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Keywords

trustwill
trustwill

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Johnson v. La Grange State Bank, 73 Ill.2d 342, 383 N.E.2d 185, 22 Ill.Dec. 709

Facts

H. Franklin Johnson and Eleanor Johnson were married for over 36 years. Eleanor, diagnosed with terminal cancer, executed a revocable inter vivos trust in which she placed most of her assets, intending to benefit her relatives and charities. Concurrently, she executed new wills that altered the distribution of her estate. In a separate case, Myra Havey created joint accounts with her sister-in-law, intending to deprive her husband of marital rights. Both husbands contested the validity of these transfers after their wives' deaths.

In 1966, Mrs. Johnson learned that she had cancer; she later learned that her life expectancy was less than five years. In the summer of 1970, Mrs. Johnson executed a new will and again in February of 1972, seven months before her death, she executed another will and simultaneously executed a revocable Inter vivos trust in which she placed in trust substantially all of her assets.

Issue

Whether the inter vivos trust created by Eleanor Johnson and the joint accounts established by Myra Havey were valid against the marital rights of their surviving husbands.

Whether the inter vivos trust created by Eleanor Johnson and the joint accounts established by Myra Havey were valid against the marital rights of their surviving husbands.

Rule

An inter vivos transfer of property is valid against the marital rights of the surviving spouse unless the transaction is tantamount to a fraud, indicated by the absence of donative intent to convey a present interest in the property.

An inter vivos transfer of property is valid as against the marital rights of the surviving spouse unless the transaction is tantamount to a fraud as manifested by the absence of donative intent to make a conveyance of a present interest in the property conveyed.

Analysis

The court applied the 'retention of ownership' test to determine the validity of the inter vivos trust created by Eleanor Johnson. It found that she retained significant control over the trust assets, but this did not render the trust invalid. The court also noted that the joint accounts created by Myra Havey were established with sufficient donative intent, despite the intent to deprive her husband of his marital rights.

The court applied the 'retention of ownership' test to determine the validity of the inter vivos trust created by Eleanor Johnson. It found that she retained significant control over the trust assets, but this did not render the trust invalid.

Conclusion

The court affirmed the appellate court's decision regarding the validity of the inter vivos trust and the joint accounts, concluding that both transfers were valid and did not violate the surviving spouses' marital rights.

The court affirmed the appellate court's decision regarding the validity of the inter vivos trust and the joint accounts, concluding that both transfers were valid and did not violate the surviving spouses' marital rights.

Who won?

The prevailing parties were the trustees and beneficiaries of the trusts and joint accounts, as the court upheld the validity of the transfers against the claims of the surviving husbands.

The prevailing parties were the trustees and beneficiaries of the trusts and joint accounts, as the court upheld the validity of the transfers against the claims of the surviving husbands.

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