Appeal from the Circuit Court of Cook County; the Hon. Henry
A. Budzinski, Judge, presiding.
JUSTICE HARTMAN DELIVERED THE OPINION OF THE COURT:
In an action for construction of a will, limited to establishing a valid charitable remainder unitrust, certain beneficiaries of the trust brought a counterclaim against the executor and the other beneficiaries under the will.
The counterclaim sought to establish the existence of ambiguities in the will requiring judicial construction; however, the circuit court found the will clear and unambiguous and granted counterdefendants' motion to dismiss the counterclaim. Counterplaintiffs filed this timely appeal.
The issues presented on appeal are whether ambiguities exist in the will requiring judicial construction because of: (1)(a) the use of the phrase in the will, "adjusted gross estate as finally determined for Federal estate tax purposes"; (b) the fact that preresiduary bequests would partially abate; and whether; (2) the circuit court committed error by failing to give full effect to all language of the will; (3) and the circuit court erred in finding that the tax burden must fall on the residue of decedent's estate.
On May 6, 1975, Elinor Laas (decedent) executed a will, the relevant portions of which may be summarized as follows:
Article First provides for the payment of all death taxes from the principal of the residue of decedent's estate.
Article Second seeks to establish a charitable remainder unitrust in an amount equal to 25% of decedent's "adjusted gross estate as finally determined for Federal estate tax purposes." Under this article, decedent's son, Robert Laas, is to receive annually for his life an amount equal to 5% of the net fair market value of the trust property. At his death, the principal and any unpaid income is to be distributed in equal one-third shares to the Illinois Chapter of the Arthritis Foundation, the Illinois Division of the American Cancer Society, and the Chicago Heart Association (the charities).
Article Third, Fourth, Fifth and Sixth provide for bequests to various relatives and in-laws totaling 25% of decedent's adjusted gross estate as finally determined for Federal estate tax purposes.
Article Seventh provides that the residue of the estate shall be divided equally among the charities.
On November 5, 1975, decedent executed a codicil to the will in which she increased the bequest to the charitable remainder unitrust created in Article Second to an amount equal to 50% of her adjusted gross estate as finally determined for Federal estate tax purposes. She was adjudicated incompetent on January 28, 1976, and Charles L. Martin was appointed conservator of her estate. She died on June 16, 1983, and Martin was appointed executor of her estate.
Martin filed a complaint in the circuit court seeking construction of the will so as to establish a valid charitable remainder unitrust as provided in Article Second. The complaint named as defendants the beneficiaries under the will and codicil. In their answer to the complaint, the charities set forth a counterclaim against Martin as executor, and against the other beneficiaries. The counterclaim alleged, among other things, that the residuary gift to the charities under Article Seventh would be entirely eliminated if the executor's interpretation of the will were to prevail, and that certain ambiguities were present in the will which required construction. Counterdefendants Martin and Robert Laas filed motions to dismiss the charities' counterclaim with a supporting memorandum, to which the charities filed a memorandum in opposition.
The circuit court heard argument on these motions, found the will clear and unambiguous, and issued an order dismissing the charities' counterclaim. The appeal is appropriate in context of an order entered in the administration of an estate. 87 Ill.2d R. 304(b)(1).
• 1 The charities claim first that the circuit court erred in failing to find an ambiguity in the will's use of the phrase "adjusted gross estate as finally determined for Federal estate tax purposes" because when the will was executed the term "adjusted gross estate" as explained in section 2056(c)(2) of the Internal Revenue Code (I.R.C. sec. 2056(c)(2) (1975)) related solely to the Federal estate tax marital deduction which was available in the event a decedent was survived by a spouse. Since decedent was a widow, and no marital deduction could be claimed, the charities assert that decedent's adjusted gross estate for Federal estate tax purposes would never be determined, thereby giving rise to an ambiguity in the will, and the ...