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Gwinn v. Gwinn

Court of Appeals of Illinois, Second District

August 15, 2016

KENNETH GWINN, JR.; GEORGE GWINN, and ROBERT GWINN, Plaintiffs-Appellants,
v.
KENNETH GWINN, SR.; MARIA MAY FRITZ, a/k/a Maria May Gwinn, Defendants (Kenneth Gwinn, Sr., Defendant-Appellee).

         Appeal from the Circuit Court of Du Page County, No. 13-CH-3347; the Hon. Bonnie M. Wheaton, Judge, presiding.

          Kenneth J. Vanko and Gregory P. Adamo, both of Clingen, Callow & McLean, LLC, of Lisle, for appellants.

          Patrick J. Williams and Vincent C. Mancini, both of Ekl Williams & Provenzale LLC, of Lisle, for appellee.

          Panel JUSTICE ZENOFF delivered the judgment of the court, with opinion. Justices Hutchinson and Jorgensen concurred in the judgment and opinion.

          OPINION

          ZENOFF JUSTICE

         ¶ 1 Plaintiffs, Kenneth Gwinn, Jr., George Gwinn, and Robert Gwinn, filed a four-count complaint against Kenneth Gwinn, Sr. (defendant), and Maria May Fritz-their father and his wife. Plaintiffs' action centered on distributions that defendant made as both the trustee and the primary beneficiary of the Betty M. Gwinn Trust, which his late wife (Betty) established. The trial court dismissed plaintiffs' complaint for failure to state a claim upon which relief could be granted (735 ILCS 5/2-615 (West 2014)). Plaintiffs appeal the dismissal only of the first two counts, directed against defendant but not Fritz. They contend that these counts stated causes of action for, respectively, breach of the trust and breach of fiduciary duty. We reverse and remand.

         ¶ 2 Plaintiffs' second amended complaint, filed April 23, 2015, alleged as follows. Plaintiffs are three of defendant and Betty's four children. Kenneth Jr. resides in West Bloomfield, Michigan; Robert resides in Oak Brook, Illinois; and George resides in Scottsdale, Arizona. The fourth child, Katherine Weyrens, is not involved in this case. Defendant resides in both Oak Brook, Illinois, and Montrose, Colorado. Fritz resides in Montrose, Colorado.

         ¶ 3 On May 8, 2002, Betty executed the trust. She named herself and defendant as initial trustees. The "Declaration of Trust" (Trust Agreement) stated that Betty had four children now living: plaintiffs, who resided at the addresses given in the second amended complaint, and Weyrens, who resided in Topeka, Kansas. Article I stated in part, "I intend by this Trust Agreement to provide for my spouse and all my children." Article IV stated that, should Betty predecease defendant, the trustee shall divide the trust property into two separate trusts, the "Marital Trust" and the "Family Trust." The former would consist of "an amount equal in value to the smallest amount of the federal estate tax marital deduction allowable to [Betty's] estate that will result in the least possible federal estate tax being payable at [her] death." The latter would consist of the balance of the trust property.

         ¶ 4 According to the second amended complaint, in 2009, the trust assets' total value was less than the federal estate-tax exclusion of $3.5 million. Thus, the Family Trust contained all the trust assets.

         ¶ 5 Article IV, section 2, stated, as pertinent here:

"The Marital Trust shall be administered by the trustee for the benefit of my spouse as follows:
(a)The trustee shall pay or apply for my spouse's benefit, at least quarterly during my spouse's lifetime, all of the net income from the Marital Trust.
(b)The trustee shall also distribute to or for my spouse's benefit as much of the principal of the trust as is necessary or advisable for my spouse's education, health, maintenance, companionship, enjoyment, medical care, comfort, support and general welfare. The trustee shall take into consideration, to the extent that the trustee deems advisable, any income or resources of my spouse which are outside of the trust and are known to the trustee.
(c)Notwithstanding provisions (a) and (b) above, the trustee shall also distribute any part or all of the principal of the Marital Trust to my spouse at any time upon his written request. Such distribution must be made pursuant to my spouse's voluntary ...

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