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In re Marriage of Shirley Ann Velasquez

March 31, 1998

IN RE THE MARRIAGE OF: SHIRLEY ANN VELASQUEZ, PLAINTIFF-APPELLANT CROSS-APPELLEE,
v.
ANGELO VELASQUEZ, DEFENDANT-APPELLEE CROSS-APPELLANT.



Appeal from the Circuit Court for the 18th Judicial Circuit, DuPage County, Illinois No. 91--D--934 Honorable Kathryn E. Creswell Judge, Presiding

The opinion of the court was delivered by: Justice Breslin delivered the opinion of the court:

At issue in this case is whether a waiver provision in a marital settlement agreement waives any interest, expectancy or otherwise, in assets specifically listed in the marital settlement agreement. We hold that the waiver provision is sufficient to waive plaintiff Shirley Ann Velasquez's interest in a land trust because the real estate held in the trust was specifically listed as an asset in the agreement. However, we hold that the waiver provision does not waive Shirley's interest in an insurance policy that was not listed in the agreement. Accordingly, we affirm.

FACTS

In 1984, Shirley's husband, Angelo Velasquez, created a land trust holding real property known as 5228 through 5236 West 25th Street, Cicero, Illinois, as an asset. Angelo remained the sole owner of the property and retained the power to assign or transfer the beneficial interest in the land trust. Shirley was the named beneficiary of the trust.

In July 1992, Shirley and Angelo divorced. The Judgement of dissolution order incorporated a written marital settlement agreement. Among other marital assets, the agreement listed Angelo as the owner of two insurance policies: an All American policy and a Royal MacCabees Life Insurance policy (Royal). Shirley received the marital residence and several other marital assets. Angelo was awarded the real estate located at 5228 through 5236 West 25th Street and the cash surrender value of his insurance policies. The agreement further provided that Angelo would pay Shirley monthly maintenance payments and that the payments would be secured by the Royal policy. These payments were to be used to discharge the couple's obligations under their first mortgage, including real estate taxes.

The settlement agreement contained a mutual release clause that stated, in relevant part:

"To the fullest extent permitted by law, and except as otherwise herein expressly provided, each party relinquishes, waives, remises, and releases all rights and claims against the other party and his or her agents, attorneys, and employees, and each party hereby relinquishes, waives, remises, and releases to the other, his or her heirs, personal representatives and assigns, all rights of maintenance, alimony, spousal support, inheritance, descent and distribution, homestead, dower, community property, and all other rights, titles, claims, interests and estates as husband and wife, widow or widower, whether existing by reason of the marital relation between said parties or otherwise, including any and all right, title, claim, or interest which he or she otherwise has or might have or be entitled to claim in, to, or against the property, assets, and estate of the other, whether real, personal, or mixed, whether marital or non-marital, whether community or separate, whether now owned or hereafter in any manner acquired by the other party, whether in possession or in expectancy and whether vested or contingent."

Angelo died in July, 1996. Shortly thereafter, Shirley filed a petition to compel, requesting the death benefits from the Royal policy. In response, the executor of Angelo's estate (Executor) filed a counter-petition asking the court to compel Shirley to assign the beneficial interest in the land trust to the estate. This interest passed to Shirley at Angelo's death according to the beneficiary designation clause contained in the land trust agreement. The Executor also requested that the proceeds of a John Hancock Life Insurance policy (John Hancock), which named Shirley as the beneficiary, be paid to the estate.

During the first hearing, the defendants attempted to present testimony from Angelo's attorney, Julie Kaminski. The defendants claimed that she would testify as to Angelo's intent to change the beneficiary of the land trust and the insurance policy. The trial court refused to allow her testimony, stating that it was inappropriate at that point in the proceedings. Subsequently, the trial court ordered the proceeds of the Royal policy and the John Hancock policy be paid to Shirley. The court also ordered Shirley to assign her interest in the land trust to Angelo's estate and ordered the estate to pay real estate taxes on the marital residence until August of 2002. Both parties appeal.

DISCUSSION

Effect of Waiver on Land Trust

The primary issue on appeal is whether the waiver provision contained in the marital settlement agreement waives Shirley's expectancy interest as a contingent beneficiary of the land trust.

A divorce does not terminate property rights of a husband and wife which exist independent of the marriage. Leahy v. Leahy-Schuett, 211 Ill. App. 3d 394, 570 N.E.2d 407 (1991). However, a dissolution agreement may extinguish a divorced spouse's expectancy interest in a land trust or an insurance policy if the agreement includes a clear expression of the spouse's waiver of that interest. In re Marriage of Myers, 257 Ill. App. 3d 560, 628 N.E.2d 1088 (1993); Deida v. Murphy, 271 Ill. App. 3d 296, 647 N.E.2d 1109 (1995). To determine the effect of a waiver, two factors must be considered: (1) whether the asset in dispute was specifically listed as a marital asset and awarded to a spouse; and (2) whether the waiver provision contained in the settlement agreement specifically states that the parties are waiving any expectancy or beneficial interest in that asset. See Leahy, 211 Ill. App. 3d at 400, 570 N.E.2d at 411 (1991); Principal Mutual Life Insurance Co. v. Juntunen, 189 Ill. App. 3d 224, 545 N.E.2d 224 (1989). This court's review of the interpretation of a waiver provision included in a contractual agreement is de novo. Best Coin-Op, Inc. v. Old Willow Falls Condominium Association, 120 Ill. App. 3d 830, 458 N.E.2d 998 (1983).

Shirley asserts that the waiver provision does not contain a specific waiver of her expectancy interest as a contingent beneficiary of the land trust. She contends that the waiver provision in this case is comparable to the provision analyzed in ...


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