In Re Estate of Phelan

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State: Illinois

Court: 1st District Appellate

Docket No: 1-06-0820 Rel

Case Date: 08/06/2007

Preview:FIRST DIVISION AUGUST 06, 2007

No. 1-06-0820

IN RE ESTATE OF

) ) JOHN J. PHELAN, ) ) Deceased ) ) (Nora Phelan Clifford, ) ) Plaintiff-Appellant and ) Cross-Appellee, ) ) v. ) ) Jimmie "Red" Baskin, a/k/a Jimmy Baskin,) as Executor of the Will of John Phelan, ) and as Successor Trustee of the ) Declaration of Trust of John Phelan, ) dated, July 7, 2000, for the benefit of ) Karen Phelan, Joseph Phelan, Ryan ) Phelan, Nora Phelan Clifford and Nellie ) Phelan Wilson; Anthony J. D'Alexander, ) as Trustee of the MJRNN Irrevocable ) Trust dated June 1, 1999, for the ) benefit of Karen Phelan, Joseph Phelan, ) Ryan Phelan, Nora Phelan Clifford and ) Nellie Phelan Wilson, Karen Phelan, ) Joseph Phelan, Ryan Phelan, Nellie ) Phelan Wilson, Wyatt Wilson, and Joseph ) Patrick Clifford, ) ) Defendants-Appellees and ) Cross-Appellants). )

Appeal from the Circuit Court of Cook County, Illinois, County Department, Probate Division

No. 00 P 10864

The Honorable, Jeffrey A. Malak, Judge Presiding.

No. 1-06-0820

JUSTICE GARCIA delivered the opinion of the court. John J. Phelan established two separate trusts to provide for his wife and their two minor sons and his two adult daughters from prior marriages. In the first trust, MJRNN Irrevocable

Trust (MJRNN Trust), he included his two adult daughters as beneficiaries. In the second, the revocable Declaration of Trust

(Revocable Trust), he provided for his wife and two minor sons but did not provide for his two adult daughters. This appeal

concerns the validity of those two trusts and the pourover provision of his will. The plaintiff, Nora Phelan Clifford, one of the two daughters, appeals from an order of the trial court granting the defendants' motion for a finding pursuant to section 2-1110 of the Code of Civil Procedure (735 ILCS 5/2-1110 (West 2002)) on her reformation claims of her amended complaint and amended petition. The plaintiff contends she presented sufficient

evidence to establish a prima facie case to reform both the MJRNN Trust and the Revocable Trust. In the cross-appeal, the defendants, specifically Jimmie Baskin, acting as executor of the will and trustee of the Revocable Trust, argue that the trial court erred when it found 2

No. 1-06-0820 that the Revocable Trust was not in existence at the time the decedent, John Phelan, executed his will. Based on this finding,

the trial court determined that the pourover residuary provision of the will failed, resulting in the residue of the estate passing according to the laws of descent and distribution as if the estate were intestate. Because we find the plaintiff has failed to carry her burden during her case in chief to warrant reformation of either trust, we affirm the trial court's judgment against the plaintiff. Because we find the Revocable Trust was in existence at the time the will was executed, we reverse the trial court's judgment on the cross-appeal. BACKGROUND The decedent, John Phelan, died on November 27, 2000. He

was survived by his wife, Karen Phelan, their two minor sons, Joseph and Ryan, and two adult daughters from previous marriages, the plaintiff and Nellie Phelan Wilson. Phelan provided for the

distribution of his assets in the MJRNN Trust, the Revocable Trust, and his will. In 1999, Phelan contacted his brother-in-law Anthony D'Alexander and asked him to prepare an irrevocable life insurance trust for him. The trust, known as the MJRNN Trust,

was to be funded with life insurance proceeds of $1.3 million and 3

No. 1-06-0820 it named, among others, the plaintiff and Wilson as beneficiaries. Regarding the funding of a trust with proceeds of

a life insurance policy, section 2035 of the Tax Code (26 U.S.C.

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