{ "id": 5482684, "name": "In re ESTATE OF FRANK RUDOLPH PETERSON.-(CAROL WILSON, Appellant, v. ILLINOIS NATIONAL BANK AND TRUST COMPANY, Conservator of the Estate of Frank Rudolph Peterson, Appellee.)", "name_abbreviation": "Wilson v. Illinois National Bank & Trust Co.", "decision_date": "1982-02-04", "docket_number": "No. 81-80", "first_page": "481", "last_page": "487", "citations": [ { "type": "official", "cite": "103 Ill. App. 3d 481" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "202 Ill. App. 606", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5410898 ], "pin_cites": [ { "page": "610" } ], "opinion_index": 0, "case_paths": [ "/ill-app/202/0606-01" ] }, { "cite": "77 Ill. 2d 335", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5489748 ], "pin_cites": [ { "page": "338" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/77/0335-01" ] }, { "cite": "387 Ill. 542", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2497292 ], "pin_cites": [ { "page": "546" } ], "opinion_index": 0, "case_paths": [ "/ill/387/0542-01" ] }, { "cite": "27 Ill. App. 2d 228", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5786397 ], "pin_cites": [ { "page": "235-36" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/27/0228-01" ] }, { "cite": "86 Ill. App. 2d 472", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2550818 ], "pin_cites": [ { "page": "477-78" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/86/0472-01" ] }, { "cite": "28 Ill. App. 3d 303", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5409712 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/28/0303-01" ] }, { "cite": "17 Ill. App. 3d 894", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2511654 ], "pin_cites": [ { "page": "900" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/17/0894-01" ] }, { "cite": "32 Ill. 2d 134", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2839254 ], "weight": 2, "pin_cites": [ { "page": "138" }, { "page": "137-38" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/32/0134-01" ] } ], "analysis": { "cardinality": 627, "char_count": 14352, "ocr_confidence": 0.817, "pagerank": { "raw": 7.250134912538216e-08, "percentile": 0.43234528345088846 }, "sha256": "cea5140f18c277d874381ede62486d118fb0c8e62fc5a9b847093ae56fda7f95", "simhash": "1:ad8f047273b57c94", "word_count": 2324 }, "last_updated": "2023-07-14T15:16:39.830915+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "In re ESTATE OF FRANK RUDOLPH PETERSON.\u2014(CAROL WILSON, Appellant, v. ILLINOIS NATIONAL BANK AND TRUST COMPANY, Conservator of the Estate of Frank Rudolph Peterson, Appellee.)" ], "opinions": [ { "text": "JUSTICE VAN DEUSEN\ndelivered the opinion of the court:\nThis is an appeal from a portion of an order closing a conservator\u2019s estate. The trial court ruled that the beneficiary of three \u201cTotten Trust\u201d accounts was not entitled to the interest earned on these accounts during the period of the settlor\u2019s incompetency where the interest was expended by the conservator for the upkeep and maintenance of the incompetent even though there were other cash assets of the incompetent from which those expenses might have been paid. Carol Wilson, the beneficiary of these accounts, has appealed.\nDuring 1973, Frank Rudolph Peterson opened a savings account in each of the following Rockford, Illinois, institutions: Loves Park Savings & Loan Association, American National Bank & Trust Co., and First Federal Savings & Loan Association. All three accounts named Mr. Peterson as the trustee and his niece, Carol Wilson, as beneficiary of the accounts at his death.\nOn June 17, 1977, letters of office for conservator to collect for the estate of Frank Rudolph Peterson, incompetent, were issued to the Illinois National Bank & Trust Co. of Rockford (hereinafter Bank). On May 19, 1978, Mr. Peterson was adjudged incompetent and the Bank was named as conservator of his estate. The incompetent died on June 25, 1980. The conservatorship was continued until January 22,1981, when it was closed.\nIn its January 22,1981, order, the trial court authorized distribution of the balances in the trust accounts in question as of the date of the settlor\u2019s death, along with interest earned on said accounts subsequent to the settlor\u2019s death, to the appellant. The order authorized a similar distribution to the beneficiary of another Totten trust account. That beneficiary is not a party to this action. The remaining assets of the conservatorship, after payment of approved fees, were ordered transferred to the estate of Frank Rudolph Peterson, deceased.\nDuring the administration of the conservatorship the Bank established a single checking account into which it deposited all of the income, the rents and the interest from all of the assets of the incompetent. All of the expenses for the maintenance and support of the incompetent and his estate were paid from this account. Although the Bank left undisturbed the principal of the three savings accounts in question, the Bank requested that the interest payments from the trust accounts be made to it as the conservator, and the accrued interest from these accounts was deposited in the single checking account.\nThere is no dispute that the conservator bank expended funds out of the single conservatorship checking account for the incompetent\u2019s maintenance and support and costs of the administration of the incompetent\u2019s estate. It is clear that these expenses exceeded the interest and other income of the estate during the period of incompetency so that it was necessary for the conservator to expend some principal (other than that of the three savings account trusts) for these purposes. It is also apparent from the evidence that the incompetent\u2019s assets, excluding the trust accounts in question (including interest), were at all times sufficient to pay the expenses of the incompetent\u2019s estate.\nOn December 16,1980, the trial court ruled that the conservator bank had properly collected the income from the trust accounts in question, deposited that income into the conservatorship checking account and paid the expenses for the settlor out of that account. The trial court did grant the trust beneficiary, Carol Wilson, the balance of the three accounts as of the date of Peterson\u2019s death, which included the unimpaired principal. The court also granted Carol Wilson interest earned subsequent to the settlor\u2019s death, but did not grant her the interest which had accrued during the settlor\u2019s incompetency and had been withdrawn by the conservator and expended for the care and maintenance of the incompetent-settlor.\nThe single issue posed in this appeal is whether the interest earned on a Totten trust, during the settlor\u2019s incompetency, is entitled to a priority which would require the conservator to expend all other assets of the incompetent\u2019s estate before expending this interest.\nThe Illinois Supreme Court has addressed the nature and validity of Totten trusts and accepted the position adopted by the American Law Institute in section 58 of the Restatement (Second) of Trusts (1959):\n\u201c \u2018Where a person makes a deposit in a savings account in a bank or other savings organization in his own name as trustee for another person intending to reserve a power to withdraw the whole or any part of the deposit at any time during his lifetime and use as his own whatever he may withdraw, or otherwise to revoke the trust, the intended trust is enforceable by the beneficiary upon the death of the depositor as to any part remaining on deposit on his death if he has not revoked the trust.\u2019 \u201d (In re Estate of Petralia (1965), 32 Ill. 2d 134, 138.)\nThe declaration of trust immediately creates an equitable interest in the beneficiaries although the enjoyment of that interest is postponed until the death of the settlor regardless of the fact that the interest is highly destructible because the settlor retains power of revocation. (32 Ill. 2d 134, 137-38.) The beneficiary of a Totten trust holds a present, although defeasible, interest therein contemporaneous with the settlor\u2019s superior rights; the settlor\u2019s death, however, terminates his right and renders the beneficiary\u2019s indefeasible. (In re Estate of Wright (1974), 17 Ill. App. 3d 894, 900.) Because Carol Wilson became entitled to the trust accounts by reason of having survived Frank Rudolph Peterson, who held a superior interest in the accounts during his lifetime, her interest as Totten trust beneficiary may properly be characterized as a survivorship interest. See Black\u2019s Law Dictionary 1297 (5th ed. 1979); Ill. Rev. Stat. 1979, ch. 32, par. 770(d).\nAppellant cites In re Estate of Lastick (1975), 28 Ill. App. 3d 303, to support the position that her survivorship interest in the Totten trust accounts could not be destroyed or altered by the conservator in the absence of a showing that Peterson\u2019s other assets were insufficient to provide for his support and maintenance. The appellant insists that interest on Totten trusts may be expended for the settlor\u2019s support and maintenance, but only after other assets of the estate are depleted.\nIn Lastick, the incompetent owned a two-thirds interest in a land trust; her son owned the other one-third interest. By the terms of the land trust, the two-thirds beneficial interest of the incompetent would pass to her son on the incompetent\u2019s death if no other disposition had been made of the interest. No other disposition of the beneficial interest was made during the incompetent\u2019s life. After her death, her daughter, who was the sole devisee under her will, petitioned the court to cause the two-thirds beneficial interest owned by the incompetent in her lifetime to be sold to defray a pro rata share of the incompetent\u2019s expenses, which apparently remained unpaid. The liquid assets in the incompetent\u2019s estate had a value of $56,000; the land in the trust had a value of $50,000. The trial court denied the petition and directed that the probatable assets of the estate had to be first exhausted before charging the incompetent\u2019s interest in the land trust with such expenses. The appellate court agreed and found that, under the circumstances, the survivorship interest of the son in the land trust should prevail over the other assets of the incompetent.\nLastick is distinguishable from the instant case for several reasons. Most important, unlike the case at bar, Lastick does not deal with expenditures made by the conservator in good faith for the support and maintenance of the incompetent, which expenditures the trial court had reviewed and approved. Also, Lastick, concerned a request to expend a portion of the principal of the trust, rather than the expenditure of income therefrom.\nWe have examined the other cases cited by the appellant and find them to be distinguishable from the case at bar. Appellant cites no cases that squarely deal with the issue of whether the interest on Totten trust accounts is entitled to the priority asserted so that the conservator bank\u2019s actions in expending these funds would be improper. Nor do the cases cited by appellant, taken singly or together, adequately support the asserted priority. Independent research has also failed to reveal any cases directly on point.\nHowever, Illinois statutes and cases do establish the proper function and duties of the conservator under the law, and we find that the conservator bank acted properly in this case.\nAt the time the bank was appointed as conservator, the Illinois Probate Act set forth the duties of the conservator. (Ill. Rev. Stat. 1977, ch. 110/2, par. 11\u201413.) The statute subjects the conservator to the direction of the court and vests him with responsibility for the care and management of the estate and requires the conservator to \u201cmanage the estate frugally and * * \u00b0 apply the income and principal of the estate so far as necessary for the comfort and suitable support \u2018 8 \u201cof the ward * * Ill. Rev. Stat. 1977, ch. 1101/2, par. 11\u201413(b).\nThis court has described the relationship between the incompetent, the conservator and the court as follows:\n\u201cAn incompetent person or a person alleged to be incompetent is a ward of the court and entitled to the special protection of the court whenever the rights of such incompetent may be affected. The paramount duty of the conservator is, as the name implies, to conserve and protect the assets of an incompetent person and to see that such assets and the income therefrom are properly applied to the use, enjoyment and benefit of such incompetent. The duties and responsibilities of a conservator are those as set forth in the statute and the supervisory function of the court assures compliance therewith.\u201d (Proehl v. Leadley (1967), 86 Ill. App. 2d 472, 477-78.)\nUnder the direction of the court, the conservator performs his statutory obligation to preserve the estate of the incompetent and manage the assets so as to provide for the incompetent\u2019s care and support.\nAfter adjudication of incompetency, Mr. Peterson was no longer competent to tend to his own affairs. (In re Estate of Hirsh (1960), 27 Ill. App. 2d 228, 235-36.) Pursuant to court authority, the conservator bank then took over management of the incompetent\u2019s assets.\nThe Illinois Supreme Court has described the proper management of a conservatorship estate as follows:\n\u201cThe governing principle in the management of property belonging to a person of unsound mind is the furtherance of his interest. * * * The court considers only the situation of the ward and does nothing wantonly or unnecessarily to alter the ward\u2019s property, but on the contrary takes care, for his sake, that if he recovers he shall find his estate as nearly as possible in the same condition as he left it. [Citations.]\u201d (Lewis v. Hill (1944), 387 Ill. 542, 546.)\nThe conservator in the instant case expended the current interest and income of the estate for the current expenses for care and maintenance of the settlor-incompetent and used estate principal to meet these expenses only insofar as estate income was insufficient. Had the incompetent recovered, he would have found his estate in as nearly the same configuration as before his incompetency.\nAdditionally, the acts of the conservator bank appear to comport with Peterson\u2019s intentions regarding his assets prior to his incompetency. That the settlor chose to make the trusts in question revocable indicates his intention that these funds be available to him during his lifetime if needed. A court\u2019s objective in construing a trust is to ascertain and give effect to the intent of the settlor. Ford v. Newman (1979), 77 Ill. 2d 335, 338.\nIn the last analysis, we must consider that it is the court which has control over the person and the estate of the ward. (Ill. Rev. Stat. 1977, ch. 1101/2, par. 11\u201413.) The conservator is under the general guidance and supervision of the probate court, and that court should hold him strictly accountable in the execution of his duties. (Burton v. Estate of McGeever (1916), 202 Ill. App. 606, 610.) Here, the trial court considered and approved the actions of the conservator and found them to be in the best interest of the incompetent and his estate. In so doing the court determined that, under the circumstances, the bank had properly expended the interest income from these Totten trusts along with other interest income from other assets of the settlor-incompetent for his support and maintenance. We conclude that, under the circumstances of this case, the survivorship interest which the appellant had in the interest income from the Totten trusts was not such as to prevent its expenditure by the conservator for the maintenance and support of the incompetent subject to the approval of the court.\nConsidering the relevant statutes under the Probate Act, the principles of trust construction, and the judicial interpretation of the obligations of a conservator in the management of an incompetent\u2019s estate discussed above, we conclude that the conservator bank acted properly and that the trial court correctly refused to grant appellant the interest accrued on the Totten trust accounts during the period of Mr. Peterson\u2019s incompetency. The accrued interest was not entitled to a priority vis a vis the other items of interest and income in this estate. Therefore, the bank properly expended these funds along with the other interest/income assets for the settlor-incompetent\u2019s necessary support and maintenance.\nFor the reasons set forth above, the order of the circuit court of Winnebago County, Probate Division, dated January 22,1981, subject of this appeal, is hereby affirmed.\nAffirmed.\nHOPF and LINDBERG, JJ., concur.", "type": "majority", "author": "JUSTICE VAN DEUSEN" } ], "attorneys": [ "Peter B. Nolte, of Rockford, for appellant.", "Frank P. Maggio, of Rockford (Pamela Fox, of counsel), for appellee." ], "corrections": "", "head_matter": "In re ESTATE OF FRANK RUDOLPH PETERSON.\u2014(CAROL WILSON, Appellant, v. ILLINOIS NATIONAL BANK AND TRUST COMPANY, Conservator of the Estate of Frank Rudolph Peterson, Appellee.)\nSecond District\nNo. 81-80\nOpinion filed February 4,1982.\nPeter B. Nolte, of Rockford, for appellant.\nFrank P. Maggio, of Rockford (Pamela Fox, of counsel), for appellee." }, "file_name": "0481-01", "first_page_order": 503, "last_page_order": 509 }