Rose v. St. Louis Union Trust Co.

• Citation: 253 N.E.2d 417,43 Ill.2d 312
• Decision Date: 26 November 1969
• Docket Number: No. 41783,41783
• Parties: Louise W. ROSE, Appellee, v. ST. LOUIS UNION TRUST COMPANY et al. Appeal of St. Louis Union Trust Company.
• Court: Supreme Court of Illinois

Page 417

253 N.E.2d 417

43 Ill.2d 312

Louise W. ROSE, Appellee, v. ST. LOUIS UNION TRUST COMPANY et al. Appeal of St. Louis Union Trust Company.

No. 41783.

Supreme Court of Illinois.

Nov. 26, 1969.

C. E. Heiligenstein and W. E. Ackermann, Belleville, for appellant.

Hoagland, Maucker, Bernard & Almeter, Alton (James K. Almeter, Alton, of counsel), for appellee.

UNDERWOOD, Chief Justice.

Plaintiff, Louise W. Rose, sued individually and as co-executor of the estate of her deceased husband, Clarence S. Rose, to set aside a trust created by decedent, and to order the St. Louis Union Trust Company to transfer to her assets of her husband's estate in an amount necessary to satisfy plaintiff's marital rights under her renunciation of decedent's will.

The circuit court of St. Clair County, after a trial without a jury, entered a decree in plaintiff's favor holding the Inter vivos trust to be an invalid testamentary disposition and also a fraud on plaintiff's marital rights. Defendants appealed, and the appellate court partially reversed and remanded, finding that the trust was not invalid as a testamentary disposition but was a fraud upon plaintiff's marital rights, and awarded her what she would be allowed under Illinois law if decedent died intestate. (Rose v. St. Louis Union Trust Co., 99 Ill.App.2d 81, 241 N.E.2d 16.) We granted leave to appeal.

Briefly stated, the factual situation is that plaintiff, Louise Rose, and the testator, Clarence S. Rose, were married in 1927. It was a second marriage for the testator, and there were no children by that marriage. The testator, however, had two children by a prior marriage, defendants C. Stephen Rose, Jr. and Henrietta Rose Passega. In 1955 the testator, Clarence Rose, while a resident of Missouri, executed a will providing that his two children were to share 60% Of his estate and that plaintiff was to receive the income from the remaining 40% Of the estate for life, with a noncumulative right to $2,000 principal annually, and upon her death this 40% Of the residue was to be divided equally between his children.

In March, 1956, the testator sold his business, and sometime later that year he moved to East St. Louis. In July, 1958, while a resident of East St. Louis, he executed an irrevocable Inter vivos trust with defendant St. Louis Union Trust Company as trustee, and transferred substantial assets into the trust. Under that trust the settlor was to receive the income thereon for life and upon his death the trustee was to divide 60% Of the assets equally between his children and hold the remaining 40% In trust for his wife on much the same terms as the prior testamentary trust under the 1955 will. In September, 1958, the testator executed a codicil to his will. He eliminated the testamentary trust provision in the 1955 will respecting 40% Of the property, and substituted a provision whereby the 40% Became part of the Inter vivos trust.

There is no evidence in the record of what property, if any, passed to plaintiff by joint tenancy, or the amount of assets in the estate or in the trust, except the court's statement, 'The assets transferred constituted the bulk of decedent's estate.' The defendant trustee has made payments pursuant to the trust totalling 60% Of the trust estate to the decedent's children, and has paid State and Federal inheritance taxes computed on the basis of the validity of the trust and unrenounced will and codicil.

We believe the appellate court's disposition of the issues in this case was adequate except for its holding that the Inter vivos trust was a fraud on plaintiff's marital rights. That determination, in our opinion, cannot properly be made on the basis of the record presently before the court.

As stated by the appellate court: 'The trust was negotiated and executed in St. Louis, Missouri, and was administered in Missouri by defendant, a Missouri corporation with its principal place of business in Missouri. The trust corpus was kept in Missouri and the trust agreement used Missouri law to determine rights to the corpus should the grantor die without his wife or children surviving him. Plaintiff alleged that Missouri law governed the trust's validity and the case was tried and determined on this basis.' 99 Ill.App.2d 81, 85, 241 N.E.2d 16, 18.

We agree that Missouri law controls the validity of the trust. In our judgment that trust, created in 1958, some five years before the settlor died, was a valid Inter vivos trust, even though he retained a life estate and was given certain 'courtesy consultation' rights by the trustee, as testified to by the bank vice-president. (West v. Miller (7th cir., 1935), 78 F.2d 479, cert. den. 296 U.S. 333, 56 S.Ct. 156, 80 L.Ed. 450; see 49 A.L.R.2d 525.) That determination, however, does not resolve the question whether the trust was a fraud on plaintiff's marital rights. Under Missouri law transfers by Inter vivos trusts, where they were a fraud on the widow's marital rights, have long been the subject of equity jurisdiction. (Edgar v. Fitzpatrick (Mo.App.1963), 369 S.W.2d 592, 599, reversed...