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01/29/87 John W. Herron, Sr., v. Patricia S. Underwood Et

January 29, 1987

JOHN W. HERRON, SR., PLAINTIFF-APPELLEE

v.

PATRICIA S. UNDERWOOD ET AL., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES (LUCY LEE HILLIARD, DEFENDANT-APPELLEE AND CROSS-APPELLANT; ANNA

FAY BUSH, INDI

v.

AND AS TRUSTEE, ET AL., DEFENDANTS-APPELLEES)



APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT

503 N.E.2d 1111, 152 Ill. App. 3d 144, 105 Ill. Dec. 105 1987.IL.83

Appeal from the Circuit Court of Shelby County; the Hon. Rolland F. Tipsword, Judge, presiding.

APPELLATE Judges:

JUSTICE JONES delivered the opinion of the court. KASSERMAN and HARRISON, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JONES

The plaintiff, John William Herron, Sr., son of the decedent, Paul K. Herron, filed the instant action for declaratory judgment seeking construction of various documents, including three deeds of conveyance executed by the decedent during his lifetime and placed with a third party to be given to the grantees subsequent to the decedent's death, an inter vivos trust agreement and amendment executed by the decedent, and an antenuptial agreement executed by the decedent and his third spouse. The plaintiff, an heir of the decedent, was a grantee named in one of the deeds of conveyance. The trial court found that there had been a valid delivery of the three deeds executed by the decedent so that the real estate subject to the deeds did not become a part of the decedent's estate. On appeal the defendants-appellants, also heirs of the decedent, contend (1) that the trial court erred in allowing testimony concerning delivery of the deeds by the decedent in violation of the Dead Man's Act (Ill. Rev. Stat. 1985, ch. 110, par. 8-201) and (2) that the testimony of events surrounding the purported delivery of the deeds by the decedent failed to show that the decedent had parted with all dominion and control over the deeds so as to constitute a valid delivery of the deeds. We affirm.

The decedent, Paul K. Herron, was married three times during his lifetime. Four children were born of his first marriage: John William Herron, Sr., Lucy Lee Hilliard, Paul David Herron, and a child who died in infancy prior to the decedent's death. Paul David Herron also predeceased the decedent, leaving five descendants, defendants-appellants Patricia Underwood, Tami Varnam, Lori Hewett, Sherri Herron, and David Herron (hereafter referred to as the defendants Underwood).

Paul K. Herron remarried after the death of his first wife. During that second marriage, the decedent executed a "Living Trust Agreement," dated September 30, 1977, and nominated his sister, Anna Fay Herron Bush, as trustee. This agreement, which stated that the trust was to be considered an irrevocable trust, provided in part that the trustee was to manage, control, and operate all property transferred to the trustee, real and personal, and was to distribute the income of the trust to the grantor, Paul K. Herron, in such amounts as should be determined by the trustee and the grantor of the trust. The trust agreement further provided that, upon the grantor's death, the trust would terminate and that, after payment of any expenses in connection with the trust and the funeral expenses of the grantor, the property would be distributed to the grantor's children, John William Herron, Sr., Lucy Lee Hilliard, and Paul David Herron.

In conjunction with the execution of the "Living Trust Agreement," Paul K. Herron executed a deed, also dated September 30, 1977, wherein he conveyed to Anna Fay Bush, as trustee, three tracts of property located in Shelby County, Illinois. One of these tracts consisted of residential property in the city of Windsor, Illinois, while the other two tracts consisted of farmland outside the city of Windsor.

The marriage of Paul K. Herron and his second wife was dissolved on December 15, 1981. Shortly thereafter, on March 17, 1982, the decedent caused three separate deeds to be prepared. Anna Fay Bush, as trustee, was the grantor in each deed, and Paul K. Herron was the grantee. The three deeds conveyed the property formerly conveyed to the trust by the deed of September 30, 1977, back to the decedent. After the three deeds were prepared, the decedent took them to his sister, who executed them, and he then caused them to be recorded in Shelby County, Illinois. The only asset remaining in the trust after this transaction was some Effingham Equity stock.

On March 26, 1982, Paul K. Herron again returned to the residence of Anna Fay Bush and on this occasion delivered to her an amendment to the "Living Trust Agreement" dated September 30, 1977. This instrument made two amendments to the "Living Trust Agreement." The first amendment provided that in the event of the death or inability of Anna Fay Bush to act as trustee, her daughter, Sarah Ann Bush, would act as successor trustee. The second amendment provided that upon the death of the grantor, Paul K. Herron, and after the payment of expenses in connection with the trust and the funeral expenses of the grantor, the trust would terminate and all trust property would be

"invested in John William Herron, Sr., for and during the term of his natural life, and upon his death, the property remaining in said Living Trust shall then pass to and become the property of Sarah Ann Bush."

Paul K. Herron, Anna Fay Bush, and Sarah Ann Bush executed the instrument and then caused it to be recorded in Shelby County, Illinois, on March 29, 1982.

On March 29, 1982, the decedent delivered three deeds, each dated March 26, 1982, to Anna Fay Bush. In each deed Paul K. Herron was the grantor. The first deed conveyed one of the tracts of farmland to Paul K. Herron's son, John William Herron, Sr., for and during the term of his natural life, and at his death to Paul K. Herron's grandson, John William Herron, Jr. The second deed conveyed the other tract of farmland to Paul K. Herron's daughter, Lucy Lee Hilliard, and the third deed conveyed the residential property in Windsor to Lucy Lee Hilliard. Paul K. Herron instructed Anna Fay Bush that the three deeds were to be delivered to his two children at his death. He gave Anna Fay Bush no further instructions regarding these deeds and never asked for their return.

Several months later Anna Fay Bush executed an oil-and-gas lease upon land that she owned. She arranged for her brother to execute a similar lease with regard to the adjoining tract of farmland that he had conveyed to Lucy Lee Hilliard, and the decedent executed such a lease on August 5, 1982.

A year later, in August 1983, Paul K. Herron and Harriett Krummel, who was to become the decedent's third wife, met with an attorney, Stephen K. Wood, to discuss the preparation of an antenuptial agreement. At Mr. Wood's request, each of the parties delivered to him a schedule listing their respective assets. On his schedule Paul K. Herron listed each of the three tracts of property that were the subject of the deeds given to Anna Fay Bush. At the attorney's suggestion an appraisal was made as to each of the three tracts. The decedent took the appraiser, Robert Pearce, to each of the three tracts for his examination, and Mr. Pearce submitted a written appraisal to Mr. Wood to be used in the preparation of the antenuptial agreement.

On August 25, 1983, a day or two before their marriage, Paul K. Herron and Harriett Krummel executed the antenuptial agreement. By this agreement both parties waived certain statutory rights to the property of the other in the event of his or her death. The agreement further provided, in pertinent part:

"11.) In case of the death of husband prior to wife's death, husband has expressed his desire to provide for the comfortable support and maintenance of wife from the assets of his estate. Husband specifically agrees that should he pre-decease wife, then she shall receive all of the net income from all of his real estate in payments at least quarterly during the remainder of her life, or until she remarries, whichever event shall happen first. It ...


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