Estate of Lee v. Line

Decision Date14 August 2017
Docket NumberAppeal No. 3-15-0651.
Citation2017 IL App (3d) 150651,83 N.E.3d 570
Parties IN RE ESTATE OF Sandra K. LEE, Deceased (Camden Lee, Jordan Lee, and Zoe Lee, Petitioners–Appellees, v. Kathleen Line, Trustee of the Sandra K. Lee Trust, and Jennifer Mansberger, Executor of the Estate of Sandra K. Lee, Respondents) (Kathleen Line, Respondent–Appellant).
CourtUnited States Appellate Court of Illinois

John P. Ridge, of Kankakee, for appellant.

Christopher W. Bohlen, of Barmann, Bohlen & Jacobi, P.C., of Kankakee, for appellees.

OPINION

JUSTICE CARTER delivered the judgment of the court, with opinion.

¶ 1 In a probate proceeding, the beneficiaries of a testamentary trust sought to have the trustee, Kathleen Line, provide an accounting of the trust; to have the executor of the decedent's estate, Jennifer Mansberger, pay certain sums directly to the beneficiaries, rather than to the trust; to hold Kathleen in contempt for failing to provide an accounting; and to remove Kathleen as the trustee of the trust. After hearings, the Kankakee County circuit court granted all of the beneficiaries' requests. Kathleen appeals and challenges those rulings. We affirm all of the orders in question, except for the contempt order, as to which we reverse, vacate the sanction imposed, and remand for further proceedings.

¶ 2 FACTS

¶ 3 The decedent, Sandra K. Lee, died in January 2005. She was survived by her three minor children, Camden Lee (born in 1988), Jordan Lee (born in 1989), and Zoe Lee (born in 1995). Sandra had a will, which was executed in December 2004. Of relevance to this appeal, the will (1) named Jennifer as the executor of Sandra's estate, (2) established a testamentary trust for the benefit of Sandra's three children, (3) bequeathed the residuary estate to the trust, and (4) named Kathleen as the trustee of the trust and the guardian of the children. More specifically, the language in the will pertaining to the trust (referred to hereinafter as the trust), provided that Kathleen was to apply the income and such amounts of the principal as she, "in [her] sole discretion," determined was "necessary for the support, health, welfare, and education" of the children. The trust stated further that it was Sandra's "primary purpose to provide for [the] support, health, welfare, and education of [her] children irrespective of the effect that such may have upon the interest of any remainderman under [the] trust." The trust also provided that as each child reached the age of 25, he or she was to receive one-third of the trust assets.

¶ 4 In February 2005, Jennifer filed a petition to admit the will to probate and to appoint herself as the executor of Sandra's estate. Along with the petition, Jennifer also filed an inventory, showing that the value of Sandra's personal estate was approximately $233,000. Later that same month, the trial court granted Jennifer's petition, admitted Sandra's will to probate, and appointed Jennifer as the executor of Sandra's estate.

¶ 5 Shortly after Sandra passed away, the children, except for Camden, moved in with Kathleen and lived with Kathleen and her family for the next several years. Camden was in the Department of Corrections at the time of Sandra's death and, upon being released, moved in with Kathleen and her family as well.

¶ 6 In April 2010, five years after the children had moved in with Kathleen and her family, Kathleen filed a petition in the trial court demanding that Jennifer provide an accounting of the estate and that Jennifer release estate assets to Kathleen as the trustee of the trust. The following month, Jennifer filed an accounting of the estate. The accounting indicated that the estate started with a balance of approximately $269,000 in cash or other assets and that certain itemized disbursements were made over a five-year period for the benefit of the children. Most notably, $90,000 was distributed to Kathleen as the trustee of the trust in April 2009, and $100,000 was distributed to Kathleen as the trustee of the trust in December 2009. Jennifer's accounting indicated further that as of the last time a yearly statement was received, the estate had about $4000 in a checking account and about $43,000 in a stock account. After some additional court dates and the tender of some discovery from Jennifer to Kathleen, the case was continued generally, to be brought before the trial court if necessary.

¶ 7 In August 2014, Jordan filed a petition in the trial court for an accounting of the estate by Jennifer (as the executor) and of the trust by Kathleen (as the trustee).1 Neither Jennifer nor Kathleen objected to the petition. By agreement of the parties, therefore, the trial court ordered Jennifer to prepare an accounting of the estate and Kathleen to prepare an accounting of the trust. Jennifer filed her accounting in October 2014. Jennifer's accounting indicated that the estate had assets of approximately $81,000 ($4000 in a checking account and $77,000 in a stock account). Kathleen, however, after requesting and receiving a continuance, failed to file an accounting of the trust.

¶ 8 In January 2015, the trial court issued a rule to show cause against Kathleen for failing to file the accounting in a timely manner. The petition for rule, which had previously been filed, did not specify what type of contempt finding was being sought against Kathleen, asked to have Kathleen "punished accordingly" for her contempt of court, and requested an award of reasonable attorney fees for the "enforcement of the court's orders and the filing of the necessary petitions to obtain the accounting." Later that same month, Jordan, Camden, and Zoe (collectively referred to as the children) filed a request with the trial court asking the court to order that the remaining funds held by Jennifer, as the executor of the estate, be released directly to them, rather than to the trust.

¶ 9 In February 2015, a hearing was held on the rule to show case. After calling the motion for hearing, the trial court immediately asked Kathleen's attorney if he was going to present any evidence as to why Kathleen should not be held in contempt of court. The trial court spoke of Kathleen purging herself of any possible contempt. Ultimately, Kathleen's attorney did not present any evidence, nor did the children's attorney. At the conclusion of the hearing, the trial court found Kathleen in contempt of court for failing to file the accounting in a timely manner.

¶ 10 In April 2015, Kathleen filed her original accounting, which was subsequently amended. Relying primarily upon a study done by the United States Department of Agriculture (USDA) rather than actual expenses, the amended accounting provided estimated amounts that had been spent on behalf of the children over the past several years, although some specific expenses were listed. The amended accounting indicated that Camden had lived with Kathleen and her family for 3.5 years, that Jordan had lived with Kathleen and her family for 8.51 years, and that Zoe had lived with Kathleen and her family for 9.5 years. In addition, Camden's girlfriend and son had also lived with Kathleen and her family for 3.5 years at Camden's request. During the time period when the children had lived with Kathleen, the trust had received $190,000 from the estate and approximately $158,000 from Social Security for the children's benefit and had spent approximately $505,000 on the children. Thus, according to Kathleen, the trust had a shortage of approximately $315,000, which presumably had been paid for by Kathleen and her family. Among the expenses listed in the amended accounting were the interest paid on a new house that Kathleen's family had built in December 2005 and a new car that Kathleen's family had acquired. No receipts, copies of checks, or anything of that nature were attached to the accounting, other than a copy of the USDA study.

¶ 11 Later that same month, the children filed a petition in the trial court for the removal of Kathleen as the trustee of the trust. Kathleen objected to the petition and argued that she was entitled to reimbursement from the estate or the trust for her family's own money that was spent to support the children over the past several years.

¶ 12 In May 2015, the children filed objections to Kathleen's amended accounting and asked the court to enter a judgment against Kathleen for $190,000, the amount that Kathleen, as trustee, had received from the estate, plus interest. Kathleen filed a motion to dismiss the objections and the request for judgment. In the motion to dismiss, Kathleen asserted for the first time that she had no duty under the law or under the terms of the trust to provide an accounting.

¶ 13 A hearing was held later that month on the contempt sanction to be imposed upon Kathleen and on the children's motion to distribute the remaining estate assets directly to them, rather than to the trust. During arguments on those matters, when Kathleen's attorney asserted that Kathleen had no statutory duty to file an accounting, the trial court responded that Kathleen's attorney was raising something that was "over" and that it had already ordered Kathleen to provide the accounting, which she had failed to do. After the arguments of the attorneys had concluded, the trial court ordered Kathleen to pay the children's reasonable attorney fees related to the filing and prosecution of the rule to show cause as the sanction to be imposed upon the finding of contempt. As for the motion to distribute, the trial court granted the children's motion and ordered Jennifer, as the executor of the estate, to distribute $20,000 of the estate's residuary assets to Camden and $20,000 to Jordan—both of whom had reached the age of 25—as an advance on their one-third share of the remaining trust property. The trial court ordered further that Jennifer was to retain the balance of the estate's assets in her capacity as the executor. Kathleen filed a motion to reconsider.

¶ 14 On two cou...

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