Civil Law and Practice Section MCLE Meeting

DuPage Judicial Center - ARC

October 2, 2019

11:45 AM – 12:00 PM Welcome/Introductions

Azam Nizamuddin, Civil Law Section Chair

12:00 PM – 1:00 PM Program – Zombie Apocalypse: A Civil Lawyer's Guide to Probate

Matthew Caruso and Jim Ryan, Roberts & Caruso

Speakers’ Bios

Matthew T. Caruso is a partner at the law firm of Roberts & Caruso

and practices out of the firm's Wheaton office. Matt concentrates his

practice on business litigation, contested probate, construction law,

guardianships and estate planning. Matt has been appointed as

guardian ad litem in numerous guardianship cases. He has acted as

lead counsel in over 25 jury trials and numerous bench trials.

James L. Ryan is an associate at the law firm of Roberts & Caruso.

Jim concentrates his practice on business litigation, contested

probate, and estate planning. Jim is on the Board of Directors of the

DuPage County Bar Association and has served as past editor in

chief of the DCBA Brief Jim is a member of the DuPage Estate

Planning Council and a member of the federal trial bar for the

Northern District of Illinois.

Presentation Summary

This presentation serves as a guide for the civil lawyer to navigate

through the probate process. Matt and Jim will explain procedural

differences between the probate division and the law division, as

well as substantive differences between statutes of limitations and

the payment of attorneys' fees in probate court and in the law

division. They will also explain how those differences impact

litigation and settlement strategies and offer practice tips unique to

the probate court to effectively litigate and settle cases.

Next Meeting: TBD

DCBA Events: October 11th – Mentoring Program Orientation – ARC

October 17th – DCBA Unwind – Sogno Ristorante, Wheaton

October 26th – Member Appreciation Family Day – Morton

Arboretum

November 15th & 16th – GAL Training – 421 Building - Auditorium

Earn CLE Online!

DCBA OnDemand CLE is Now Powered by IICLE The Illinois Institute for Continuing Legal

Education (IICLE®) and the DuPage County Bar Association (DCBA) are excited to offer a new

IICLE®Share collaboration to provide DCBA members a high quality and reliable online

learning experience. Members can find the link to The Illinois Institute for Continuing Legal

Education (IICLE) on the DCBA website under “Legal Community”→OnDemand CLE →Online

CLE Catalog

View & Print All CLE Certificates through the DCBA Website:

Manage Profile -> Professional Development (under content & features) and choose the icon to

the left of each meeting to print your certificate directly or choose to have them emailed to you

to save to your computer (you MUST be logged in to view this feature)

$200 for DCBA Members $400 Non-MembersRegister online at: www.dcba.orgSend payments to: DuPage County Bar Association 126 S. County Farm Road, Wheaton, IL 60187

Session One: Friday November 15, 2019 from Noon - 5:30pm (Registration 11:30am) - GAL Appointment 101

- Substance Abuse/Mental Health Issues and Restrictions on Parenting Time

- Domestic Violence and Family Center Services

- DCFS/Children’s Advocacy Center/VSIs

- Special Needs Children

- 604 Evaluations

- Working with High Conflict Parents

Session Two: Saturday, November 16, 2019 from 8:00am-1:00pm (Registration 7:30am)- Children’s Panel

- Ethics-related Matters

- Gender Identity Issues

- Drafting Allocation Judgments/Facilitating Settlement

- Probate Matters

- Relocation

Program Location: DuPage County Administration Building Auditorium 421 N. County Farm Road in Wheaton, IL

By attending both sessions, you can earn up to 10 hours of CLE credit (PRMCLE awarded

based on final agenda). Attendance at both sessions is required to be placed or remain on

the approved GAL list used in 18th Circuit Domestic Relations Division.

The DuPage County Bar Association and the 18th Judicial Circuit Domestic Relations Division

Guardian Ad Litem Training Program

9/30/2019

1

Zombie Apocalypse:

A Civil Lawyer’s

Survival Guide to Probate

Step 1: Find Your Way

• The Dead Go to Room 2011.• Petitions to Admit a Will to Probate.• Petitions for Letters of Administration.• Petitions to Contest Will.

• The Undead go to Room 2009.• Petitions for Guardianship of a Disabled Adult.• Petitions for Guardianship of a Minor.• Petitions to Settle a Minor’s Cause of Action.

1

2

9/30/2019

2

Step 2: Learn the Zombie’s Language

Law Division Law Division Law Division Law Division • Replevin• Garnishment• Discovery• Collection Lawsuit• Opposing Party• Declaratory Judgment• Receiver• Friend of the Court • Release and Satisfaction

Probate DivisionProbate DivisionProbate DivisionProbate Division• Citation to Recover Assets• Citation to Recover Assets• Citation to Discover Assets• Claim• The Rest of the Family• Petition for Instructions• Special Administrator• Guardian ad Litem• Receipt on Distribution

Trusts vs. Wills

• TRUSTS AND WILLS HAVE A LOT IN COMMON• A Trust is like a will insofar a trust can determine where a person’s money goes after death.

• A Trust and a will are two examples of “estate planning documents”• A Trust and a will must be signed to be effective (in nearly all cases)• A Trust and a will are usually prepared by a lawyer.• A person signing a trust or a will needs to have testamentary capacity.• A person revoking a trust or a will must have testamentary capacity. • You can revoke a will or trust by destroying it, tearing it up, writing “revoked” on it, or writing a new document that declares the revocation of the will or trust.

3

4

9/30/2019

3

Trusts vs. Wills, continued.

• THINGS THAT DISTINGUISH A TRUST FROM A WILL• Wills must be filed with the Clerk of Court when the testator dies. Trusts do not have to be made public, and is often kept “secret.”

• A will requires two witnesses and a notary for proper execution. A Trust, which can contain billions of dollars, requires only the signature of the person making the trust.

• A trust is administered by a trustee. A will is administered by an executor.• A will is administered through the probate court if there is over $100,000 in the probate estate. A trust is not administered in court, but the trustee must give an accounting to all income beneficiaries.

Step 3: Don’t Miss a “Dead” Line Or You May Commit a Crime

• ““““ImmediatelyImmediatelyImmediatelyImmediately upon the death of the testator any person who has the upon the death of the testator any person who has the upon the death of the testator any person who has the upon the death of the testator any person who has the testator’s will in his possession shall file it with the clerk of the testator’s will in his possession shall file it with the clerk of the testator’s will in his possession shall file it with the clerk of the testator’s will in his possession shall file it with the clerk of the court….” 755 court….” 755 court….” 755 court….” 755 ILCSILCSILCSILCS 5/65/65/65/6----1(a).1(a).1(a).1(a).

• ““““If any person wilfully alters or destroys a will without the direction of the testator or wilfully secretes it for the period of 30 days after the death of the testator is known to him, the person so offending, on conviction thereof, shall be sentenced as in cases of theft of property classified as a Class 3 felony by the law in effect at the date of the offense.” 755 ILCS 5/6-1(b).

5

6

9/30/2019

4

More Zombie “Dead” Lines ….

• “§ 6-3. Duty of executor to present will for probate. (a) Within 30 days after a person acquires knowledge that he is named as executor of the will of a deceased person, he shall either institute a proceeding to have the will admitted to probate in the court of the proper county or declare his refusal to act as executor. If he fails to do so, except for good cause shown, the court on its motion or on the petition of any interested person may deny him the right to act as executor and letters of office may be issued by the court as if the person so named were disqualified to act as executor.”

755 Ill. Comp. Stat. Ann. 5/6-3

More “Dead” Lines, continued…..

• Within 14 days of admitting a will to probate, you must send notice to all heirs (a/k/a family members) and legatees (a/k/a anyone who takes under a will) that the will has been admitted to probate. 755 ILCS 5/6-10(a).

• BEWARE COOK COUNTY: If part or all of an estate is to be distributed to a trust and if each trustee is also a representative of the estate, each income beneficiary of the trust must be given notice. Cook County Rule 12.13(c)(i)-(iii).

7

8

9/30/2019

5

What are the “Dead” Lines for the Living?

• 42 Days after admission of the will to probate to file a petition for formal proof of will.

• 6 Months after admission of the will to probate to file a petition to contest the will.

• If the Executor fails to send the 14-Day Notice to Heirs and Legatees, then clock doesn’t start. Will must be readmitted to Probate and the required notice is given to start the clock for the non-executors to challenge the will.

WARNING: Death Changes Your Statute of Limitations

• EXAMPLE: • September 1, 2016: David breaches written guaranty by failing to pay Acme for services provided to David’s business.

• Statute of Limitations is 10 years. Runs on September 1, 2026.

• February 1, 2018: David is rear-ended by a truck. Plenty of insurance coverage available to pay.

• February 14, 2018: David dies a with will leaving entire estate to his Wife.

• Does Acme still have until September 1, 2026, to sue David’s estate?

9

10

9/30/2019

6

Changing Statutes of Limitations…

• Claims against an estate are “barred 2 years after decedent's death, whether or not letters of office are issued upon the estate of the decedent.”

• OUR EXAMPLE: David’s February 14, 2018, death shortened the limitations period from September 1, 2026 to February 14, 2020.

Changing Statutes of Limitations, continued.

• If a representative publishes a claims notice in a newspaper of record for three consecutive weeks, then the statute of limitations shortens to 6 months from the date of first publication. 755 ILCS 5/18-3.

• OUR EXAMPLE: • March 14, 2018: Wife obtains letters of office as executor. • April 1, 8, 15, 2018: Claims notice published with Daily Herald.• October 1, 2018: Claims are barred.

11

12

9/30/2019

7

Publication Can be Tricky ….

• The publication notice usually doesn’t get filed with the Court right away. Some probate lawyers wait until the closing date before filing the publication notice. Checking the court file is not enough to track the publication date.

• Claimant’s Lack of Knowledge of the Death Does Not Matter. McCue v. Colantoni, 36 Ill.Dec. 263 (1st Dist. 1980).

• The publication notice bars only “unknown” claims. “Known” claims are still covered by the 2 year limitation.

• OUR EXAMPLE: Unless Paul Can Show that Wife knew about the business Unless Paul Can Show that Wife knew about the business Unless Paul Can Show that Wife knew about the business Unless Paul Can Show that Wife knew about the business guaranty, Paul is out of luck.guaranty, Paul is out of luck.guaranty, Paul is out of luck.guaranty, Paul is out of luck.

Step 4: Don’t Fight the Zombies as If They Were Alive

• Strategy typically used in other courtrooms can be counterproductive in Probate cases.

• Scorched Earth: Everyone’s a liar. Your client is in contempt. This is outrageous! I’m reporting you to the ARDC.

• Assume Everyone Settles: I will do just enough to make you come to the table to avoid further legal expenses

• Criminal Defense Style: We’re not telling you anything!

13

14

9/30/2019

8

The Incredible Shrinking Money Pie

• Think of probate as a system for dividing a deceased’s assets OR “Zombie’s Money Pie”.

• Before any beneficiary gets a slice of the Money Pie, all the professionals take out their slices first.

• RESULT: The beneficiaries ultimately pay all attorneys’ fees. A wise lawyer must pick their battles knowing that a client who is a beneficiary will be paying attorney’s fees for both sides.

Zombies Get Paid First

Attorneys’ Fees in Law Division CasesAttorneys’ Fees in Law Division CasesAttorneys’ Fees in Law Division CasesAttorneys’ Fees in Law Division Cases

• American Rule.

• Each side pays their own fees, unless there is a contract or a statute authorizing payment.

• You generally must win first before you can get the other side to pay your attorneys’ fees.

Attorneys’ Fees in Probate Cases.Attorneys’ Fees in Probate Cases.Attorneys’ Fees in Probate Cases.Attorneys’ Fees in Probate Cases.

• Attorneys’ Fees of the executor are considered administrative expenses.

• Executor’s Attorneys Fees Paid Using the Estate Funds.

• Executor’s Don’t Have to Win in order to have attorney’s fees paid.

• Beneficiaries who benefit the estate can get fees paid by estate.

15

16

9/30/2019

9

Death Creates Fiduciary Duties

• FIDUCIARY DUTIES: Someone in your case has a fiduciary duty. Executors, Administrators, Guardians, and Trustees all owe fiduciary duties as a matter of law.

• Duty of care.• Duty of full disclosure.• Duty to account for all monies.

• Fiduciaries cannot treat their “opponent” as the adversary. Fiduciaries must work to benefit the “opponent” even during litigation.

STEP 5: Know When Zombie Powers Don’t Apply

• Probate Court’s jurisdiction is limited to only probate assets.

• The following types of assets are not probate assets:• Life insurance proceeds paid to living people.• Retirement accounts with a designated beneficiary.• Real Estate held in Joint Tenancy.• Joint Bank Accounts.• Transfer on Death Accounts.• Trust Assets.

17

18

9/30/2019

10

The Disappearing Inheritance:“Tortious Interference”

• You can be named as the beneficiary of a will or trust, but what if all the assets are moved or put into joint tenancy or transfer on death before the person dies?

• What is the statute of limitations for that?

An Especially Scary Statute of Limitations Nightmare: Tortious Interference with an

Inheritance Expectancy

• Robinson v. First State Bank of Monticello, 97 Ill.2d 174 (1983)

• In re Estate of Jeziorski, 162 Ill. App. 3d 1057 (1st Dist. 1987)

• In re Estate of Ellis, 381 Ill. App. 3d 427 (1st Dist. 2008)

• 735 ILCS 5/13-214.3 (eff. Jan. 1, 2015)

• In re Estate of Ellis, 236 Ill.2d 45 (2009)• Bjork v. O’Meara, 2013 IL 114044

19

20

9/30/2019

11

STEP 6: Evade Zombie Landmines“In Terrorem Clauses”

• Special care is necessary when confronting an estate plan with an “in terrorem clause”.

• In terrorem clauses are often described as “No-Contest Clauses”.

• Designed to deter litigation; however, in our experience they are misunderstood as being a bar to litigation to address bad behavior by fiduciaries.

What is an In Terrorem Clause?

• “A provision designed to threaten one into action or inaction; esp., a testamentary provision that threatens to dispossess any beneficiary who challenges the terms of the will.” Black’s Law Dictionary.

21

22

9/30/2019

12

Are In Terrorem Clauses Enforceable in Court?

• Case law is mixed, but mostly negative.

• PRO ENFORCEMENT:• “In terrorem clauses are enforceable as a valid exercise of a testator's power to control the disposition of her assets upon her death.” In re Estate of Wojtalewicz, 93 Ill. App. 3d 1061, 1063 (1981).

• AGAINST ENFORCEMENT: • However, in terrorem clauses are “disfavored and are strictly construed to avoid forfeiture.” Estate of Mank, 298 Ill. App. 3d 821 (1st Dist. 1998).

Probate Courts Use a Two Step Process

STEP 1:STEP 1:STEP 1:STEP 1:

IS THE CLAUSE TRIGGERED?IS THE CLAUSE TRIGGERED?IS THE CLAUSE TRIGGERED?IS THE CLAUSE TRIGGERED?

• Is the language of the clause narrow and clear?

• Was there an action or inaction that triggered the clause?

• Must make these determinations based on a “totality of the circumstances” each time the clause is allegedly triggered.

STEP 2:STEP 2:STEP 2:STEP 2:

IS THE CLAUSE IS THE CLAUSE IS THE CLAUSE IS THE CLAUSE ENFORCABLEENFORCABLEENFORCABLEENFORCABLE????

• Does the clause violate public policy?

• Some public policies are defined by the legislature, some by the courts.

23

24

9/30/2019

13

Public Policy Exceptions…

• It is against public policy to enforce an in terrorem clause against a disabled person. In re Estate of Mank, 298 Ill.App.3d 821 (1st Dist. 1989).

• It is against public policy to enforce an in terrorem clause against a legatee for expressing a feeling of hostility or a negative opinion of an executor. Estate of Wojtalewicz, 93 Ill.App.3d 1061, 1063-64 (1st Dist. 1981).

• It is against public policy to enforce an in terrorem clause against a beneficiary for bringing a lawsuit against a fiduciary to enforce his rights as beneficiary such as a right to an accounting. Schroeder v. Sullivan, 2018 IL App (1st) 163210.

In Terrorem Clauses Prevent Parties from Taking a Slice out of the Money Pie.

• FACTS: Will names 15 legatees and contains an in terrorem clause. 4 of them file suit challenging a codicil changing the percentages assigned to each person. 1 of the 4 plaintiffs was 89 years old and lived in a nursing home.

• Result: Court allowed the 89 year old to keep her share in a special needs subtrust, but applied the in terrorem clause to the other 3 plaintiffs.

25

26

9/30/2019

14

QUESTIONS?

Matthew Caruso

James Ryan

ROBERTS & CARUSO

411 W. Wesley

Wheaton, Illinois 60187

(630) 510-1800

mattcaruso@robertsandcaruso.com

jimryan@robertsandcaruso.com

27