Estate of Mendelson v. Mendelson (IL)

Summary: A deed into trust does not need to be recorded to vest title in the trust. A statement in an unrecorded trust agreement that the settlor/trustee was holding property as part of the trust was sufficient to bring the property into the trust.

Estate of Mendelson v. Mendelson, 2015 IL App (2d) 150084.

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Facts:  In 2005, Diane Mendelson executed a deed to her home, placing it in joint tenancy with herself and one of her four sons, Michael Mendelson, as joint tenants (the 2005 deed). Neither Diane nor Michael recorded the deed during the decedent's lifetime. In 2006, Diane executed a living trust that provided that after her death, her estate was to be divided equally among her four sons.

In 2011, Diane refinanced the mortgage on her home, listing herself as the sole owner of the property. That same year she executed a 2011 trust that revoked her 2006 trust. The 2011 trust identified her home as part of the trust estate and specifically stated that Diane intended that Michael gain exclusive possession of the home when she died.

After Diane's death, her estate filed a petition to determine the proper distribution of her home. The petition requested that her home be legally titled in the name of the 2006 trust, or, in the alternative, if the trial court declared the 2006 trust revoked, that the property be subject to probate under intestacy. Michael filed a custodial care claim against the estate pursuant to section 18.1–1 of the Probate Act of 1975 (755 ILCS 5/18.1–1 (West 2012), and a counterpetition claiming that he was entitled to the home.

The trial court determined that Diane's estate should be divided evenly among the four sons in probate under intestacy. The trial court explained that the 2005 deed did not validly transfer the property into joint tenancy, because Diane did not intend to convey any present interest to Michael when she signed it. The trial court found that the 2006 trust was valid. The trial court also found that the 2011 trust was valid and that it effectively revoked the 2006 trust. However, because no deed was executed or recorded to transfer the home into the 2011 trust, the 2011 trust did not include the home. As the 2011 trust revoked the 2006 trust, and the 2006 deed was therefore funding a revoked trust, the trial court found that the home reverted to the decedent's probate estate

Michael appealed.


Holding: Affirmed in part; Reversed in Part. On appeal, Michael first argued that the trial court erred in determining that Diane did not validly transfer the home into joint tenancy with him in 2005.  Because the court could not say that the trial court's determination that Diane did not deliver the deed to Michael is against the manifest weight of the evidence, it upheld the trial court’s ruling. The court found that, although there was a presumption, based on the mother-son relationship between Diane and Michael, that there was a valid delivery of the deed, that presumption was cancelled out by the failure of Michael and Diane to record the deed prior to her death. Second, the court indicated that Diane made several representations to others that she was the sole owner of the property, indicating that she did not intend the 2005 deed to deliver any present interest in her home to Michael while she was alive. Moreover, the court noted that Michael did not exercise dominion over the property.

Michael’s second argument stated that the trial court erred in not finding that he was entitled to the home based on the decedent's 2011 trust. On this matter the court found for Michael. First, the court found that the 2011 trust complied with the provisions of the 2006 trust regarding revocation, and therefore the 2006 trust was effectively revoked. Second, the court reviewed the requirements of a valid express trust, focusing primarily on whether delivery of the trust property to the trustee was valid. The court found that all of these factors were satisfied, despite the trial court finding that delivery of the trust property had not occurred as the trustee had not separately and formally transferred the designated property into the trust. The court held that, contrary to the trial court’s holding, a settlor who declared a trust naming herself as trustee was not required to separately and formally transfer the designated property into the trust. Therefore, Diane's declaration, that her home was part of the 2011 trust (of which she was the trustee), actually made the home part of the trust. The trial court should therefore have found that the 2011 trust included the home and that Michael inherited a 100% interest upon her death.

Regarding Michael’s third argument, the court held that none of Michael’s actions in caring for the decedent warranted compensation under the Probate Act. The trial court specifically found that Michael was not credible, and thus his testimony was not a basis to disturb the trial court's ruling.


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By: ATG Underwriting Department | Posted on: Mon, 11/09/2015 - 2:18pm