Ernie Banks Estate, Part 2: Probate vs. Non-Probate Property
A lot of people are following the Ernie Banks probate case with intense interest, attorneys included. I think part of the reason for the public interest is that a lot of people have either gone through a similar family situation, or know someone else that has. It has touched a chord. But this is not the type of case that is covered by the media very often. That, and of course Ernie Banks was a beloved figure in Chicago and one of the greatest baseball people of all time. The Cubs are going to honor his legacy throughout the 2015 season.
I wrote my first installment on this case back on February 17 regarding the disturbing fight over Mr. Cub’s body and the finer points of Illinois’ Disposition of Remains Act. You’ll recall that, at least initially, Ernie’s caregiver/confidant/caretaker/friend/agent (we’ll have to pick one label at some point), Regina Rice, wanted Banks to be cremated, while Ernie’s estranged wife, Elizabeth, wanted burial. As it turns out, it appears that this issue was resolved shortly thereafter and that Banks was buried at Graceland Cemetery in Wrigleyville. Hopefully this particular issue is now laid to rest.
Introduction to Blog Series
This post is the second installment in what I expect to be a (likely) long-term series of (roughly monthly) blog posts discussing this case from the perspective of a local probate attorney (me). Specifically, in addition to reviewing the latest developments, my plan is to use the proceedings to highlight and explain, in a general sense, various Illinois probate concepts as they arise. And if the early returns are any indication, this estate is likely to touch on a wide range of concepts, many of which I’ve yet (but was planning) to cover on the blog. Likely expected topics for future posts include:
- Citations to discover and recover assets
- Creditor claims against the estate
- Spousal renunciation and support awards
- Inventory and Accounting
- Will and Trust contests generally
- Testamentary capacity and undue influence
- Discovery in estate litigation
- Attorney fees
- Estate taxes
- …and more.
What should readers NOT expect from this series? I will not take sides in the dispute. While I’m sure that I will have some impressions to share, this case is ultimately going to be decided by the judge and/or jury (unless earlier settled) based upon the facts presented — as it should be.
As an initial observation though, I do find it interesting to read some of the comments on social media. People (already) have strong opinions — going both ways. On one side you’ll hear “She’s a gold digger and belongs in jail”; and on the other it’s “Where were the kids? She was caring for him, she deserves it.” In reality, the truth is rarely so black-and-white. That’s why we have courts. Also, while I regularly practice in this courtroom, I am not involved, and have no stake, in this particular case.
On to today’s concepts — Probate vs. Non-Probate Property, and Pour-Over Wills…
Probate vs. Non-Probate Property
The biggest recent development in the case comes out of a probate court hearing held on February 24 before the Honorable Judge James G. Riley. The news headline from that hearing is a report that the attorney for the executor, Regina Rice, told Judge Riley that the initial estimate of Banks’ known assets is just $16,000. Based on that headline, speculation has run from ‘Banks spent it all’ to ‘his caretaker took everything.’ In all likelihood though, neither is true, and the (less sensational) explanation is most likely revealed in the basic concept of probate vs. non-probate property.
When Regina Rice’s counsel told the court that the estate was valued at $16,000, she was likely only alluding to the value of known “probate property.” What is probate property? It’s assets held in the decedent’s sole name only (with no designated beneficiary), and tenancy in common property.
What is NON-probate property? Everything else. Examples of non-probate property:
- Property held in joint tenancy (with a surviving joint tenant);
- Property subject to a beneficiary designation (typically assets like retirement accounts and life insurance, but sometimes other types of assets as well); and
- Property titled in a living trust.
The Pour-Over Will
That last example (a living trust) is of particular significance here. I have reviewed Ernie Banks’ filed Will (along with some other documents) from the probate file (it is, of course, public record). The beneficiary of 100% of the Ernie Banks Estate is (drum roll…) The Ernest Banks Declaration of Trust (also dated October 17, 2014). In estate parlance, this is what is commonly referred to as a “pour-over will.” Meaning that everything passing under the will (the ‘probate property’) gets poured over into the separate trust and then disposed of under the terms of that trust.
What are the terms of the trust? That hasn’t been filed or disclosed (yet). The pleadings indicate that Regina Rice is the sole trustee of the trust, but the identity of the beneficiaries of the trust seem to be not yet publicly disclosed. Banks’ Will does contain a widely reported “disinheritance” statement: “I am making no provisions under this Will for my wife and children, not for a lack of love and affection for them and for reasons best known by them.” The (likely correct) assumption from this clause is that Banks’ wife and children are also not beneficiaries of the trust, although that’s not explicit in the Will.
So, what’s the significance of the separate trust and its non-probate property? Does this mean that Banks’ wife and children are out of luck? Not necessarily. Non-probate transfers, such as assets in a living trust, can be contested on grounds very similar to those for contesting the will, and can also be heard by the probate court. Given that it appears that the Trust was signed the very same day as the Will (this is not uncommon), a will/trust contest looks to be where this is headed. I’ll leave the substantive discussion on will and trust contests, and testamentary capacity and undue influence, to future blog posts.
Additional Early Developments
I thought I would also briefly touch on a few additional early developments. The first two are topics I’ve previously blogged about generally:
- On February 9, Elizabeth Banks filed a Petition for Formal Proof of Will. One of my first posts on this blog was on Formal Proof of Will Hearings in Illinois.
- On February 24, Judge Riley approved a request to convert the estate from independent to supervised administration. This is a fairly common request for estates that appear highly contested. I previously discussed Independent vs. Supervised Administration in the context of estate planning. Supervised administration generally means that the executor is required to request court approval before taking certain significant actions, rather than acting independently.
- Also on February 24, it was widely reported that Judge Riley ordered Rice to provide an “accounting” of Banks’ assets. What actually happened is that Elizabeth Banks asked for leave to file a “citation to discover assets” against Rice, which was routinely approved. I plan to discuss citations in a future blog post.
And Finally, a Roundup of Articles, Interviews and Blog Posts
I don’t necessarily endorse the views presented, but I found the following articles and blog posts to be interesting:
- No rest for Mr. Cub, no matter where he is (Chicago Tribune, by David Rutter, 02-17-15)
- Family to contest Ernie Banks’ Will (WTTW Chicago Tonight, Evan Garcia interviews attorney David Lieberman, 02-17-15)
- Ernie Banks Dispute: Karen Conti Explains the Importance of Estate Planners (WGN Radio, Ross Cochran interviews attorney Karen Conti, 02-18-15)
- Estate Of Ernie Banks In Turmoil As Caregiver Claims To Be Sole Heir (Forbes, by Danielle and Andy Mayoras, 02-19-15)
- Who Is The Rightful Heir To Ernie Banks’ Estate? (An Unquiet Chicagoan Blog, by Jocelyn Geboy, 02-19-15)
- The Ernie Banks will disaster and what it teaches us (Chicago’s Real Law Blog, by Michael Helfand, 02-23-15)
- And, in the End (NIU Newsroom Blog, 02-25-15)
- One last time Ernie Banks swung and missed (Chicago Tribune, by Richard Sugar, 03-02-15)