Hopper v. Beavers

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Hopper v. Beavers

State: Illinois

Court: 5th District Appellate

Docket No: 5-04-0341 NRel

Case Date: 10/20/2005

NOTICE

Decision filed 11/9//05. The text ofthis decision may be changed orcorrected prior to the filing of aPetition for Rehearing or thedisposition of the same.

CONSOLIDATED NO. 5-04-0341

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

RUTH HOPPER

Petitioner-Appellee

JAMES O. BEAVERS, as Executor of

the Estate of Frederick Conger Hopper,

Deceased, and as Trustee of the Trusts

Created Under Articles VI and VII of the

Will of Frederick Conger Hopper,

JANE G. HOPPER, AUSTIN W.

HOPPER, DAVID W. HOPPER, the

Unbord Descendants of Austin W.

Hopper and David W. Hopper,

BERTRAND HOPPER

MEMORIAL FOUNDATION, and

JUDITH BASTA,

and

DOMINIC JOHN BASTA, JR.

CHRISTOPHER DAVID BASTA,

MATTHEW JOSEPH BASTA,

Respondents-Appellants.

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Appeal from the
Circuit Court of
Christian County.

No. 00-P-67

Honorable

David W. Slater,
Judge, presiding.

JUSTICE HOPKINS delivered the opinion of the court:

This case involves the construction of the "Last Will and Testament" (Will) ofFrederick C. Hopper (testator). The petitioner, Ruth Hopper, the testator's widow and thirdwife (widow), brought this petition to determine the source of her one-third statutory sharefollowing the renunciation of the Will pursuant to section 2-8 of the Probate Act of 1975(Act) (755 ILCS 5/2-8 (West 2004)). The circuit court held that the widow's one-thirdstatutory share is payable entirely from the residue of the testamentary estate and that articleVII of the Will is the "true" residue. The beneficiaries of article VII are the testator's fourstepchildren, respondents Dominic John Basta, Jr., Christopher David Basta, LisaFranchesca Basta, and Matthew Joseph Basta (Basta stepchildren), who had been born tothe testator's second wife, Judith Basta Hopper, whom he divorced in 1991 after 10 yearsof marriage. The circuit court's ruling increases the share of the estate to which the testator'snatural children, from his first marriage, respondents Austin Wiggins Hopper and DavidWilliam Hopper (Hopper children), are entitled. The Basta stepchildren filed a timely noticeof appeal. We affirm.

FACTS

In 1967, the testator married his first wife, respondent Jane G. Hopper. The Hopperchildren were born during the marriage. The testator and his first wife divorced in 1977. In 1981, the testator married his second wife, Judith. Prior to the marriage, the testator andhis second wife signed an antenuptial agreement. The testator and his second wife had nochildren together, but at the time of their marriage, his second wife had four children, theBasta stepchildren, from a previous marriage. The testator and his second wife divorced in1991. In 1993, the testator married his third wife, Ruth. The testator and his third wife hadno children together, and they were still married when the testator died on May 11, 2000.

Even though the testator was a lawyer, he had another lawyer draft the Will. Thetestator signed the Will in 1985 while he was married to his second wife. He never amendedor revoked the Will after his divorce from his second wife, and he never executed anotherwill. The testator's Will contains 12 articles. The relevant portions are as follows.

Article I directs that all the expenses for the funeral, burial, and administration andsettlement of the estate and all debts, taxes, liens, penalties, and interest charges be paid fromthe residue of the testamentary estate. Article II bequeaths the testator's personal propertyto his second wife or, if she predeceases the testator, to the Hopper children and Bastastepchildren. Article III gives the testator's stock in FCH, Inc., to his second wife "providedshe is living" at the time of his death. Article IV gives $50,000 to each of the Hopperchildren and the Basta stepchildren. Article V bequeaths 10% of the "balance of theresidue" of the testamentary estate "remaining after final determination and satisfaction ofthe requirements of [a]rticles I through IV" to respondent Bertrand Hopper MemorialFoundation. Article VI specifies that 45% of the "balance of the residue" of the testamentaryestate be placed into a trust for the benefit of his first wife, to satisfy his legal obligationspursuant to the divorce decree, and that the trust remainder interest be given to the Hopperchildren. Article VII bequeaths "all of the rest and residue of [the testator's] testamentaryestate, including lapsed legacies, bequests[,] and devises and all properties with respect towhich [he possesses] a power of appointment" to a separate trust for the benefit of hissecond wife and the Basta stepchildren. Article VIII directs the executor, during theadministration of the estate and until the trust is established, to pay to his first wife therequired alimony payments and to his second wife 125% of the amounts paid to his firstwife. Article IX directs that all amounts payable pursuant to the Will be paid within 18months of the testator's death. Article X states that the bequests to his second wife weremade with full knowledge of the 1981 antenuptial agreement that she and the testator signed. Article XI states that anyone attempting to contest any part of the Will shall be "disinheritedand disqualified to receive" any portion of the testator's estate. Article XII names theexecutor of the Will.

The testator's Will was admitted to probate shortly after his death. Pursuant to section2-8 of the Act (755 ILCS 5/2-8 (West 2004)), the widow exercised her statutory right torenounce the Will and became entitled to one-third of the testator's estate. See 755 ILCS5/2-8(a) (West 2004).

On April 28, 2004, the circuit court determined that although articles V, VI, and VIIprovided for distribution of the "residue," the trust created by article VII was the "true"residue of the estate. Consequently, the widow's one-third share was payable entirely fromthe article VII trust. The court also determined that the FCH, Inc., stock should be addedto article VII, the "true" residue of the estate, because section 4-7 of the Act (755 ILCS 5/4-7(West 2004)) states that if a will is executed during a marriage and the marriagesubsequently ends in a divorce, the will takes effect as if the spouse had predeceased thetestator. The circuit court determined that because the testator did not name a contingentbeneficiary for article III, the article lapsed, and the property was added to article VII, the"true" residuary clause.

The circuit court ordered the executor to recalculate the amounts due to thebeneficiaries based on the foregoing ruling. The executor determined that the gross estatewas $31,990,259 and that the net estate was $17,444,607. The widow's one-thirdrenunciation share was $5,814,869, or one-third of $17,444,607. The executor determinedthe distribution, in relevant part, as follows:

45% in trust for the Hopper children plus the claim $8,269,954

for alimony

45% to the Basta stepchildren $8,269,954

Plus lapsed bequest of stock $ 55,000

Less Ruth's one-third renunciation share $5,814,869

Net share to the Basta stepchildren $2,510,597

The Basta stepchildren appeal.

ANALYSIS

On appeal, the Basta stepchildren initially contend that because the word "residue"is used in articles V, VI, and VII, the Will contains multiple residuary clauses and thewidow's renunciation share should be paid equally from each of the foregoing articles ratherthan from article VII alone. We disagree.

Construing a will without resort to extrinsic evidence is a question of law, which thiscourt reviews de novo. Gridley v. Gridley, 399 Ill. 215, 221-29 (1948). When construinga will, a court must give effect to the testator's intent based on all of the words used in thewill. Feder v. Luster, 54 Ill. 2d 6, 10-11 (1973). While the language of the will is the bestproof of the testator's intent, when a latent ambiguity exists, evidence extrinsic to the will,such as the circumstances under which the instrument was drafted and the state of thetestator's property and his family, may be utilized. Cain v. Finnie, 337 Ill. App. 3d 318, 320(2003).

Articles V, VI, and VII each contain the term "residue." Article V bequeaths 10%of the "balance of the residue" (emphasis added) of the testamentary estate "remaining afterfinal determination and satisfaction of the requirements of [a]rticles I through IV" to theBertrand Hopper Memorial Foundation. Article VI specifies that 45% of the "balance of theresidue" (emphasis added) of the testamentary estate be placed into a trust for the benefit ofhis first wife, to satisfy his legal obligations pursuant to a divorce decree, and that the trustremainder interest be given to the Hopper children. Article VII bequeaths "all of the restand residue of [the testator's] testamentary estate, including lapsed legacies, bequests[,] anddevises and all properties with respect to which [he possesses] a power of appointment"(emphasis added) to a separate trust for the benefit of his second wife and the Bastastepchildren. Hence, a review of articles V, VI, and VII demonstrates significantdifferences.

Article V grants a precise percentage of whatever remains after implementation of thefirst four articles. Article VI refers to the residue in a similar manner as article V. ArticleVII clearly grants everything else that is left over by using the language "all of the rest." SeeBergheger v. Boyle, 258 Ill. App. 3d 413, 418 (1994) ("residue" means the probate estateremaining after charges, debts, and particular legacies); Molner v. Silbert, 8 Ill. App. 2d 388,394 (1956) ("rest and residue" mean the estate remaining after the payment of charges, debts,and particular legacies).

The Basta stepchildren argue that the Will has multiple residuary clauses. In supportof their argument, they cite In re Estate of Georgen, 2 Ill. App. 3d 750, 755-56 (1971), andIn re Estate of Julian, 227 Ill. App. 3d 369, 372-73, 379 (1991).

In In re Estate of Georgen, 2 Ill. App. 3d at 753, the will contained one article thatdisposed of " 'all the rest of [the testator's] personal property and all of [the testator's] realestate' " and another article that used the terms " 'all the rest, residue[,] and remainder of [thetestator's] estate.' " The In re Estate of Georgen court determined that both of theaforementioned articles were residuary dispositions. The court noted that even though theclassic term "residue" was not found in the first article, the language "all the rest" did appearand certainly implied an intended residuary clause. The court pointed out that "all the rest"is classic residuary language. In In re Estate of Julian, 227 Ill. App. 3d at 378-79, the courtdetermined that because two articles contained identical language referring to the "residue,"it was possible that the testator intended for both articles to be residuary clauses.

Although we agree that a will may have multiple residuary clauses, In re Estate ofGeorgen and In re Estate of Julian are distinguishable from the instant case. In In re Estateof Georgen, the will stated "all the rest" in two separate paragraphs. In the instant case, theWill only states "all of the rest" in article VII. Additionally, the Will in the instant case doesnot refer to the residue in two separate articles in precisely the same manner. Cf. In re Estateof Julian, 227 Ill. App. 3d at 378-79.

The case at hand is similar to Greene v. United States, 447 F. Supp. 885 (N.D. Ill.1978) (construing Illinois law). In Greene, the testator gave 10% of his residuary estate toa charitable foundation. Greene, 447 F. Supp. at 896. In the next article of the will, thetestator gave " 'one-half of all of the rest, residue[,] and remainder' " of the estate to hisspouse. Greene, 447 F. Supp. at 896. In a third article, he made a gift to a trust of " 'theentire remainder of [his] estate (hereinafter referred to as the "Residuary Estate").' " Greene,447 F. Supp. at 896. The Greene court determined that the last provision, the one disposingof the "entire remainder," was the "true residue" of the estate. The Greene court noted thatthis concept has been accepted in Illinois and described it as follows:

" 'When the residue of an estate is disposed of in parts or fractions, it isfrequently necessary to determine whether the testator intends the respectiveparts or fractions to constitute subdivisions of the entire residue, or toconstitute preliminary and ultimate residues with the final part representingthe "true" residue or, as it is sometimes called, the "residue of the residue."

An illustration of a share disposed of as a subdivision of the entireresidue is one which divides the residue into two parts, with one part beinggiven half to A and half to B, and the other part being given half to C and halfto D. A typical case of a "true" residue is one in which the testator[,] indisposing of his residuary estate, carves therefrom portions of the residue anddisposes of those portions to designated persons or users and then passes thatwhich remains to others. In such case the "true" residue is the final portion.

In general, the test of whether a share or part is a subdivision of theentire residue, or constitutes one of several residues with the final divisionbeing the "true" or ultimate residue, turns on the language used by the testatorin describing the final portion. If he gives "whatever remains" or "the balanceafter making particular gifts," or other terminology indicative of an intent thatthe final division is a "catchall" for what may not have been disposed of byprior gifts, the disposition will normally be construed as one of preliminaryand ultimate residues.'

1 James, [Illinois Probate Law and Practice], at 43.51a (1975 Supp. by AustinFleming) (emphasis in original; citations omitted)." Greene, 447 F. Supp. at 897.

This is precisely what occurred in the instant case. A review of article VIIdemonstrates that the testator intended to dispose of "all of the rest and residue" of his estate,or the balance that was left over, after his earlier bequests. The words chosen in article VIIdemonstrate that the testator knew that there was no assurance of what the Basta stepchildrenwould receive either in amount or in comparison to the article VI trust for the Hopperchildren. Hence, the final language in article VII demonstrates that it is the "true residue"of the testator's estate.

The Basta stepchildren claim that the foregoing construction of the Will cannot becorrect because the testator intended to treat them "essentially the same" as his own children. We disagree.

Even construing the Will in a light most favorable to the Basta stepchildren, it is clearthat the testator did not intend to treat them "essentially the same" as the Hopper children. If the testator had wanted to treat the Basta stepchildren the same as the Hopper children,he would have done so instead of having the Basta stepchildren's inheritance dependentupon other contingencies. In fact, when the testator wanted the Basta stepchildren to inheritthe same as the Hopper children, he made that clear. For example, article IV provides a$50,000 legacy for each of the Hopper children and each of the Basta stepchildren. Incontrast, articles VI and VII are materially different from each other. In article VI, thetestator specifically identifies 45% of the "balance of the residue" to the Hopper children asopposed to article VII, which gives "all of the rest and residue" (emphasis added) to theBasta stepchildren. No percentage of the estate is specified for the Basta stepchildren. Additionally, the testator made clear that he intended for each of the Hopper children toreceive at least twice as much as each of the Basta stepchildren because there are only twoHopper children as opposed to four Basta stepchildren. Hence, he never intended to treatthe Basta stepchildren "essentially the same" as the Hopper children.

Alternatively, the Basta stepchildren argue that section 2-8(d) of the Act (755 ILCS5/2-8(d) (West 2004)) requires that the widow's one-third renunciation share be paidproportionately out of articles V, VI, and VII. We disagree.

It is necessary to examine the statutory history of the spouse's renunciation share tounderstand why that share must come from article VII, the "true" residuary clause of theWill.

In 1903, section 79 of "An Act in regard to the administration of estates" provided:

"In all cases where a widow or surviving husband shall renounce all benefitunder the will, and the legacies and bequests therein contained, to other persons,shall, in consequence thereof, become diminished or increased in amount, quantity[,]or value, it shall be the duty of the court, upon settlement of such estate, to abate fromor add to such legacies and bequests in such manner as to equalize the loss sustainedor advantage derived thereby, in a corresponding ratio to the several amounts of suchlegacies and bequests, according to the amount or intrinsic value of each." Hurd'sRev. Stat. 1903, ch. 3, par. 78.

Section 79 was in substantially the same form as early as 1845. See Lewis v. Sedgwick, 223Ill. 213, 222 (1906).

The general rule was that a specific legacy is a gift of a specific part of a testator'sestate, identified and distinguished from all things of the same kind, and can only besatisfied by the delivery of the particular thing and that if the estate for any reason shouldturn out to be less than the testator anticipated, or if for any reason there is required anabatement of any of the legacies, general legacies or residuary funds must first be abatedbefore any abatement of the specific legacies could be required. Lewis, 223 Ill. at 222. Thisis so because specific legacies and devises are not in the same class as those that areresiduary. Pace v. Pace, 271 Ill. 114, 120 (1915). As a general rule, residuary legatees anddevisees take what is left, and their legacies and devises abate before specific devises. Pace,271 Ill. at 120-21; Kincaid v. Moore, 233 Ill. 584 (1908); Lewis, 223 Ill. at 221.

As the Lewis court noted:

"It is to be presumed that the legislature had in mind the law requiring generallegacies first to be abated before trenching on the funds of the specific legatees. Wedo not believe it was their intention to make a different rule in the case ofrenunciation affecting legacies than in other cases where legacies were diminishedor increased, but rather to apply the same rule. Such is the construction we give tothis statute. Our conclusion in this regard is strengthened by the fact that any otherwould render the distribution of an estate, where the widow or surviving husbandrenounces under the provisions of the will, exceedingly difficult and expensive. Suchfacts should not overthrow any clear statutory provisions[] but may assist in learningthe intent of the statute when it is not otherwise entirely clear." Lewis, 223 Ill. at 222.

In 1939, section 50 of the Probate Act (Ill. Rev. Stat. 1939, ch. 3, par. 202) (thesection 79 successor (see In re Estate of Brinkman, 26 Ill. App. 3d 780, 783 (1975))) alsorequired the discriminatory abatement of legacies by classes. See In re Estate of Brinkman,26 Ill. App. 3d at 782. Section 50 of the Act stated:

"When a surviving spouse of the testator renounces the will and the legaciesto other persons are thereby diminished or increased in value, the probate court, uponsettlement of the estate, shall abate from or add to the legacies in such a manner asto equalize proportionately the loss or advantage resulting therefrom." Ill. Rev. Stat.1939, ch. 3, par. 202.

In 1965, section 50 of the Act (Ill. Rev. Stat. 1965, ch. 3, par. 50) was changed veryslightly to state:

"When a surviving spouse of the testator renounces the will and the legaciesor devises to other persons are thereby diminished or increased in value, the court,upon settlement of the estate, shall abate from or add to the legacies or devises insuch a manner as to apportion the loss or advantage among the legatees and deviseesin proportion to the amount and value of their legacies and devises."

Currently, section 2-8(d) of the Act (755 ILCS 5/2-8(d) (West 2004)) states:

"If a surviving spouse of the testator renounces the will and the legacies toother persons are thereby diminished or increased in value, the court, upon settlementof the estate, shall abate from or add to the legacies in such a manner as to apportionthe loss or advantage among the legatees in proportion to the amount and value oftheir legacies."

The Basta stepchildren argue that the changes in the foregoing statutes confirm thatany loss or advantage due to the spouse's renunciation must be apportioned among thedevisees and legatees without distinction for class or kind. We disagree.

The Basta stepchildren did not cite or discuss In re Estate of Brinkman, 26 Ill. App.3d 780, a case involving the interpretation of section 50, as amended in 1965, which issubstantially in the same form as the current section 2-8(d) of the Act (755 ILCS 5/2-8(d) (West 2004)). The issue on appeal in In re Estate of Brinkman was basically the same as theone in the present case: whether the 1965 amendment of section 50 of the Act (Ill. Rev. Stat.1965, ch. 3, par. 50) changed the discriminatory abatement rule to a nondiscriminatoryabatement rule that favors residuary legatees. The residuary legatees in In re Estate ofBrinkman made the same argument as the Basta stepchildren in the instant case: that everyamendment to a statute is presumed to intend a change in the existing law and that theamendment of section 50 of the Act (Ill. Rev. Stat. 1965, ch. 3, par. 50) reflected the GeneralAssembly's intent to change the rule of discriminatory abatement.

However, a comparison of the statute before the 1965 amendment and the statute afterthe 1965 amendment demonstrates that the only apparent change was to eliminate thedistinction between the treatment of real property and the treatment of personal propertyduring the administration of a decedent's estate. See In re Estate of Brinkman, 26 Ill. App.3d at 782. The In re Estate of Brinkman court noted that an almost identical problem hadoccurred in Lewis, where a question arose regarding whether the legislature intended oldsection 50's predecessor, section 79, to change the general rule that " 'general legacies orresiduary funds must first be abated before any abatement of the specific legacies could berequired.' " In re Estate of Brinkman, 26 Ill. App. 3d at 782-83 (quoting Lewis, 223 Ill. at222). The In re Estate of Brinkman court agreed with the Illinois Supreme Court's reasoningin Lewis and concluded that if the legislature intended to make a different rule for theabatement of legacies and devises to fund the widow's or widower's statutory share uponrenunciation of the will, the legislature should have done so "using clear statutory languageto that effect." In re Estate of Brinkman, 26 Ill. App. 3d at 783. The 1965 amendment doesnot clearly indicate a change in the law in this respect. It indicates only that the legislatureintended to eliminate the distinction between the treatment of real property and the treatmentof personal property during the administration of a decedent's estate. Therefore, section 50,as amended in 1965, does not change the discriminatory rule of abatement by classes. SeeIn re Estate of Brinkman, 26 Ill. App. 3d at 783.

Because section 2-8(d) of the Act (755 ILCS 5/2-8(d) (West 2004)) is virtuallyidentical to section 50, as amended in 1965 (Ill. Rev. Stat. 1965, ch. 3, par. 50), we hold thatsection 2-8(d) of the Act does not change the discriminatory rule of abatement by classes. The Basta stepchildren claim that even if article VII is the only residuary clause in theWill, the bequest to the Hopper children was a general legacy and thus residuary and generallegacies abate simultaneously to fund a spouse's renunciation share. We disagree.

In Kincaid v. Moore, 138 Ill. App. 23, 29-30 (1907), the decedent's will provided forgeneral legacies and annuities in specific dollar amounts. The circuit court held that thoselegacies abated for the benefit of the residuary legatees after the decedent's widowrenounced the will. This ruling was based on section 79 of "An Act in regard to theadministration of estates" (Hurd's Rev. Stat. 1903, ch. 3, par. 78). The appellate courtreversed this ruling, and ultimately, the Illinois Supreme Court approved the appellate court'sanalysis. Kincaid, 233 Ill. at 591. The appellate court stated:

"But while the so-called specific legacies and the annuities here in question[] standupon the same footing as to propriety, we do not think it is contemplated by thestatute that such general legacies should abate for the benefit of residuary legatees. Nor does the Lewis case *** so hold. It is undoubtedly true, as is there stated, thatunder the statute general or residuary legacies must abate for the benefit of specificlegacies if necessary. *** We do not understand, however, that where there is ampleestate to pay both specific and general legacies, the latter must abate for the benefitof residuary legatees. Residuary legacies carry only that which is left after all expressor prior dispositions of the testator have been satisfied; hence residuary legatees canin no case call upon general or specific legatees to abate unless it is expressly soprovided by the terms of the will." (Emphasis added.) Kincaid, 138 Ill. App. at 31.

Even though the Illinois Supreme Court in Kincaid reversed the appellate court'sdecision based on the specific language in the will, the court noted its agreement with theappellate court's analysis. Kincaid, 233 Ill. at 591 ("[i]f no aid could be found in the will forthe solution of this question[,] we would be disposed to agree with the Appellate Court, asthe decision of that court is sustained by the decision of this court in [Lewis]").

For these reasons, the trial court properly found that the widow's one-thirdrenunciation share must be paid from article VII, the residue of the testator's estate.

In the alternative, the Basta stepchildren argue that the widow's one-thirdrenunciation share is payable from article I of the Will as a part of the "settlement" of thetestator's estate. We disagree.

While we state no opinion regarding whether the widow's renunciation share is anexpense incurred in the "settlement" of the estate, article I clearly states that any expensesincurred in the "settlement" of the estate are to be paid from the "residue" of the estate. Wehave already determined that article VII is the "true" residue of the estate and that thewidow's renunciation share is payable from that article. This argument, therefore, isunavailing.

CONCLUSION

For these reasons, the order of the circuit court of Christian County is affirmed.

Affirmed.

DONOVAN, P.J., and CHAPMAN, J., concur.