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01/28/88 In Re Marriage of Helen Elizabeth Benz

January 28, 1988



Petitioner-Appellee, and CURTIS MARVIN LEE BENZ,


518 N.E.2d 1316, 165 Ill. App. 3d 273, 116 Ill. Dec. 336 1988.IL.100

Appeal from the Circuit Court of McLean County; the Hon. Wayne C. Townley, Jr., Judge, presiding.


JUSTICE KNECHT delivered the opinion of the court. GREEN, P.J., and SPITZ, J., concur.


Respondent appeals the award of marital and non-marital assets ordered by the circuit court of McLean County in a final judgment of dissolution of marriage entered July 10, 1987. Respondent raises three issues for our consideration: (1) whether petitioner sufficiently rebutted the presumption of transmutation to marital property where nonmarital funds previously held in a separate trust were transferred during the marriage to a joint trust; (2) whether the trial court properly assessed a marital property value to respondent's pension rights; and (3) whether the court properly divided all marital property in just proportions under section 503(d) of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1985, ch. 40, par. 503(d)). We affirm.

The petitioner Helen Elizabeth Benz (Helen) filed a petition for dissolution of marriage on July 3, 1986. The court granted a dissolution on April 3, 1987, and at that same time also expressly reserved entry of judgment until a hearing could be conducted on all other matters, including issues of property. Following such a hearing, the court entered its findings in a July 7, 1987, opinion, later memorialized in a final judgment order entered July 10. It is the trial court's assessment and division of marital and non-marital property which is contested by respondent Curtis Marvin Benz (Curtis) here.

The parties were married on November 14, 1969. On July 1, 1986, Helen left the marital residence and filed her petition for dissolution of marriage two days later. Both Helen and Curtis had two natural children from previous marriages. No children were born to them during their marriage. At the time the dissolution proceedings were underway, Curtis was 61 years of age, and Helen was 64. Both are in good health, although Helen had experienced a previous bout with lymphoma cancer which was currently in remission.

The couple purchased their marital residence in joint tenancy during 1976. A good portion of the down payment originated from money Helen received after the sale of her mother's home. Helen's mother and Curtis' father lived with them in this house at different times over the years, also contributing money to the household while they resided there. Helen's mother suffered from various ailments and remained in the home for approximately six months out of every year during 1976 through 1982. Curtis' father suffered a debilitating stroke in 1983 and moved into the parties' house after a stay in the hospital. Helen, a registered nurse, remained in the home for his care. Helen had previously resigned from her position at Brokaw Hospital in 1977. When the burden upon Helen to care for him became too great, Curtis took early retirement from the General Electric Company in October of 1983. Curtis had been employed by GE continuously from 1952 until the time of his retirement, at all times contributing to the company's pension plan.

The first disputed point involves transference of $100,000 from a trust singularly maintained by Helen to the couple's joint trust account. To resolve this issue we must trace the $100,000 as it was detailed by testimony before the trial court.

During the summer of 1982, Helen received a check totaling $161,037.74 as her share of the proceeds from the sale of a family farm. Of this amount, $5,000 was given to each of Helen's two sons and Curtis' two daughters. Curtis advised Helen to place an additional $31,037 in their joint savings account as an amount he estimated would cover anticipated inheritance taxes. Taxes on the inheritance were assessed at $21,119.64, with total taxes for the year amounting to $27,481.78. After payment of taxes, the remaining funds from the $31,037 setoff were placed in the couple's profit cash account in joint tenancy.

After these transactions, a total of $110,000 was left over from the original $161,037. Helen placed this amount in trust in her name only (the Helen Benz trust), $10,000 was placed in one certificate of deposit within the trust, while the other $100,000 was set up in a second certificate. Interest earned from the trust was paid to both parties and was deposited in either their profit cash, joint checking, or joint savings accounts. The terms of the Helen Benz trust provided that upon her death, should Curtis survive her, he would receive one-third of the trust income for life, with one-third shares also going to Helen's two sons. Upon Curtis' death the principal of the trust would then be equally distributed between her two sons or their lawful heirs.

In January of 1984, when the rolled-over $10,000 certificate was about to mature, Helen wished to use that money to buy herself a new car. The vehicle she ordered was not delivered until July of 1984, at which time she used the entire $10,000 as the majority of a cash payment on the car. Although she testified she intended the automobile to be hers alone, title to it was jointly held. The trial court deemed the car marital property, a finding not expressly contested on appeal.

There remained the second $100,000 certificate in the Helen Benz trust. In January of 1985, that entire sum was transferred from the Helen Benz trust to an already-existing second trust set up on behalf of both petitioner and respondent (the joint trust). The parties take divergent views as to why this transfer was made. They agree in November of 1984 one of Helen's sons came to them seeking aid in paying off some $8,000 in debts. Curtis initially objected to advancing Helen's son the money, believing it was a "cardinal rule" between them that if they gave one of their four children money, the others should also be given the same amount. One version of events was that Helen then offered to take the entire $100,000 out of her trust when the certificate matured in January, and to place it in the marital trust, if Curtis agreed to help her son out of his financial difficulties. Curtis acquiesced, withdrew $8,000 to pay the son's creditors, and the $100,000 was transferred into the joint trust two months later.

Helen related that Curtis kept "pestering" her to place the $100,000 in the marital trust. Helen stated she finally agreed to the transfer in order to keep peace in the family, as Curtis had become increasingly verbally abusive. She also recalled they discussed how any inheritance Curtis would receive from his father would similarly be placed into the marital trust if she transferred the $100,000. However, Helen testified it was never her intent to make a gift of the $100,000.

The trial court in its July 7, 1987, opinion agreed petitioner had rebutted the presumption of gift to the marital estate by her transfer of the entire $100,000 certificate of deposit to the joint trust. The court in reaching its determination relied on petitioner's lack of business acumen, her desire to placate her husband, and her dependence upon his judgment and advice as evidenced over the years. The court noted respondent had required petitioner to deposit more than was necessary in a joint account to pay off the income tax liability on the sale of the farm, but would not allow the difference which remained in a cash profit account to be used to retire the son's debts. Respondent also apparently conditioned his release of their joint funds for the son's benefit upon petitioner's promise to convert her certificate into the joint trust. Concluding respondent's control over petitioner's affairs "has been clearly demonstrated," the court declared the $100,000 certificate to be non-marital property belonging to the petitioner.

Respondent disputes these findings, asserting the record clearly shows transmutation of the non-marital funds to the marital partnership, and a lack of evidence to refute the presumption that Helen intended to make a gift of those assets.

Section 503 of the Illinois Marriage and Dissolution of Marriage Act (Act) requires a court to classify property as either marital or nonmarital in order to assign or divide it upon a marriage dissolution. (Ill. Rev. Stat. 1985, ch. 40, par. 503.) As a general rule under the statute, property acquired by either spouse after the marriage, but prior to a judgment of dissolution, is presumed marital property regardless of how title is actually held. (Ill. Rev. Stat. 1985, ch. 40, par. 503(b); In re Marriage of Rogers (1981), 85 Ill. 2d 217, 422 N.E.2d 635.) This same section excepts certain property from the general rule, including "property acquired by gift, legacy or descent." (Ill. Rev. Stat. 1985, ch. 40, par. 503(a)(1).) That which is designated nonmarital property under the exceptions to section 503(a) may still, however, be presumptively transmuted to marital property by affirmative act of the contributing spouse. (In re Marriage of Smith (1981), 86 Ill. 2d 518, 427 N.E.2d 1239; In re Marriage of Cook (1983), 117 Ill. App. 3d 844, 453 N.E.2d 1357.) The principle of transmutation is based on the presumption that the owner of the non-marital property intended to make a gift of that property to the marital estate. (In re Marriage of Olson (1983), 96 Ill. 2d 432, 451 N.E.2d 825; see generally Feldman & Fleck, Taming Transmutation: A Guide to Illinois' New Rules on Property Classification & Division Upon Dissolution of Marriage, 72 Ill. B.J. 336 (1984).) The placing of non-marital property in joint tenancy or some other form of co-ownership with the other spouse will raise a presumption that a gift was made to the marital estate, and the property will become marital property. (Atkinson v. Atkinson (1981), 87 Ill. 2d 174, 429 N.E.2d 465, cert. denied (1982), 456 U.S. 905, 72 L. Ed. 2d 162, 102 S. Ct. 1751.) This presumption in dissolution proceedings may still be rebutted by the "'donor'" spouse with "clear, convincing and unmistakable evidence." In re Marriage of Rink (1985), 136 Ill. App. 3d 252, 257, 483 N.E.2d 316, 320; see also In re Marriage of Wojcicki (1982), 109 Ill. App. 3d 569, 573, 440 N.E.2d 1028, 1030.

Here the money distributed to Helen upon the sale of the family farm would fall within the gift, legacy or descent exception in section 503(a)(1). (Ill. Rev. Stat. 1985, ch. 40, par. 503(a)(1).) The $100,000 separately maintained in the Helen Benz trust retained that classification. However, as the trial court correctly noted, once the money was transferred to the joint trust, a presumption of transmutation and of gift to the marital estate arose which could only be rebutted by clear ...

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