligation to pay alimony in gross to wife has ceased."

In order to comply with paragraph 5 of the settlement agreement, decedent in 1976 executed an amendment (the 1976 amendment) to an insurance trust originally established in 1972. The 1976 amendment directed the trustee, upon decedent's death, to pay the alimony in gross out of the insurance proceeds as the payments became due. Any trust property remaining thereafter was to be paid to the trustee of the testamentary trusts for the benefit of the children. The 1976 amendment also contained the following provision which is one subject of this appeal:

"12. I reserve the following rights, powers and authority which may be exercised at any time and from time to time:

(a) By written instrument delivered to the trustee to change, modify, or revoke this agreement and the trusts hereby evidenced, in whole or in part, except that if changed or modified, the duties, powers and responsibilities of the trustee shall not be changed substantially without the trustee's written consent and I may not change, modify or revoke this agreement in any way without the written consent of my former wife, Therese Martin Halas, as long as any of the gross alimony payments to be made to her under the agreement with her attached hereto as Exhibit B remain unpaid.

(b) All benefits, privileges, payments, annuities, dividends, surrender values, options and elections accorded or available to me under any and all policies of life insurance which may be made payable to the trustee, including the right to change the beneficiary named in any or all of such policies, to deposit, assign, transfer or pledge them as collateral security for any loan which I may make from lender (including said American National Bank and Trust Company of Chicago) and to withdraw any of such policies deposited with the trustee, except that in compliance with paragraph 5 of Exhibit B at all times life insurance policies which are in force under which I am the insured shall be retained in the custody of the trustee and be payable in a lump sum to the trustee in an amount exceeding loans against such policies no less than the unpaid balance of the alimony in gross due and owing to my former wife, Therese Martin Halas, at any time under the provisions of the agreement with her attached as Exhibit B. The trustee shall not be obligated to see that any policy so withdrawn is returned to the trustee's custody." (Emphasis added.)

In 1978, decedent again amended the trust (the 1978 amendment). In this amendment, decedent directed the trustee to retain only insurance proceeds in an amount equal to the unpaid alimony in gross. Funds in excess of that amount were to be distributed to a new trust established by decedent in 1978 (the 1978 trust). Under the terms of the 1978 trust, Patricia Halas was to receive one-third of the proceeds after decedent's death. The remainder was to be divided equally between two trusts established for the children. In order to fund the new 1978 trust, decedent executed a partial revocation of the 1972 trust, as amended in 1976, directing the trustee to surrender one of nine insurance policies used to fund the trust.

After decedent's death, petitioner sought to have the 1978 amendment and partial revocation declared invalid and to prohibit reliance by the executor and trustee on the amendment and revocation. She alleged in her petition that the amendment and revocation were void because they were executed without her consent. The guardian ad litem appointed to represent the interests of ...


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