Agin v. Marzovillo (In re Estate of Agin)

• Court: Appellate Court of Illinois
• Writing for the Court: Justice GORDON delivered the judgment of the court, with opinion.
• Citation: Agin v. Marzovillo (In re Estate of Agin), 57 N.E.3d 675, 404 Ill.Dec. 916 (Ill. App. 2016)
• Decision Date: 30 June 2016
• Docket Number: No. 1–15–2362.,1–15–2362.
• Parties: In re ESTATE OF Stephen Michael AGIN, Deceased (Jessica Agin, Supervised Administrator, Petitioner–Appellee, v. Janice M. Marzovillo, Stephen L. Agin, Cynthia M. McKennas, and Mary L. Agin, Respondents–Appellants).

57 N.E.3d 675

404 Ill.Dec. 916

In re ESTATE OF Stephen Michael AGIN, Deceased (Jessica Agin, Supervised Administrator, Petitioner–Appellee, v. Janice M. Marzovillo, Stephen L. Agin, Cynthia M. McKennas, and Mary L. Agin, Respondents–Appellants).

No. 1–15–2362.

Appellate Court of Illinois, First District, Fifth Division.

June 30, 2016.

Rehearing Denied Aug. 5, 2016.

Roger L. Longtin and Dennis J. Powers, both of DLA Piper LLP (US), of Chicago, for appellants.

No appearance for appellee.

OPINION

Justice GORDON delivered the judgment of the court, with opinion.

¶ 1 The instant appeal arises from the probate court's finding that decedent Stephen Michael Agin's fractional interest in a land trust established by his uncle was an asset of decedent's estate, rather than passing directly to his children, respondents Janice M. Marzovillo, Stephen L. Agin, Cynthia M. McKennas, and Mary L. Agin. On appeal, respondents argue that the probate court erred in its interpretation of the land trust and that, under the terms of the land trust, decedent's interest in the trust should have passed directly to his descendants per stirpes instead of being considered an asset of his estate. For the reasons that follow, we affirm.

¶ 2 BACKGROUND

¶ 3 Decedent Stephen Michael Agin died on April 10, 2014, at age 82, without leaving a will. Jessica Agin, decedent's wife, and Stephen L. Agin, one of decedent's children from a prior marriage, filed cross-petitions for letters of administration in October 2014, and, on November 17, 2014, Jessica was named supervised administrator of decedent's estate. On the same day, Jessica filed an affidavit of heirship stating that she was decedent's wife and that decedent had four children from a prior marriage, all of whom were of legal age and mentally competent, and the probate court entered an order declaring Jessica and respondents to be decedent's only heirs.

¶ 4 On January 16, 2015, Jessica filed an inventory of the decedent's estate, which listed as personal property “Chicago Title Escrow Account 201448039,” with a value of $8052.08. On February 6, 2015, respondents filed an objection to the inventory, claiming that the funds in the Chicago Title escrow account were the property of respondents and not an asset of the estate.

¶ 5 The objection claimed that on October 10, 2001, decedent's uncle, Michael Yergovich, signed a trust agreement naming Chicago Title Land Trust Company (Chicago Title) as trustee of trust No. 1110232 (the trust), pursuant to which Chicago Title took legal and equitable title to a single family home in Chicago; the trust agreement was amended on October 22, 2001, and under the terms of the trust, decedent was to be awarded a 4% interest in the trust upon Yergovich's death. Yergovich died on January 5, 2014, prior to the termination of the trust, and the objection claimed that under the terms of the trust, “a 1/25th interest in said trust immediately vested in [decedent] and his descendants per stirpes.” The single family home was sold on November 18, 2014, and decedent's portion of the proceeds was placed into the Chicago Title escrow account because Jessica claimed an interest in the proceeds. The objection claimed that Jessica had been advised by the attorney who represented Yergovich in connection with the formation of the trust that “it was the intent of Mr. Yergovich in forming said trust that the 1/25th interest in the proceeds from the sale of the subject property being held in Chicago Title Escrow Account 201448039 would be distributed to the per stirpal descendants of [decedent].” As respondents were decedent's only per stirpes descendants and Jessica was not a per stirpes descendant, the objection requested that the probate court find that the funds in the Chicago Title escrow account were the property of respondents and not an asset of the estate.

¶ 6 As an exhibit, the objection contained a copy of the trust agreement and its amendment.¹ The trust agreement was dated October 10, 2001, and gave legal and equitable title to the property to Chicago Title, with Yergovich named as beneficiary and retaining the sole power of direction. The trust agreement provided, in relevant part:

“The interest of every beneficiary and of any person who may become entitled to any interest under this trust shall consist only of (1) the power to direct the trustee to deal with title to the property; (2) the power to manage, possess, use and control the property; and (3) the right to receive the earnings, avails and proceeds from leases and other uses and from mortgages, sales and other dispositions of the property. Such rights and powers shall be personal property and may be assigned as such. On the death of any beneficiary his interest, except as otherwise specifically provided, shall pass to his executor or administrator and not to his heirs at law. * * * The death of any beneficiary shall not terminate the trust or affect the rights or powers of the trustee or of the beneficiaries except as provided by law.”

The trust agreement further provided:

“On the written direction of the party or parties * * * having the power of direction the trustee will make deeds for, or deeds conveying directly to a trust Grantee, or mortgages or trust deeds * * * or execute leases or otherwise deal with the title to the trust property including cash or other assets subject to the trust. The beneficiaries by written instrument delivered to the trustee may revoke the foregoing power of direction and designate the person thereafter to exercise the power. Such instrument shall be signed by all the then beneficiaries.”

¶ 7 The amendment to the trust² was dated October 22, 2001, and provided that “[i]n the event of death of said Michael Yergovich prior to termination of this trust or prior to other disposition of his interest hereunder, then all interest of said Michael Yergovich shall immediately pass and vest, as follows, per stirpes.” The amendment then listed a 20% interest to each of Yergovich's four then-living siblings, and a 4% interest to each of five named nieces and nephews, including decedent.³

¶ 8 In response to respondents' objection, petitioner claimed that the language of the trust vested decedent's right to his fractional interest in the trust at the moment of Yergovich's death and that decedent could thereafter dispose of the property as he wished; petitioner claimed that the language of the trust did not limit the disposition of the interest to decedent's lineal descendants, as respondents claimed.

¶ 9 On May 8, 2015, the parties came before the probate court for a hearing on respondents' objection. According to the bystander's report submitted by the parties and certified as accurate by the probate court, “[a]t the outset of the hearing, Judge Riley stated that he had read the materials submitted to him and that, upon Michael Yergovich's death, the interest of the decedent, Stephen M. Agin, in Chicago Title Land Trust Number 1110232 * * * vested, it became his, and Mr. Agin could have done whatever he wanted to do with it.” Respondents' attorney pointed out the “per stirpes ” language to the court, but the court responded “that the ‘per stirpes' language only applies to successor beneficiaries who died before Michael Yergovich.” Respondents' attorney “replied that Trust 1110232 does not say that the ‘per stirpes' language only applies to successor beneficiaries,” and the probate court “stated that the trust did not need to.” Respondents' attorney “then pointed out to Judge Riley that the trust at issue is a land trust, not a conventional trust, and that this difference was significant.” The probate court responded “that it did not matter.”

¶ 10 On the same day, the probate court entered an order finding (1) that the trust agreement was not ambiguous and (2) that the funds in the Chicago Title escrow account were an asset of decedent's estate. The probate court ordered that the funds in the Chicago Title escrow account be disbursed to decedent's estate. The court further found that there was no just reason to delay appeal and stayed the order pending appeal.

¶ 11 On June 5, 2015, respondents filed a motion for reconsideration of the probate court's May 8, 2015, order, in which they argued that (1) “the parties did not present case law addressing the formation and construction of land trusts under Illinois law and properly focus the Court on the issues raised by said objection” and (2) there were “facts relevant to the issues raised by the objection which were not presented to the Court prior to its ruling.”⁴ Specifically, the motion stated that on February 25, 2014, Bruce Becker, the attorney who represented Yergovich in connection with the formation of the trust, sent a letter to the trust's “ ‘Contingent Beneficiaries (and Successors Thereto)’ ” in which he advised that “ ‘[e]ach contingent beneficiary must sign a Ratification of Trust Agreement reflecting that the contingent beneficiary confirms and approves the terms of the Trust Agreement.’ ” Becker also requested that each contingent beneficiary revoke his or her fractional share of the power of direction and grant power of direction under the trust to Karen Giacomino and Mary Lou McCan⁵ in order to sell the property held in the trust. On March 18, 2014, decedent signed the letter and returned it to McCan. Becker later also sent a letter to the same contingent beneficiaries setting forth the scope and terms of his legal representation, and Jessica returned the letter signed on decedent's behalf shortly before his death. Thus, the motion argued that “[a]ll interested parties, including the decedent, ratified and confirmed the terms of [the trust], including the ‘per stirpes' language, and granted the power of direction to Mary Lou McCan and Karen Giacomino after Mr. Yergovich passed away.”

¶ 12 The motion further stated that on August 12, 2014, Becker sent a letter to respondents and forwarded copies of the trust agreement and amendment; the ...