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Illinois Statue of Limitations on Trusts & Estates

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Mommer

Junior Member
An aunt of mine passed away 2-26-07 and left me an inheritance of 20% of a trust she had set up. On 2-11-08, I signed a disclaimer, thereby giving my inheritance to my 31 year old daughter.

The trustees of the trust in which I have a 20% interest are 2 cousins of mine (a pair of sisters) who have continually taken excessive fees for themselves, paid special gifts to members of their own family, used accounting tricks to favor themselves, etc.

I know this, because I used to be one of the trustees and was actually dismissed because I objected to such behavior. That is, my aunt was senile for many years before she died and had set up this trust many years ago to have 3 of her nieces (my 2 cousins & myself) handle it should she become incompetent. One of my cousins, however, had more recently manipulated this senile elderly lady into signing an amendment to the trust, written by this cousin's attorney, making her (the cousin) the head trustee with rights to dismiss any of the other trustes for any reason. This cousin also insisted that a member of her own family, who was also her own private attorney & the same one who wrote that amendment, be the attorney for the trust. Supposedly, this trust attorney was representing all 3 trustees. When I could not get my cousins to stop taking excessive fees & doing other questionable stuff, and when the trust attorney not only didn't back me up but actually wrote an inflammatory letter against me, and when my cousins refused to hire a more independent attorney, I hired a trust attorney myself to pressure them to reduce their fees & correct some other questionable things. This was when the amendment was used to dismiss me as a trustee. I could not afford to keep up the battle (Chicago trust attorneys are extremely expensive), so I didn't fight it. I really didn't want the liability any longer anyway, and I did want unfettered access to my aunt whose remaining time was very limited.

Anyway, my cousins are now trying to close my aunt's estate, and my share (now my daughter's shrae) would be a little over $300,000. However, in the estate accounting (prepared by that same non-independent attorney) there were several irregularities, so my daughter and I decided not to sign until these & some earlier irregularities were fixed. Needless to say, we're under a lot of pressure from my cousins, and my daughter has even had angry messages left on her answering machine.

Some of the stuff I would like them to fix (excess fees, special gift to a boyfriend, etc.) goes back to late 2002. I didn't find out about these things until the summer of 2003 as I had quite a battle in getting my cousins to disclose financial information. As trustee I brought these things up shortly after I found out about them, but was outnumbered 2 to 1 on the trustee vote as far as getting them fixed. I didn't get my beneficiary rights until my aunt passed away on 2-26-07, and my daughter didn't get her beneficiary rights until I signed the disclaimer on 2-11-08. So what is the statue of limitations on getting some of this old stuff fixed, and from what date does it start? My aunt lived in Cook County, Illinois, at the time of her death, so I believe that's the jurisdiction we're dealing with.

Thank you for your help.

Mommer
 
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Mommer

Junior Member
Can anyone help?

I just want to know what the Illinois Statue of Limitations is on some old disputes and from what date it starts. As my original post explains, this is stuff that has gone on since 2002 and there are various pertinent dates.

I'm actually no longer the beneficiary, having signed my share over to my daughter, but we're working together to get this resolved.

Mommer
 

Dandy Don

Senior Member
There may be no limitations on theft or misappropriation of funds, but you have no evidence of exactly what the illegalities are yet.

What exactly is being closed here--a probated estate (in probate court) or a trust (that is handled outside of court)? It is your daughter's decision about what to do now, since you have officially declined, but it's great that you are watching out protectively for her best interest.

If you had received extremely competent legal advice previously, YOU could have taken action to get the dishonest trustees removed, instead of them doing it to you, and you could have challenged the amendment if you had documented evidence in medical records of the aunt's senility/dementia, which would have rendered the amendment invalid, but it's too late to do that now.

The bottom line now is that none of the arguments you raise or the suspicions you have are going to be resolved by the trustees so the best thing for you to do is to advise your daughter to consult a probate and trust attorney to confirm whether it would be advisable for her to go ahead and accept her $300,000 check now (if she is asked to sign any type of release paperwork she should let her attorney review it before she signs) and then, after probate is over, she can file a lawsuit against the trustees for breach of fiduciary duty or whatever else they may be guilty of, to get the illegalities accounted for or corrected. A one-hour or two-hour consultation for advice is not going to be prohibitively expensive but will be well worth the price in advising of her rights and how to proceed.

She needs to find out what her rights were as a beneficiary (she may have been required to ASK the trustee by certified letter for an annual accounting statement)--some states allow this and others do not.

DANDY DON IN OKLAHOMA ([email protected])
 

Mommer

Junior Member
Thank you for your response, Don.

I have copies of the trust's cancelled checks, so I think that's pretty good evidence. I also have a 2 hour tape of one of our trustee meetings (everyone knew it was being recorded & all 3 of us have copies) that show the other 2 being totally unwilling to work together - everytime I brought up a point they didn't want to hear, they interrupted & shouted me down. There's also tons of e-mail. That is, there's such an overabundance of evidence that it'll take a lot of time for an attorney to sort through it.

One of the main disputes is excessive fees, which are somewhat a judgment call, but I think I'm on solid ground. One trustee has been paying herself $29,000/year, and then hiring accountants & lawyers (also paid by the trust) to do most of the actual work. She told me during the taped meeting that she'd reduced her fee to $15,000/year which I said was fine. Since she was the one overseeing our aunt's care (our aunt was in a nursing home & also had a private nurse), checking on a house in Mexico and doing some other things, I thought that much could be justified. But later I found out she then took a $14,400/year salary in addition to the $15,000 fee. Her claim that she'd reduced her fees is on the tape, and I now have copies of the cancelled checks to show that all she did was split the same roughly $29,000 fee into 2 parts. So, yes, I do have evidence.

What I don't have is medical evidence of the date of my aunt's senility, but I imagine that could be subpoenaed. Since this cousin was by far the closest to our aunt and had handled her financial affairs for many years, well before my aunt became senile, I really didn't want to remove her as trustee. I just wanted her to stop the excesses.

I'm not satisfied with the legal help I've gotten so far, but the trouble is price. Chicago trust attorneys seem to average close to $400/hour and some go higher than that. So the transcrepancies have to be really huge before it's economically feasible to take action. I've alread spent over $10,000 on a Chicago trust attorney without much result. Also, there's the emotional aspect of suing family.

The estate has not been probated in the U.S., but there may be probate proceedings in Mexico to get the house to its rightful owner. I think it's the trust that's being closed, though the attorney has included the rest of the estate in his accounting as well, mostly for informational purposes. The will & trust document require everything in the estate (except possibly the things in Mexico - this may be one of the disputed issues) be added to the trust on my aunt's death, estate & final expenses paid from the trust, and then the rest distributed to the beneficiaries from the trust. My daughter has said she'll do whatever I want in the matter. Also, I'm basically the keeper of these mounds of evidence which I don't think she really wants to sort through. I'm retired and she works full-time plus.

Right now, my daugher is just refusing to sign off on the final trust accounting until these issues are fixed. This stops them from making the final distribution, and hence no one gets their inheritance. My daughter and I are in no hurry, but apparently my cousins are pretty miffed. I've written them e-mails (with my daughter's authorization) on what to fix, but they're arguing & delaying. We did get one very obvious $5,000 concession of something to be paid back to the trust, but that's the tip of the iceburg. The plan is to hold off until things are either fixed, or they convince me that what they did was proper - for instance, by producing time records justifying their compensation, something I have asked them for. I figure they don't want the legal expense of taking this to court any more than I do, and there's so much evidence I can't believe they'd dare. I asked the question about the Statue of Limitations since if I can convince them the old stuff is still a sueable offense, then I have more leverage in getting them to include it in the fix.

I'm also wondering about filing an ethics complaint against the trust attorney for taking action against me when he was suppose to be representing me. I sincerely feel he deserves it, but it'll certainly be the end of any relationship with my cousins - something that probably can't be salvaged at this point anyway. The attorney is the father-in-law of my cousin's daughter. He & my cousin (the one taking $29,000/year) have grandchildren in common.

It's a mess and no family should have to go through this. Any help you can offer, Don, will be very appreciated.

Mommer
 
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Dandy Don

Senior Member
You have no leverage. If you think they are going to admit to wrongdoing or give you evidence of it to use against them in court, you are mistaken. Can't you see that all you are doing is delaying the closing of probate and making them more angry at you and your daughter, thereby resulting in an impasse? And don't think that ALL Chicago trust attorneys charge $400--shop around for others who could give advice on what to do about this at a more reasonable fee. The trustees' overcharges on fees alone tend to make them guilty of breach of fiduciary duty and only an attorney can tell you what reasonable damages would be in your situation.
 
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Mommer

Junior Member
I already have all the evidence I could possibly need. It's been a slow process, but I have gotten them to hand over cancelled checks, bank statements, etc. I even have them on tape admitting to taking more than our agreements, but giving extremely lame excuses of why they thought this was okay (sudden appearance of back fees owed, or simply that she or a family member deserved it in their minds). Evidence is simply not a problem.

What we're doing is actually what my Chicago attorney suggested before my aunt died. He warned me they'd try to push through a fast closing without being fully accountable, which is exactly what they did try. He said not to sign the agreement allowing the trust to close until they adequately address all issues. After much hassel, I did get them to send me the rest of the accounting records and that's how I found out about some of this stuff.

I believe I have plenty of leverage as I've only asked them to fix the discrepancies where I have the evidence in hand. There is still more fishy stuff that I could go after. I have told them that if I need to hire another attorney, then some more bigger ticket items are going to be on the table and I was very specific as to what those would be. I told them I didn't want it to come to this and I did hope we could reach an agreement

We are communicating and they are being stubborn. I'm waiting on the answer to my last e-mail.

Two questions:

1) If I do hire another attorney, would it make sense to get one in my own area (I live in downstate Illinois) where the rates are cheaper and I'll have face-to-face contact, or one around Chicago since that's where the jurisdiction is should this have to go to court (I sure hope not)?

2) Also, what is your opinion on the trust attorney's behavior? He had claimed to be representing all 3 of us, but then when I asked the main trustee (his son's mother-in-law) to reduce her fees to more reasonable levels, he actively argued with me over the phone to let her keep them where they were. When I commented that it sounded like he should resign (because he was actively taking sides), he then wrote an inflammatory letter against me to the head trustee (the one taking the huge fees) claiming that I wanted him to resign if he would not force her to reduce her fees (I never said that at all; I just didn't think he should be arguing on her behalf). At a later date, after I hired my own attorney, he told her she could dismiss me as trustee - I know this because he put it in writing in a letter to my attorney. I have copies of both the inflammatory letter to my cousin and of the one where he said I could be dismissed.
 

Mommer

Junior Member
Can't you see that all you are doing is delaying the closing of probate ...
There is no probate at the current time. If they open one in Mexico to handle the house, I will not be involved. This is the trust that they're trying to disburse.
 
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Dandy Don

Senior Member
Consulting a trust attorney outside of Cook County is an excellent idea--the only requirement is that they be familiar with Illinois trust law. The tapes you have may or not be admissible as evidence in a court of law--you need to be asking an attorney about this.

When you told the other trustee that their fees were unreasonable, did you at that time know what the appropriate trustee fee was according to law? The trustee's reaction is somewhat understandable but were you aware of what the acceptable fee was or were you just trying to get them to reduce their rates? I was just curious.
 

Mommer

Junior Member
The tapes you have may or not be admissible as evidence in a court of law
The taping of the meeting was the head trustee's idea. She passed out tape recorders to all 3 of us trustees and we all have our own recording. It was very open, so I don't know of any reason why it wouldn't be admissable.

When you told the other trustee that their fees were unreasonable, did you at that time know what the appropriate trustee fee was according to law?
I'm not sure what the law says about it, but my attorney agreed they were unreasonable. The realization that her fees were excessive started when I attended a continuing educaton session on trusts & estates (I'm a CPA, now retired) where we had some informal talks about situations we were involved with. Every single one of these professionals (both other CPAs and trust attorneys) thought the fees my cousin was taking were outrageous. This spurred me to call some trust firms around Chicago to see what was normal for the area. What I found out was that professional trustees with good credentials and who actually do periodic accounting reports would only charge around $20,000 - $23,000 for a trust that size. At the time, my cousin was taking $32,000 and hiring out much of the work that a professional trustee would do.

I tried to gently tell my cousin over the phone what I'd found out and she promised we'd talk about it later, and then went ballistic when I tried to bring it up again before the year ended. I sent a memo to both my cousins telling them of the reaction of all the professionals at the seminar and showing them my notes on talking to 3 different trustee companies that serviced the Chicago area. I think I provided them with plenty of evidence that the fees needed to be reduced.

The trust attorney (also my cousin's personal attorney & a member of her family) found a trustee company who would charge $29,000 per their schedule and so she only reduced her fee to $29,000 from the $32,000 it had been. First off, from calling around I found that the fee schedule is normally just a max starting points for these companies and they negotiate downward to get your business. Second, I never claimed there wasn't a company somewhere that might charge more, but that there were plenty of well qualified professional trustees who charged less and that the prices seemed pretty consistent after talking to 3 companies, none of whom were scrutinized for being at the top or bottom of the price scale. That is, I wasn't bargain basement or Neiman Marcus shopping, I was just going where the Chicago banks directed me. And, last, my cousin was hiring out a lot of the duties these trustees were performing. That is, she really was not doing the complete job herself and she was certainly giving me continual headaches about being accountable.
 

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