First Nat. Bank of Chicago v. King

Citations: 635 N.E.2d 755; 263 Ill. App. 3d 813; 200 Ill. Dec. 416Docket: 1-93-0060

Court: Appellate Court of Illinois; May 13, 1994; Illinois; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

An appeal was made regarding a Cook County circuit court's order concerning the will of Louis F. Swift, Sr., executed on December 11, 1936, which established a trust for his daughter-in-law Lydia Niblack Swift. The case involves conflicting claims from various descendants of the testator's deceased son and his surviving wife, specifically the entitlement of Martha Herriott Swift, an adopted daughter, to share in the trust. The trial court ruled that Martha did not qualify as a "lawful descendant" under the terms of the will. Martha contends that a 1989 statute, which presumes that adopted children have the same rights as natural-born children unless explicitly stated otherwise in the will, should apply. The will allocated the bulk of the estate into three equal funds, with one fund designated for Lydia, who was to receive income for life and potentially the principal if the trust terminated during her lifetime. The case involves multiple family members, including the deceased's children and grandchildren, and the court's interpretation of "lawful descendants" as it pertains to the distribution of the trust's assets.

The will establishes the "Lydia Niblack Swift Fund," directing trustees to pay net income in quarterly installments to Lydia Niblack Swift during her lifetime, provided she survives. If she dies before the fund terminates or does not survive the testator, the income will be distributed to the lawful descendants of the deceased son, Alden B. Swift, and Lydia, in equal shares per stirpes. Upon the fund's termination, if Lydia is alive, the corpus will be given to her; if deceased, it will go to her lawful descendants or, if none, to the descendants of the testator's daughter, Idamay, and son, Louis, Jr. If there are no descendants from these lines at termination, the trust estate will be distributed to the heirs of the testator's siblings. The termination of all funds occurs upon the death of the last surviving lawful descendant alive at the testator's death. The appeal concerns claims to Lydia's trust share, with Martha asserting her entitlement as an adopted child of Nathan, Sr., while Nathan claims the entire share as his natural-born child. Lydia received all income from her fund from 1937 until her death in 1968, leading to her surviving children, Lydia Swift Rowan and Narcissa, each receiving one-third of the income thereafter. Narcissa continues to receive her share, while Lydia Swift Rowan's share goes to her child, Robin. Nathan received income that would have been Lydia's share, as he was the only natural-born child of Nathan, Sr., and no payments were made to Martha, who was adopted at age 14.

Martha, adopted and raised by her maternal grandparents, the Herriotts, filed her first claim to the LNS fund in 1990, citing an amendment to Illinois law that allowed adopted children to inherit under testamentary instruments. The 1989 amendment established a presumption favoring adopted children receiving gifts from wills executed before September 1, 1955, unless a contrary intention was shown clearly. Martha argued that the trial court incorrectly interpreted the testator's use of "lawful descendants" as clear evidence of intent to exclude adopted children, asserting that this interpretation contradicted the presumption provided by the amendment. The trial court concluded that "lawful descendants" referred solely to individuals in the testator's bloodline, excluding adopted individuals. The legal issue is subject to de novo review, meaning the appellate court will independently interpret the amendment's application, without deference to the trial court's findings. The amendment did not alter the core principle that courts aim to ascertain the testator's intent when interpreting wills. Historically, before the amendment, Illinois law presumed adopted children did not have rights under testamentary instruments executed prior to 1955, as established by the "stranger-to-the-adoption rule" from the 1925 case Smith v. Thomas, which required explicit language in a will to include adopted children. This rule was modified in 1955 to deem adopted children as natural children for rights under instruments executed after that date, unless the will explicitly stated otherwise.

In 1955, legislation shifted the presumption regarding adopted individuals from a presumption of exclusion under the stranger-to-the-adoption rule to one favoring their inclusion in inheritances. However, this amendment applied only to instruments executed after September 1, 1955, leaving adopteds subject to the prior presumption for pre-1955 instruments. By 1989, the Illinois legislature acknowledged the confusion arising from this inconsistency. Senator Berman noted that previous court cases challenged the long-held understanding that adopted children could only inherit if explicitly stated in the will or trust. The 1989 amendment clarified the law by allowing adopted children to inherit under older documents in certain circumstances, abolishing the stranger-to-the-adoption rule, and establishing a consistent presumption that adopted children are treated as natural children, unless proven otherwise by clear and convincing evidence. This standard of evidence requires a higher degree of certainty than a mere preponderance but is less than that required for criminal conviction. The amendment has been interpreted in a limited number of cases, including one where the term "lawful descendants" in a 1926 trust was scrutinized to determine the settlor's intent regarding the inclusion of adopteds.

In a 2-1 ruling, the Herguth court determined that the term "descendant," as used in a trust created in 1926, did not encompass adopted children. The majority opinion asserted that the settlor was presumed to be aware of the legal definitions at that time and intended to limit beneficiaries to his biological offspring. This interpretation was reinforced by the settlor's use of the term "per stirpes" for trust distribution. Justice Inglis dissented, arguing that a 1989 statute altered the interpretation framework for such language, positing that the settlor's intent regarding adopted heirs was not sufficiently addressed by the majority. He contended that the terms "descendants" and "per stirpes" did not provide clear evidence of intent to exclude adopted children and criticized the majority for failing to apply the 1989 statute appropriately. The dissent emphasized that the new legislative presumption—which regards adopted children as equal to biological children—should not be dismissed by older judicial interpretations. The ruling highlighted the ongoing confusion surrounding terms like "descendants" and suggested that the Herguth majority's interpretation negated the purpose of the legislative amendment. The case referenced Purifoy v. Mercantile-Safe Deposit and Trust Co., which similarly questioned whether "descendants," "child," or "children" included adopted individuals in testamentary contexts.

The court in Purifoy, 398 F.Supp. at 1079, emphasized the distinction between the actual intent of the testator and the meanings assigned by rules of construction. It rejected the defendants' argument that the terms "child" and "children" reflected a clear intent to exclude adopted individuals, noting that such an assumption would require unwarranted speculation about the testator’s consideration of adoption. The ruling clarified that prior rules of construction cannot retroactively define the testator's intent, especially when no evidence indicates that adoption was contemplated. The court stated that competing rules of construction—one judicial and the other statutory—should not elevate the old presumption regarding the exclusion of adopted children to actual intent. The new statutory framework requires clear and convincing evidence of the testator’s intent to exclude adoptees, which is not satisfied by the mere use of the term "descendants." The court concluded that there is no evidence indicating that the testator considered the possibility of adopted children inheriting, thus reinforcing the statutory requirement for proof of intent to exclude them.

Presuming that the testator intended "lawful descendants" to include adopted children elevates an outdated judicial presumption to an actual intention, circumventing the current statutory presumption that adopted children are treated as natural children. It is unlikely the testator would have omitted specific language regarding adopted children if he had intended for them to inherit. The Illinois Supreme Court's decision in *Continental Illinois National Bank v. Clancy* illustrates the difficulty in discerning a settlor's intent when the term "lawful issue" was used, leading the court to rely on established rules of construction that excluded adopted individuals due to the absence of explicit mention. The court's reasoning acknowledged that prior to 1989, no statutory framework existed to support the inclusion of adopted children. The 1989 amendment shifted the presumption to treat adopted children equally to biological children, a presumption Nathan was unable to rebut convincingly. Nathan contends that this approach undermines the established meaning of terms like "lawful descendants" as understood in 1936, but the court notes that the interpretation of these terms regarding adopted children was not well defined at that time. Recent case law, such as *Chicago Title Trust Company v. Vance*, has indicated that adopted children can be classified as "lawful issue" under earlier legal frameworks, further complicating the argument against their inheritance rights.

In Munie, the court analyzed whether an adopted child qualified as a "child" under a testator's will, emphasizing that the absence of exclusionary language (such as "heirs of his body" or "children of the blood of his children") indicated the testator's intention to include the adopted child in estate distribution. The Vance court cited Munie as a guide for excluding adopted children in wills, concluding that the absence of specific exclusionary terms meant that adopted children should be recognized as the "lawful issue" of the testator's daughter.

In MacLean, the court addressed whether adopted children could inherit under a clause referring to "lawful issue" and whether they could serve as trustees as "descendants." The court rejected the argument that these terms inherently excluded adopted children, asserting that the 1914 meanings of these terms did not suggest such exclusion. The ambiguity of the terms led to a conclusion that the testator's intent could not be determined without extrinsic evidence. Upon remand, the trial court applied a 1989 amendment and ruled that there was no clear intent to exclude adopted children, thus affirming their status as the testator's "lawful issue." The distinction between pre-1955 and post-1955 instruments is highlighted, noting that after 1955, terms like "descendant" are insufficient to exclude adopted children, contradicting any argument that they could serve as definitive evidence of intent in pre-1955 wills.

Nathan contends that the 1955 legislation altered the definition of "lawful descendants," aiming to exclude adopted individuals. The court disagrees, stating that the legislation did not clarify the term "descendants," nor is there evidence of a legislative intent to redefine it. The language of the will suggests the testator did not prioritize blood relations, as evidenced by the establishment of the LNS fund for his daughter-in-law Lydia, a non-blood relative, who could have potentially excluded blood relatives from inheritance. Additionally, the will provided benefits to other non-blood relations and allowed distributions to "heirs," a term not limited to blood descendants. This indicates the testator would likely have included an adopted grandchild in his estate. Nathan's argument that the term "per stirpes" implies an intent to exclude adopted children is countered by the Adoption Act, which only restricts adopted individuals from inheriting intestate shares from their biological families, not from provisions in a will. Since Martha is not claiming an intestate share, Nathan's argument is unsubstantiated. Furthermore, interpreting the Adoption Act differently would imply that the will's "per stirpes" language excludes Martha even if it explicitly included adopted individuals as "lawful descendants."

Nathan contends that the 1989 amendment, as interpreted by Martha, breaches the Illinois constitution's separation of powers clause and infringes on his due process rights. He argues that Martha's interpretation undermines the judiciary's exclusive authority to interpret testamentary instruments by creating an irrebuttable presumption regarding the testator's intent. Nathan claims that if Martha's interpretation invalidates prior judicial constructions, it precludes any evidence disproving her assertion that the testator intended to exclude adopted children.

The document asserts that every statute is presumed constitutional, placing the burden of proof on the challenger. It notes that a legislative presumption is valid if there is a rational connection between the proven fact and the presumed fact, which in this case is that the testator intended to include adopted children, based on Nathan's failure to provide clear evidence of intent to exclude them. The presumption of inclusion aligns with common human experience and has been accepted in other jurisdictions.

Nathan argues that the terms "lawful descendants" and "per stirpes" indicate the testator's intent to exclude adopted children; however, the court finds these terms insufficient to demonstrate such intent. Furthermore, the presumption favoring adopted children is not irrebuttable, as the court states that clear expressions of intent to exclude adopted children would be respected. The court cites examples of language that would clearly indicate exclusion, noting that the will was silent on the matter of adopted children. Ultimately, the court dismisses Nathan's claims regarding separation of powers and due process violations as without merit.

Nathan contends that Martha's interpretation of the statute undermines his reasonable expectation of inheriting both his beneficial interest and his father's share. However, his argument is predicated on the incorrect assumption that the statute itself diminishes his property rights, rather than the will's language. The court finds that Nathan's failure to demonstrate the testator's intent to exclude adopted individuals makes the statute relevant. The statute functions as a rule of evidence, establishing a rebuttable presumption that an adopted child is considered a biological child of the adopting parent. This presumption can be countered with clear and convincing evidence of contrary intent from the will's terms, placing the burden of proof on those opposing the inclusion of an adopted child. The court asserts that this evidentiary presumption does not infringe upon due process rights and that there is no constitutional barrier to retroactively altering rebuttable presumptions if it allows parties a fair chance to defend their positions. Nathan has not provided sufficient evidence to rebut the presumption that Martha is a lawful descendant of the testator. The court concludes that the statute is constitutional, reverses the lower court's judgment, and remands for further proceedings consistent with this ruling. Judges Egan and Rakowski concur with the decision.