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In Re Marriage of Matt



Appeal from the Circuit Court of Cook County; the Hon. Barbara J. Disko, Judge, presiding.


Rehearing denied May 8, 1984.

This garnishment action was brought by petitioner Karen Matt against the garnishee-defendant, the Cosmopolitan National Bank of Chicago. The judgment sought to be enforced consisted of arrearages in temporary child support owing to petitioner from Alvin Matt, the petitioner's ex-husband and lifetime beneficiary of a testamentary trust. The trust in question contained a spendthrift provision. The trial court found that the trust income was subject to a claim for child-support arrearages and denied the garnishee bank's motion to be discharged on a "no funds" answer. The garnishee bank appeals from this finding and order.

On April 16, 1980, Alvin Matt was ordered to pay temporary child support to Karen Matt. Mr. Matt failed to comply with this order and on October 21, 1982, judgment for dissolution of marriage was granted to Alvin Matt and Karen Matt which included a $7,000 judgment in favor of Karen for arrearages on the April 16, 1980, temporary support order.

The Cosmopolitan National Bank of Chicago is a trustee under the last will and testament of Yetta Matt, mother of Alvin Matt, who died on April 8, 1980, and whose will, dated October 8, 1975, was admitted to probate in the circuit court of Cook County. Yetta Matt's estate was settled and the assets delivered to the Cosmopolitan National Bank of Chicago to be administered in accordance with the testamentary trust contained in the will.

On July 7, 1983, garnishment proceedings were instituted by Karen Matt against the bank, based on the $7,000 judgment entered against Alvin Matt on October 21, 1982. On July 21, 1983, the bank filed an answer of "no funds" and a motion to be discharged from the garnishment proceedings, based upon the spendthrift provision in the testamentary trust, which provides:

"Neither principal nor income of the Trust herein established shall be pledged, transferred, sold, anticipated or encumbered by any beneficiary herein named, nor be in any manner liable, while in the possession of the Trustee, for any contract, debt or obligation, nor for any claim voluntarily or involuntarily created either legal or equitable against any beneficiary, including claims for alimony or support of any spouse of such beneficiary."

Neither party cited any ambiguity or petitioned the court to interpret the will. Both sides filed memoranda and were given the opportunity to argue their positions before the court.

On September 9, 1983, the trial court found that the income of the trust was subject to garnishment in order to satisfy the child support judgment and denied the bank's motion for a discharge on its no funds answer. The court ordered the bank to file an amended answer and the bank appeals.

The trial court based its decision upon its interpretation of the testator's intention, as determined from the trust's spendthrift provision, to provide for the support of Alvin Matt's children, the testator's grandchildren. The trial court believed that, because the spendthrift provision expressly protects the trust income against claims for spousal support yet does not mention child support, the testator did not intend to shield the trust income from the beneficiary's child-support obligations. The court also expressed its view, apparently based on Keller v. Keller (1936), 284 Ill. App. 198, 1 N.E.2d 773, that public policy in Illinois prohibits a trust beneficiary from escaping his child-support obligations on the basis of a spendthrift provision unless that provision expressly shields the trust beneficiary against child-support judgments. See Keller v. Keller (1936), 284 Ill. App. 198, 205, 1 N.E.2d 773.

Petitioner argues that, because the spendthrift provision does not expressly protect the beneficiary's interest against claims for child support, the trust income is not protected against garnishment. Defendant, the trustee bank, contends that the trial court incorrectly interpreted the testator's intent as expressed in the spendthrift provision. Defendant also contends that the Keller decision is no longer followed in Illinois.

In every case interpreting spendthrift trusts as they relate to the trust beneficiary's spousal and child-support obligations, the Illinois courts> have based their decisions at least in part upon the trust exception to section 49 of the old Chancery Act (Ill. Rev. Stat. 1975, ch. 22, par. 49; Ill. Rev. Stat. 1981, ch. 110, par. 399) which is now embodied in section 2-1403 of the Code of Civil Procedure. (Ill. Rev. Stat. 1983, ch. 110, par. 2-1403.) Section 2-1403 is worded almost identically to its predecessor in the Chancery Act.

"No court shall order the satisfaction of a judgment out of any property held in trust for the judgment debtor if such trust has, in good faith, been created by, or the fund so held in trust has proceeded from, a person other than the judgment debtor." Ill. Rev. Stat. 1983, ch. 110, par. 2-1403.

It seems clear from this language that judgment debts against a trust beneficiary cannot be satisfied out of the beneficiary's interest where, as here, the trust was created by a person other than the judgment debtor. (See Potter v. Couch (1891), 141 U.S. 296, 320, 35 L.Ed. 721, 733, 11 S.Ct. 1005, 1012; Dinwiddie v. Baumberger (1974), 18 Ill. App.3d 933, 936-37, 310 N.E.2d 841; see also MacDonald v. Joslyn (1974), 17 Ill. App.3d 52, 55, 307 N.E.2d 601.) However, petitioner contends that the courts> in Illinois have held that this statutory exception does not apply ...

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