Ultimate Beneficiaries Can Enforce Contractual Will Omitting Restrictions on Survivor’s Use of Property

In Ernest v. Chumley, 936 N.E.2d 602 (Ill. Ct. App. 2010), husband and wife executed mutual wills giving the entire estate to the survivor of them and on the death of the survivor, one-half to his children and one-half to hers. The wills were also declared to be irrevocable on the death of the first to die. After husband’s death, wife remarried, executed a new will giving her estate to her new husband if he survived and if not to her children and his children in equal shares, sold the home she and her late husband had held in joint tenancy with right of survivorship and ultimately placed the proceeds in three separate certificates of deposit held in joint tenancy with her husband. The late husband’s children sued asking for a constructive trust to be imposed on the property.

The trial court entered judgment for the wife and on appeal by the children, the intermediate Illinois appellate court held that because the will placed no restrictions on the surviving spouse’s use of the property received from the deceased spouse, the children have no interest in the spouse’s property until her death. However, the creation of the jointly held certificates of deposit breaches the contract by removing those assets from the wife’s estate by operation of law. The court remanded with directions that the trial court order wife to end her current husband’s interest in the certificates of deposit and to refrain from taking any action inconsistent with the children’s interest under the contractual will except expenditures made for her own support.

Special thanks to William P. LaPiana (Rita and Joseph Solomon Professor of Wills, Trusts,and Estates, New York Law School) for bringing this to my attention.