Thursday, January 10, 2013

The Illinois Appellate Court in In re Estate of Doman issued a ruling on October 11, 2012 that once more clarifies why it is important to have a Will and, depending on circumstances, potentially a revocable trust. (See our prior posts on Why Do I Need a Will? (Part 1 and Part 2) and Why Do I Need a Trust?)

Trial Court Proceedings:

In the Doman case, Sara and Mark Doman were in the home stretch of their divorce when Mark died on July 4, 2011. On June 10, the trial court had issued a written dissolution judgment and reserved ruling on the ancillary issues, with a status hearing set for July 11. Sara’s attorney called the court on July 5 to inform the trial court of Mark’s death and the trial court entered a docket entry that stated, “Cause set for 7/11/11 is vacated. Cause is dismissed.”

Probate Court Proceedings:

On September 28, 2011, Sara filed a petition in the probate court stating that their divorce proceedings were dismissed and that she was Mark’s surviving spouse and seeking appointment as administrator of Mark’s estate. Sara’s daughter, Aimee (who was a child of Sara’s from a prior marriage whom Mark had legally adopted), filed a counter argument on October 13, arguing that the trial court’s June dissolution judgment on grounds only was a final judgment.

The probate court found the July 5 order only dismissed the ancillary issues, not the dissolution itself, and therefore, Sara was not Mark’s heir, appointing Aimee and her sister Bethany (also adopted by Mark) as co-administrators of Mark’s estate. Sara appealed.

Appellate Court Proceedings:

The Appellate Court interpreted the trial court’s order as a dismissal of the divorce proceedings in their entirety. “To find otherwise would lead to the unjust result of depriving [Sara] of both her marital right to a division of property in divorce and her spousal right to property under the Probate Act.” In addition, the Appellate Court cited another case which held that “A dissolution judgment is not final for purposes of appeal until all ancillary issues have been resolved.” The Appellate Court held that Sara was entitled to “a surviving spouse’s share” of Mark’s estate.

The Result:

This leads me to wonder, would this have been the result that Mark would have hoped for? Maybe the divorce was amicable and Mark would have wanted Sara to inherit as his surviving spouse. But maybe (probably?) he would have wanted to disinherit the wife who was divorcing him to the maximum extent allowed by state law.

Under Illinois intestacy law (law governing disposition of Mark’s estate because he died without a will), Mark’s surviving spouse is entitled to one-half of his estate, with the other half being divided among his descendants. If Mark had left a Will, Illinois law provides that a surviving spouse who is not adequately provided for in the Will is entitled to an “elective share” of only one-third of Mark’s estate. He is free to dispose of the remaining assets in any manner he chooses.

Based on this, Mark could have drafted a Will that left everything to Aimee and Bethany (or to other family members or friends if he didn’t wish to benefit his adopted daughters) and Sara would have been entitled to a smaller share than she received through these court proceedings. In addition, Wills can be drafted to define a surviving spouse so that, if either party to the marriage files a petition for dissolution of the marriage, the surviving spouse is treated as having pre deceased the deceased spouse. This language would preclude the necessity of waiting for a final order from the trial court in a dissolution proceeding. These methods would not preclude the survivor from filing for her elective share, but it could reduce the amount she would otherwise receive under the intestacy statutes.

If Mark had executed a Will prior to his death, Sara would likely have received a smaller portion of his estate, and the fight over Mark’s estate might have been avoided.

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