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In Re Estate of Kirchwehm





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


Citation petitioner Enoch Navicky, residuary legatee, appeals the dismissal of a citation to recover proceeds of certain joint tenancy certificates of deposit (CDs), a savings account and a checking account from Doris O'Donnell (O'Donnell), the surviving joint tenant and executor and once guardian of the decedent, Alice Kirchwehm (Kirchwehm). We are asked to review whether: (1) joint tenancies established between decedent and O'Donnell were proved to have been mere joint tenancies of convenience rather than true joint tenancies; and (2) O'Donnell breached her fiduciary duties and thereby became unjustly enriched.

Melvin Kirchwehm, decedent's husband, who died in November 1970, had managed the family money during the marriage. After his death, Ted Boisumeau managed decedent's financial affairs until his death in 1974 or 1975. From that point on, O'Donnell, Kirchwehm's close friend, niece, and godchild, managed her affairs, including paying bills and writing checks. Until 1979, the bank accounts and CDs were in Kirchwehm's name only. There were two First National Bank CDs of $100,000 each; a Lakeview Trust and Savings Bank savings account of $50,000; and a checking account of $8,000. These accounts were set up as joint tenancies with Kirchwehm and O'Donnell as joint tenants during 1979 and 1980.

At some point during 1979, Kirchwehm's attorney, John Schmidt, filed a petition to have a guardian appointed for Alice as a mentally disabled person, and O'Donnell was so appointed; the record does not indicate when. *fn1 An inventory of the guardianship estate was filed on December 17, 1980, from which it appears that O'Donnell was appointed guardian after all the joint tenancies were established. Nevertheless, the two CDs, the savings account, and the checking account were listed on the inventory signed by O'Donnell as assets of the guardianship estate.

A guardian ad litem, appointed to examine the accounts of O'Donnell's guardianship, reported on November 4, 1983, that the court should demand strict proof as to whether the two CDs and the two bank accounts were actually intended as joint tenancies and not merely joint tenancies for convenience only. On December 20, 1983, the circuit court entered an order prepared by O'Donnell's attorney, directing that the two CDs and the two bank accounts "are assets to be used and appl[ied] to the sole and exclusive use of the disabled person [Alice Kirchwehm], notwithstanding the fact that said accounts are registered in the name of the disabled person and Doris O'Donnell as joint tenants." (Emphasis added.) It appears that by that time, however, O'Donnell had already transferred $100,000 from one CD to her own personal account in Wisconsin and it had been "consumed."

On April 28, 1984, Kirchwehm died in the Whitehall Nursing Home in Deerfield, Illinois, where she had lived for nearly four years. She left a will, also prepared by Schmidt.

The will was filed for independent administration and nominated O'Donnell and Chicago Title and Trust Company as executors. The will, dated October 15, 1974, listed three general bequests totaling $12,500 and disposed of the residue of the estate in percentile shares to nine heirs and legatees. O'Donnell was to receive a 20% residual share.

Chicago Title and Trust Company declined to serve as executor and O'Donnell was appointed independent executor. Letters of office were issued on May 30, 1984. On August 13, 1984, Navicky filed an appearance and on January 21, 1985, he filed a petition to terminate the independent administration. The independent administration was terminated at that time, but O'Donnell was retained as executor. Also on January 21, 1985, Navicky filed a petition for citation to recover property, which consisted of the two CDs and the two bank accounts. O'Donnell filed an inventory of the personal estate of decedent on March 21, 1985. The only funds shown on this inventory were in a Belmont National Bank checking account in the amount of $3,586.26, the balance of the property being shown as shares of stock previously owned by decedent.

After a trial, the circuit court dismissed the petition, *fn2 holding that petitioner had not overcome the presumption in favor of joint tenancies by clear and convincing evidence. Included in the dismissal order was a finding that the Belmont National Bank account was O'Donnell property in addition to the savings account and CDs. This appeal ensued.

• 1, 2 Under Illinois law, an instrument creating a joint account presumably speaks the whole truth. In order to go behind the terms of the agreement, the party claiming adversely to the agreement has the burden of establishing by clear and convincing evidence that a gift was not intended. (Murgic v. Granite City Trust & Savings Bank (1964), 31 Ill.2d 587, 591, 202 N.E.2d 470; In re Estate of Schroeder (1979), 74 Ill. App.3d 690, 694, 393 N.E.2d 1128; In re Estate of Gibbons (1978), 65 Ill. App.3d 314, 315-16, 382 N.E.2d 585; Bilek v. Ryan (1974), 19 Ill. App.3d 1027, 1028, 313 N.E.2d 178; In re Estate of Aksenas (1973), 14 Ill. App.3d 809, 810-11, 303 N.E.2d 473; In re Estate of Naumann v. Vanderwerff (1971), 1 Ill. App.3d 419, 421, 274 N.E.2d 147.) The mere existence of a fiduciary relationship does not rebut the presumption of donative intent. (In re Estate of Wilkening (1982), 109 Ill. App.3d 934, 938-40, 441 N.E.2d 158.) In rebutting the donative intent, the examination generally focuses on the establishment of the joint account, but subsequent occurrences may also be considered. In re Estate of Schroeder (1979), 74 Ill. App.3d 690, 393 N.E.2d 1128; In re Estate of Naumann v. Vanderwerff (1971), 1 Ill. App.3d 419, 421-22, 274 N.E.2d 147.

In the case sub judice, Navicky does not contend that the joint accounts were improperly established as to form. Rather, he contends that, regardless of their form, the accounts were created merely as a convenience for Kirchwehm.

The only testimony produced at the trial was to the effect that the accounts were not intended by Kirchwehm as gifts to O'Donnell. Kirchwehm's attorney, Schmidt, testified that he had advised decedent in 1978 or 1979 to "turn over her assets to someone who would manage them for her, preserve them for her, pay her bills out of them, and also look after her personal welfare." He discussed with Kirchwehm the advisability of having a guardian appointed and she agreed, saying: "put someone on my will so my bills can be paid. I can't pay them. I am not able to do it." As to what was meant by her "will," Schmidt testified: "She meant giving someone authority to draw on her account * * * so that person could pay her bills, her rent, her grocery bills, and the other bills." Schmidt advised her to use a title and trust company, but she said: "Doris has been very nice to me and I trust her and I would like her." Schmidt then testified:

"[S]he did it solely for the purpose of enabling that person to handle her funds. She had money hidden all over her apartment. And she wasn't able to draw a check. Rodriguez used to do that, but I told her that there should be someone who was responsible to the Court for what he did, and that that someone would have to make a report to the Court yearly * * *."

He testified further that no gift tax was ever filed by him for Kirchwehm in regard to any gift made ...

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