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Heath v. Heath

OPINION FILED MAY 9, 1986.

DIANE ELIZABETH HEATH ET AL., MINORS, BY PAMELA E. HEATH, THEIR MOTHER AND NEXT FRIEND, PLAINTIFFS-APPELLEES,

v.

LARRY L. HEATH, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Kane County; the Hon. John L. Nickels, Judge, presiding.

JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:

Plaintiffs, Diane Elizabeth Heath and Stanley Lyle Heath, by Pamela E. Heath, their mother and next friend, filed a petition to remove defendant, Larry L. Heath, as custodian of certain bank accounts established under the Illinois Uniform Gifts to Minors Act (the Act) (Ill. Rev. Stat. 1983, ch. 110 1/2, par. 201 et seq.). Pursuant to sections 7(f) and 8(a) of the Act, plaintiffs sought a citation to issue against defendant commanding him to appear before the circuit court of Kane County and to render an accounting regarding the custodial estates, the two bank accounts created under the Act. (Ill. Rev. Stat. 1983, ch. 110 1/2, pars. 207(f), 208(a).) Additionally, plaintiffs sought the removal of defendant as custodian of the accounts and the appointment of a successor custodian. (Ill. Rev. Stat. 1983, ch. 110 1/2, par. 207(e).) Subsequent to the citation proceeding, the trial court entered an order in favor of plaintiffs. Defendant filed a timely notice of appeal.

At the citation proceeding conducted on January 7, 1985, defendant, testifying as an adverse witness, related that on or about March 31, 1983, he established two bank accounts at the Home Savings & Loan Association in Aurora. One account was opened in the name of Larry Lee Heath, as custodian for Stanley Lyle Heath, under the Act. In that account defendant deposited the sum of $10,000. The other account was opened in the name of Larry Lee Heath, as custodian for Diane Elizabeth Heath, under the Act. In this account defendant deposited the sum of $3,381.49.

In opening the two accounts defendant stated that he had signed signature cards but stated that he had merely signed the cards at the instruction of the bank. According to the defendant, the money used to establish the accounts came from defendant's father and constituted a loan which defendant was to return at the end of the year when his father retired. Defendant also stated that he did not understand the legal effect of signing the signature cards and that by establishing the accounts neither he nor his father intended to create a gift of money to the children.

Subsequent to the opening of the two bank accounts in March 1983, defendant made three withdrawals totaling $1,800 from the account of Diane Elizabeth Heath. At the citation proceeding defendant was questioned by plaintiffs' counsel regarding these withdrawals. Defendant pleaded the fifth amendment. The court directed defendant to answer. Counsel for defendant objected, arguing that defendant had the right to exercise his privilege not to incriminate himself. The court disagreed, explaining that on the basis of questions which preceded those which defendant refused to answer, defendant had waived any right to plead the fifth amendment regarding the withdrawals.

Defendant related that on August 10, 1984, he closed the account of Diane Elizabeth Heath withdrawing therefrom $3,988.74. Also on August 10, defendant closed the account of Stanley Lyle Heath, withdrawing therefrom $9,791.14. Defendant testified that with the monies withdrawn from these accounts he obtained a money draft, in the exact amount of the two checks, made payable to Arlene Heath, defendant's mother. Defendant explained that he had the money draft made payable to his mother, as his father from whom he had received the money was out of the country at the time.

Plaintiff moved to introduce plaintiffs' exhibits Nos. 1 through 5 into evidence. Exhibits 1 and 2 were the signature cards defendant signed in establishing the 1983 bank accounts for Stanley Lyle Heath and Diane Elizabeth Heath. Plaintiffs' exhibits 3 and 4 were copies of two checks, one in the amount of $3,988.74 and the other in the amount of $9,791.14, issued by Home Savings & Loan Association to defendant when defendant closed the two accounts in question. Exhibit 5 consisted of three checks, totaling $1,800 drawn on the account established for Diane Elizabeth Heath. The exhibits were admitted into evidence over defendant's objection.

During defendant's testimony it was revealed that the monies used to establish the two accounts for the children were acquired from the proceeds of an account opened in 1980 at Aurora Federal Savings & Loan Association. Defendant stated that the account at Aurora Federal was a certificate of deposit in the name of one of the children with defendant and his wife as custodians of the account. The monies used to establish this account were acquired from defendant's father sometime in 1980 and constituted a loan to defendant and his wife. Defendant maintained that the same monies from his father were used to establish both the 1980 account and the subsequent 1983 accounts.

As the result of the January 7, 1985, citation proceeding, the trial court found that the documentary evidence presented during the proceeding was sufficient to constitute a prima facie showing that the accounts established at Home Savings & Loan Association were intended to be irrevocable gifts to the named minors under the Act (Ill. Rev. Stat. 1983, ch. 110 1/2, par. 201 et seq.) and that defendant's testimony and evidence was insufficient to overcome plaintiffs' strong documentary showing. The court ordered that defendant be removed as custodian, that a successor custodian be appointed, and that, upon such appointment, defendant immediately deliver up the subject funds to the successor custodian. Additionally, the court denied defendant's motion to strike testimony which the court directed defendant to give following the invocation of defendant's fifth amendment privilege.

Defendant appeals from the court's order, raising two contentions of error: (1) that the trial court erred in determining that an irrevocable gift was created under the Act; and (2) that the trial court erred in ordering defendant to testify following the invocation of his fifth amendment privilege against self-incrimination.

• 1 Defendant first contends that the necessary donative intent for the establishment of a gift was lacking at the time he opened the two bank accounts in the names of his minor children under the Illinois Uniform Gifts to Minors Act. Thus, defendant argues, the trial court erred in concluding that establishment of the accounts constituted irrevocable gifts.

In the instant case, sections 2 and 3 of the Act are particularly relevant to a determination whether an irrevocable gift was created. These sections provide in part:

"An adult may, during his lifetime make or provide for a gift of custodial property to a person who is a minor on the date of the gift or distribution:

(2) if the subject of the gift is money, by paying or delivering it to a broker or domestic financial institution for credit to an account in the name of the donor, another adult or a trust company, followed, in substance, by the words: `as custodian for * * ...


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