Appeal from the Circuit Court of Cook County. The Honorable Henry A. Budzinski, Judge Presiding.
Released for Publication September 13, 1994.
The opinion of the court was delivered by: Egan
PRESIDING JUSTICE EGAN delivered the opinion of the court:
This case involves the extent of dominion retained by a beneficiaryof a land trust over the property in the trust. In 1979, the decedent, James A. Crooks, Sr., held five parcels of real estate in two land trusts. He executed a will, revocable trust and five quitclaim deeds in an attempt to transfer the properties into the revocable trust. In 1980, however, he directed the land trustee to convey four of the parcels to him individually. The land trustee issued a trustee's deed for the four properties. The fifth parcel remained in another land trust. He died in 1989. The executrix of his estate, his daughter, Emmanita Hendricks, did not include the parcels in the estate's inventory. Grace, the decedent's wife, filed a petition to compel the executrix to inventory the five parcels as assets of the decedent's estate. After a hearing, the trial Judge held in favor of Grace; he concluded that the five real estate parcels were not properly transferred into the revocable trust but were assets of the estate. The respondents, Emmanita and her brother James A. Crooks, Jr., appeal from that finding. They are not children of Grace.
The decedent entered into a land trust agreement with Chicago Title & Trust Company (CT&T) on November 12, 1970; he was the sole beneficiary. He named the respondents as beneficiaries of the land trust upon his death. This CT&T land trust contained four parcels of real estate, located in Chicago. On October 16, 1974, the decedent accepted an assignment of the beneficial interest under another land trust agreement with the Hyde Park Bank. This trust contained one parcel in Chicago. Additionally, the decedent owned two other parcels in Chicago that were held in a land trust with the Exchange National Bank. Those two parcels are not at issue in this appeal.
On July 12, 1979, the decedent visited Kenneth Kwiatt, an attorney, to prepare an estate plan. Based on Kwiatt's recommendations, the decedent executed a will and a revocable trust. The sole legatee of the will was the "James Crooks, Sr. Trust." The revocable trust agreement stated, "I, James Crooks, Sr., declare myself trustee of the property described in the attached schedule." No attached schedule was produced in this case. According to the trust's terms, Grace would receive $15,000 and the residue of the trust would be distributed equally to Emmanita and James.
On the same day, the decedent also executed five quitclaim deeds for the five parcels held under the CT&T and Hyde Park Bank land trusts. The quitclaims stated in pertinent part:
"THE GRANTOR JAMES A. CROOKS, a married person * * * CONVEYS AND QUIT CLAIMS to JAMES CROOKS, SR. Trust Agreement dated July 11, 1979 * * * all interest in the following described real estate * * *."
The legal description of each parcel was provided in each quitclaim deed. On August 7, 1979, the five quitclaim deeds were properly recorded. The will and revocable trust were not amended after they were executed.
On October 31, 1980, the decedent delivered a letter of direction to the CT&T trustee. The letter directed the trustee to execute and deliver a trustee's deed naming "James Crooks" as grantee. The letter instructed the trustee to include all four parcels in the trustee's deed. The CT&T trustee complied and conveyed to "James A. Crooks" the four parcels contained in the CT& T land trust by one trustee's deed. The trustee's deed was recorded on December 16, 1980. The fifth parcel remained in the Hyde Park Bank land trust. No letter of direction was delivered to the Hyde Park Bank trustee.
The decedent died on March 10, 1989. An estate was opened, and the decedent's will and trust were admitted to probate. Grace renounced the will and received a surviving spouse's award. Emmanita filed an inventory and an amended inventory, both of which omitted the five parcels of real estate. Grace filed an objection to the inventory; she contended that all the parcels were owned by the decedent at the time of his death, either in fee simple or as a beneficiary.
Grace then filed a petition for citation to recover assets. She alleged that the four parcels from the CT&T land trust were assets of the estate because they were conveyed to the decedent individually by a trustee's deed. She claimed that the fifth parcel, which was still in the land trust with the Hyde Park Bank, was personalty and should have been included in the inventory as another estate asset. Emmanita and James responded to the petition. They claimed that the decedent attempted to fund the revocable trust with the five parcels through the execution of the quitclaim deeds and that those deeds effectively transferred the decedent's beneficial interest to the revocable trust. Their response also stated that an "ambiguity exists in said James Crooks, Sr. Trust as to precisely what property is included in said Trust as a result of the lack of an attachment to the Trust"; that the decedent "intended to transfer to himself as trustee of the James Crooks, Sr. Trust the legal and equitable title to said 7 parcels of real estate * * * [and that] decedent made a mistake of fact, however, when he believed he held legal and equitable title to all seven properties"; and, that when he directed the CT&T trustee to convey a trustee's deed, he "knowingly breached his fiduciary duty under the James Crooks, Sr. Trust and practiced a constructive fraud upon the beneficiaries of said Trust by having the properties conveyed to himself individually rather than as trustee of the James Crooks, Sr. Trust."
A hearing was held on Grace's petition. Kenneth Kwiatt, the decedent's attorney, testified that he twice met with the decedent and Emmanita to set up the decedent's overall estate plan. Kwiatt did not know that the five parcels were held in the CT&T or Hyde Park Bank land trusts. Kwiatt testified that he "discovered" that the sixth and seventh parcels were held in land trusts at the Exchange National Bank. He received a trustee's deed for ...