Harris Trust and Sav. Bank v. Donovan

• Decision Date: 19 September 1991
• Docket Number: No. 71139,71139
• Citation: 145 Ill.2d 166,582 N.E.2d 120,163 Ill.Dec. 854
• Parties: , 163 Ill.Dec. 854 HARRIS TRUST AND SAVINGS BANK, as Trustee, v. John M. DONOVAN et al. (John M. Donovan, Appellant; Hallam Thomas Donovan, Appellee).
• Court: Illinois Supreme Court

Page 120

582 N.E.2d 120

145 Ill.2d 166, 163 Ill.Dec. 854

HARRIS TRUST AND SAVINGS BANK, as Trustee, v. John M. DONOVAN et al. (John M. Donovan, Appellant; Hallam Thomas Donovan, Appellee).

No. 71139.

Supreme Court of Illinois.

Sept. 19, 1991.

Rehearing Denied Dec. 2, 1991.

John D. English and J. Timothy Eaton, Coffield, Ungaretti, Harris & Slavin, Chicago, for appellant.

Michael J. Dolesh and Fred J. Posont, Keck, Mahin & Cate, Chicago, and Frank J. Roan, Sarasota, for appellee.

Justice CLARK delivered the opinion of the court:

The issue in this case is whether the illegitimate child of Thomas J. Donovan is entitled to a one-third interest in the family trust executed by Thomas J. Donovan. The circuit court of Cook County held that Thomas J. Donovan did not intend that the illegitimate child be a beneficiary under the family trust. The appellate court reversed and remanded for further proceedings. (203 Ill.App.3d 259, 148 Ill.Dec. 578, 560 N.E.2d 1175.) We granted petitioner John M. Donovan's petition for leave to appeal (134 Ill.2d R. 315).

Thomas J. Donovan (hereinafter decedent) died on August 24, 1982. Probate proceedings were initiated shortly thereafter, and an order declaring heirship determined that the heirs at law and next of kin of decedent were his wife, Marie A. Donovan, and his children John M. Donovan, Patricia D. O'Rourke and Thomas J. Donovan, Jr. Subsequently, on November 18, 1982, Hallam Thomas Donovan notified Harris Trust and Savings Bank, the trustee of decedent's trust and executor of decedent's will, that he too was an heir to decedent's estate. Hallam included a 1964 California decree adjudging Thomas J. Donovan to be his father and ordering decedent to pay child support until Hallam reached the age of 21. According to the record, decedent did pay monthly child support to Hallam's mother and also paid Hallam's medical and educational expenses.

Less than 30 days prior his death, decedent executed the "Thomas J. Donovan Trust," dated July 26, 1982, and the "Thomas J. Donovan Will," dated July 29, 1982. Under decedent's trust instrument, the trust estate was divided into a marital trust and a family trust. Decedent's wife, Marie, was the sole beneficiary of the net income from both trusts during her lifetime. Upon her death, the marital trust, less any estate taxes and certain expenses, was to be added to the family trust.

Pursuant to paragraph 3.2 of the trust instrument, the family trust was divided accordingly:

"3.2 Upon my wife's death, or upon my death if she does not survive me, the Trustee shall divide the Family Trust into separate trusts of equal value, creating one trust for each child of mine other than Thomas J. Donovan, Jr. then living and one trust for the descendants then living, collectively, of each deceased child of mine other than Thomas J. Donovan, Jr. I intentionally make no provision for my son, Thomas J. Donovan, Jr., or his descendants under this paragraph. The Trustee, subject to the following article, shall distribute each trust created for the descendants of a deceased child per stirpes to such descendants." (Emphasis added.)

Under paragraph 5.7 of the trust instrument, "children" and "descendants" were defined:

"5.7 For purposes of this instrument, 'children' and 'descendants' include only lawful blood children and descendants and legally adopted children and descendants; and the 'income beneficiaries' of a trust are the persons eligible to receive current income distributions." (Emphasis added.)

Under decedent's will, decedent bequeathed his personal effects to his wife, Marie, if she survived him. If she did not survive him, decedent's personal effects would go to "[his] children other than Thomas J. Donovan, Jr. who are then living, to be divided between them in shares of substantially equal value as they agree." Decedent further stated, "My only children now living are John M. Donovan, Patricia D. O'Rourke and Thomas J. Donovan, Jr." After disposing of his personal effects, decedent poured the residue of his estate into the Thomas J. Donovan Trust.

On April 27, 1988, Marie Donovan died, and the remaining assets from the marital trust were added to the family trust. Harris Trust, as trustee, then filed a complaint for declaratory judgment asking the trial court to declare that the family trust be divided into two separate trusts of equal value, one for John M. Donovan and one for Patricia D. O'Rourke. Both John M. Donovan and Patricia D. O'Rourke filed answers which agreed with the relief sought by the trustee. Hallam Thomas Donovan filed an answer disagreeing with the trustee, and asking that the trial court divide the family trust into three equal trusts for the benefit of himself, John M. Donovan and Patricia D. O'Rourke.

Subsequently, the trial court granted the trustee's motion for judgment on the pleadings pursuant to section 2-615 of the Illinois Code of Civil Procedure (Ill.Rev.Stat.1987, ch. 110, par. 2-615). The trial court specifically held: that there is no ambiguity in the Thomas J. Donovan Trust dated July 26, 1982; that decedent intended, after the death of his wife, that the family trust be divided into two trusts for the benefit of John M. Donovan and Patricia D. O'Rourke; and that decedent did not intend that either Thomas J. Donovan, Jr., or Hallam Thomas Donovan be beneficiaries of the family trust.

The appellate court held that the trial court erred in concluding that there is no ambiguity in the Thomas J. Donovan Trust and that decedent intended to disinherit Hallam. (203 Ill.App.3d at 264-65, 148 Ill.Dec. 578, 560 N.E.2d 1175.) The appellate court apparently found the trust ambiguous because the original declaration of heirship did not include Hallam Thomas Donovan, indicating that decedent might not have advised the draftsman of Hallam's existence and relationship to decedent. (203 Ill.App.3d at 264, 148 Ill.Dec. 578, 560 N.E.2d 1175.) The appellate court stated that "[i]f the draftsman was not aware of the fact that Hallam was the son and an heir of the decedent, how could he possibly provide for his disinheritance." (203 Ill.App.3d at 264, 148 Ill.Dec. 578, 560 N.E.2d 1175.) In addition, the appellate court concluded that decedent failed to either disinherit Hallam expressly, or to disinherit Hallam by necessary implication. Here, the appellate court points to the sentence in the will which reads, "My only children now living are John M. Donovan, Patricia D. O'Rourke, and Thomas J. Donovan, Jr." The appellate court stated that this sentence is "an obvious factual error and not an express or implied disinheritance of his son, Hallam." (203 Ill.App.3d at 265, 148 Ill.Dec. 578, 560 N.E.2d 1175.) Consequently, the appellate court remanded the cause to the trial court for further proceedings. We now reverse the appellate court, and affirm the trial court's decision.

Initially, we note, as the appellate court did, that decedent's son Thomas J. Donovan, Jr., was clearly and unequivocally disinherited by decedent. He is not a party to this appeal. Further, the trustee moved for judgment on the pleadings pursuant to section 2-615 (Ill.Rev.Stat.1987, ch. 110, par. 2-615). Under a section 2-615 motion, the trial court must examine all pleadings on file, taking as true the well-pleaded facts, and reasonable inferences to be drawn therefrom, set forth in the opposing party's pleadings. (Walker v. State Board of Elections (1976), 65 Ill.2d 543, 553, 3 Ill.Dec. 703, 359 N.E.2d 113; TDC Development Corps. v. First Federal Savings & Loan Association (1990), 204 Ill.App.3d 170, 173, 149 Ill.Dec. 446, 561 N.E.2d 1142.) A judgment on the pleadings is proper only if questions of law and not of fact exist after the pleadings have been filed. Walker, 65 Ill.2d at 553, 3 Ill.Dec. 703, 359 N.E.2d 113.

The first purpose in construing a trust is to discover the settlor's intent from the trust as a whole, which the court will effectuate if it is not contrary to public policy. (First National Bank v. Canton Council of Campfire Girls, Inc. (1981), 85 Ill.2d 507, 513, 55 Ill.Dec. 824, 426 N.E.2d 1198.) In construing trusts in this regard, the court will apply the same rules of construction that are applicable in construing wills. (First National Bank, 85 Ill.2d at 513, 55 Ill.Dec. 824, 426 N.E.2d 1198.) The intention of the settlor is to be ascertained by examining the entire trust and by giving to the words employed their plain and ordinary meaning. (See Feder v. Luster (1973), 54 Ill.2d 6, 11, 294 N.E.2d 293.) If possible, the court should construe the will or trust so that no language used by the testator is treated as surplusage or rendered void or insignificant. (See Weilmuenster v. Swanner (1949), 404 Ill. 21, 24, 87 N.E.2d 756.)

"Every word, phrase and clause in a will should be given effect, if possible, and where one construction of a will would render a portion of it meaningless and another construction would give effect to all provisions and all language, the construction giving effect to the latter construction will be adopted." (Feder, 54 Ill.2d at 11, 294 N.E.2d 293.)

Further, the heirs of a testator cannot be disinherited upon mere conjecture, and when the testator intends to disinherit them he must indicate that intention clearly either by express words or by necessary implication. Dahmer v. Wensler (1932), 350 Ill. 23, 28, 182 N.E. 799.

After analyzing the Thomas J. Donovan Trust, we find that Hallam Thomas Donovan was disinherited by necessary implication. Clearly, decedent did not expressly disinherit Hallam, as he did with Thomas J. Donovan, Jr. Nonetheless, the language in paragraph 5.7 of the trust unambiguously implies that decedent did not intend that Hallam take under the trust. Paragraph 5.7 reads, "For purposes of this instrument, 'children' and 'descendants' include only lawful blood children * * *." (Emphasis added.) The law in Illinois is clear that the word "lawful" under these circumstances is...