2013 I LApp (4th) 121055 NO. 4-12- 1055 I N THE APPEL LATE COURT OF I L L I NOI S FOU RTH DI STRI CT L EWI S L I

NN, as Tr ustee of the Autonomy

Trust 3, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE; B RI AN HAMER, in His Officia l Capacity as Dire ctor of T he Depa rtment of Reve nue; and DA N RUTHERFO RD, in His Offic ial Capac ity

as Tre asure r of the State of I llinois , Def endants-A

ppellees. ) ) ) ) ) ) ) ) Appea l from Circuit Court of Sang amon County No. 07TX0001/01 Honora ble J ohn Schmidt, J udg e Presiding

.

______________________________________________________________________________

J USTI CE TURNER delivere d the judg ment of the c ourt, with opinion. J ustices Knec ht and Steigma nn concur red in the judg ment and opinion. OP INION ¶ 1 In May

2007, plaintiff, L ewis L inn, as trustee of the Autonomy

Trust 3, filed a verifie d complaint for de clar atory and injunctive re lief ag ainst defe ndants, the De partment of Revenue (De partment); B rian Ha mer, a s the Depa

rtment' s director ; and Dan Ruther ford, a s the I llinois Trea surer . Plaintiff's c omplaint sought the re turn of an inc ome-tax pay ment it had made under pr otest beca

use any income taxation on the Autonomy Trust 3 was unc onstitut ional as the trust had no conne ctions with I llinois . The pa rties filed c ross-motions for summary judgme nt. After memoranda

and ora l arg

uments, the Sang amon County circ uit court g rante d defe ndants' motion for summary

judgme nt and denied pla intiff' s. ¶ 2 Plaintiff appea ls, arguing the trial court e rre d in gr antingsummary judgme nt in defe ndants' favor

beca use (1) the I llinois choice -of- law provision in the orig inal trust ag ree ment 

## F I L E D Dece m ber18, 2013 Car la Bend er 4 Dis tr ic t Ap pel la te t h Cour t, ILdoes not apply to the Autonomy

Trust 3, and (2) the impositi on of I llinois income taxation on the Autonomy

Trust 3 is unconstituti onal as it violates both the due pr ocess a nd commerc e cla

uses. We reve rse a

nd rema nd with directions. ¶ 3 I . BA CKGROUND ¶ 4 In Marc h 1961, A.N. Pritzker enter ed into a trust agree ment establishing " P. G. Trusts" w ith trustee Meyer G oldman, in which 20 sepa rate , irrevoc able trusts we re c rea ted. At the time of the a g ree ment, both A.N. and Goldman w ere I llinois residents, a nd the trust assets
wer e deposited in I llinois . Article IX of the Ma rch 1961 trust a g ree ment allowed the tr ustee to distribute the whole or pa rt of the c orpus of the trust to a diff ere nt trustee or truste es to hold in further trust for the e x clusive bene fit of the bene ficiar y of ea ch of the 1961 trusts. Article V, section 2(b) , also g ave the trustee the pow er, in his discre tion, to dis tribute the whole or part of the trust corpus to its benef iciary afte r the be nefic iary

had attaine d 30 year s of ag e. F urther, article XIV of the Ma

rch 1961 a g ree ment stated the following : "This Agree ment shall be construed a

nd administered a

nd the validity

of the trusts her eby

cre ated sha ll be deter

mined in
acc ordanc e with the laws of the State of I llinois ." O ne of the trusts was for the primary benef it of A.N.' s g randda

ug hter L inda Pritz ker a

nd was named the " L inda Trust." ¶ 5 Be g inning in 1968, other adult benef

iciarie s of the P.G. Trusts (not L inda) c reated
a new set of trusts ca lled the A.N.P. Trusts with assets fr om the P.G. Trusts. I n 1975, Goldman filed a c omplaint, addressing , inter alia , the adult bene ficiar ies' rig ht to transfer their intere sts to the A.N.P. Trusts. Goldman v. Pritzker, No.75-CH-4214 ( Cir. Ct. C ook Co.). In J une 1977, the circ uit court enter ed a le ng thy order g rantingthe re lief re quested in Goldman' s complaint, as amende d, and thus approvingthe cr eation of the A.N.P. trusts. I n the written orde r, the c ourt
- 2 -reta ined jurisdiction of the ca use and pa

rties for the purpose of

paying the fee s, costs, and expenses of the proc eeding s and for any further order s nece ssary

to interpret or

implement the provisions of the cour

t's or der. ¶ 6 A.N. died in 1986 as a n I llinois resident, a

nd his estate wa s probated in I llinois

. At some point, Thomas Pritz ker of I llinois , Marsha ll Eisenbergof I llinois , and Ar nold Weber
succe eded G oldman as trustee s of the L inda Trust and w ere the trustees of the L inda Trust in 2002. (In 2008, the trustees of the L inda Trust still included two I llinois residents a nd one nonresident.) On J anuar

y 2, 2002, the trustees of

the L inda Trust exercise d their limited power of appointment conta ined in article s V and IX of the Ma rch 1961 trust a g ree ment and irre vocably distributed assets from the L inda Trust to plaintiff, as trustee of the Autonomy Trust 3, for the exclusive benefit of L inda. ¶ 7 Alongwith the power of appointment, the trustee s of the L inda Trust and pla intiff enter ed into a trust agree ment that cre ated the Autonomy Trust 3. Provision 9 of the J anuar y 2002 trust ag ree ment named Jay Robert Pritz ker of

I llinois as protec tor of the trusts cr eate d here under. We note that J ay was replace d as protec tor of the Autonomy Trust 3 in Dec ember 2002 by Ba sil Zirinis of Connec ticut. Moreover , provision 14 of the January 2002 trust ag ree ment contained the perpe tuities savings c lause a nd ref ere nced the lives of those name d in the Marc h 1961 trust ag ree ment. L ast, provision 15 stated the Autonomy Trust 3 was to be construed a

nd regulated under

Texas law, " except that the terms ' income,' ' principal,' and ' power of appointment' and the pr ovisions relating there to shall be interpre ted under the laws of the state of I llinois ." ¶ 8 In Fe bruar y 2004, plaintiff filed a

complaint in the probate court of H arr is County , - 3 -Texas, seekingref ormation of provision 15 of the Autonomy Trust 3 and other

trusts that applied I llinois law to some of their terms. Plaintiff soug ht to strike the languag e re fer ringto I llinois law, lea ving the trusts to be construed a nd reg ulated by only Texas law. On Nove mber 4, 2005, the probate cour

t entere d an orde r, grantingthe re lief plaintiff re quested. How ever , the judg ment stated the following : "This Judgment shall bec ome ef fec tive as to ea ch of the Trusts as of the date that the I

nterna l Revenue Ser

vice issues a

favor able r

uling holdingthat the modifications and dec larations of this J udg ment to the Trust do not result in the loss of such Trust' s g ener ationskipping tra

nsfer tax ex empt status or otherwise subject such Tr ust to the ge neration-skipping transfe r tax." ¶ 9 In 2006, L inda, her children, a

nd the other c ontinge nt benef iciarie s of the Autonomy

Trust 3 wer e not I llinois residents. Plaintiff re sided in Texas, and the Autonomy Trust 3 was a dminist ere d in Texas. The Autonomy Trust 3 had no a ssets in I llinois

. ¶ 10 In April 2007, the Autonomy Trust 3 filed a 2006 nonr esident I llinois income and repla ceme nt tax return, r eportingno income fr om I llinois source s and thus no tax was owed. The Depa rtment rec lassified the Autonomy Trust 3 as an I llinois resident unde r sec tion 1501(a) (20)( D) of the I llinois Income Tax Act (Ta x Act) ( 35 I L CS 5/ 1501(a) (20)( D) (West 2006)), taxed 100% of the trust's r eporte d income, and a ssessed a de ficienc y liability of $2,729. Pursuant to section 2a of the State Offic ers a nd Employ ees Mone y

Disposition Act (30 I L CS 230/2a (West 2006)), the Autonomy Trust 3 paid the $2,729 in income tax under pr otest. ¶ 11 In May

2007, plaintiff filed the ve rified c omplaint for dec laratory and injunctive relief , asser ting I llinois ' s imposit ion of income tax on the Autonomy Trust 3 violates the
commerc e, due pr ocess, a nd equal pr otection clause s of the United States Constituti on (U.S.

- 4 -Const., art. I , § 8, amend. XIV, § 1) a nd the uniformity

clause of the I llinois Constit ution of 1970 (I ll. Const . 1970, art. IX, § 2). F ormer I llinois Trea surer Alexi Giannoulias was orig inally listed as one of the def endants a nd was late r re place d by

curr ent I llinois Trea surer Dan Rutherf

ord when Gia nnoulias' s term ende d. ¶ 12 In September 2011, pla intiff filed a motion for summar y judgme nt with a supporting me morandum. Alongwith the memorandum, plaintiff submitted a de clar ation by him and one by

Z irinis. I n his declar ation, plaintiff states the Te x as proba te cour t's judg ment beca

me eff ective on N ovember

4, 2005, the date it wa s entere d. Z irinis stated the duties of the Autonomy

Trust 3' s protector

includes the powe r to remove any trustee, r evoke the desig nation of a suc cessor

trustee, a nd appoint a succ essor prote ctor. ¶ 13 In May

2012, defe ndants filed a c ross-motion for summary judge ment and a response to plaintiff' s motion for summary judgme nt. Defe ndants first asser ted the ca se could be decide d on nonconstitutional grounds a nd argued (1) the grantor of the Autonomy

Trust 3 voluntarily

established all of the trusts and subsequent trusts pursuant to I llinois law, (2) the Texas probate c ourt judg ment is not bindi ngon this court, and (3) the Depa rtment assesse d tax on the Autonomy

Trust 3 in acc ordanc e with I llinois statutes. Def endants then a

rgued the income tax on the Autonomy Trust 3 was c onstitut ional. In support of their motion, defe ndants attache d the following : (1) the Ma rch 1961 trust a g ree ment; (2) plaintiff' s first response to defe ndants' interrog atories ( in interrog atory No. 9, plaintiff states the I nterna l Revenue Ser

vice had not issued a r

uling r eg ardingthe g ener ation-skipping tr ansfe r tax); (3) plaintiff' s response to defe ndants' second se t of supplemental interr og atories; (4) plaintiff' s response to de fenda nts' reque st to admit; (5) the January 2002 trust ag ree ment; (6) the e x erc ise of the powe r of

- 5 -appointment establishing the Autonomy Trust 3; (7) plaintiff' s response to de fenda nts' f irst supplemental interr og atories; (8) plaintiff' s petition in t he Te x as probate cour t; and (9) the T exas probate court judg ment. In J uly 2012, plaintiff filed a

memorandum in re sponse to defe ndants' cross-motion for summar y judgme nt and did not attach a ny supporting doc uments. In September 2012, defe ndants filed a r eply , attachingthe J une 1977 judg ment of the Cook County circ uit court. ¶ 14 On Octobe r 12, 2012, the trial c ourt hea rd ora l arg

uments on the cross- motions for summary judgme nt. Twelve da

y s later, the c ourt enter ed a written order , g rantingdefe ndants' motion for summary

judgme nt and deny

ing pla intiff' s. In rea chingthat judgme nt, the court found the Marc h 1961 trust ag ree ment provided I llinois law wa s to gove rn the trust agree ment and any trusts hereby

cre ated, whic h would include the Autonomy Trust 3. The c ourt then conc luded the fac t I llinois law g overne d the Autonomy Trust 3 was a

sufficie nt contact to satisfy the due proce ss and commer ce c lauses. ¶ 15 On Novembe r 9, 2012, plaintiff filed a timely notice of a

ppeal, whic h was in sufficie nt compliance w ith I llinois Supreme Court Rule 303 (e ff. Ma y 30, 2008), despite its failure to listthe Depa

rtment as a de fenda

nt. See Har

ry W. Kuhn, I nc. v. County of Du Pag e, 203 I ll. App. 3d 677, 684-85, 561 N.E.2d 458, 463 (1990) (findingthe fa ilure to list all of the defe ndants in notice of a

ppeal did not re nder the notice fatally defe ctive whe re the defe ndants
wer e all re prese nted by

the same attorney

and the a ppellee did not suff

er pr ejudice) . Thus, this court ha s jurisdiction under I llinois Supreme Court Rule 301 (e ff. F eb. 1, 1994). ¶ 16 I I . ANALYSI S ¶ 17 A. Summary J udg ment
- 6 -¶ 18 A g rant of summar y judgme nt is only

appropr iate whe n the pleading s, depositions, admissions , and af fidavits demonstrate no g enuine issue of materia l fac t exi sts and the movant is entitled to judgment a s a matter of law. 735 I L CS 5/ 2-1005(c ) (West 2010); W illiams v. Mancheste r , 228 I ll. 2d 404, 417, 888 N.E.2d 1, 8-9 (2008). " ' As in this case, whe re the par ties file cr oss-motions for summary judgme nt, they

invite the court to dec ide the issues prese nted as a

matter of la

w.' " A.B.A.T.E. of Illinois, Inc. v. Giannoulias , 401 I ll. App. 3d 326, 330, 929 N.E.2d 1188, 1192 (2010) (quoting Liberty Mutual Fire InsuranceCo. v. St. Paul Fire &Marine Insuranc e Co. , 363 I ll. App. 3d 335, 339, 842 N.E.2d 170, 173 (2005)) . We review de

novo the trial cour

t's r uling on a motion for summary

judgme nt. See W

illiams , 228 I ll. 2d at 417, 888 N.E.2d at 9. ¶ 19 B. I llinois Income Tax ¶ 20 The star

ting point for inc ome taxation in I llinois is section 201(a) of the Tax Act (35 I L CS 5/ 201(a) (West 2006)), which pr ovides, in releva nt part: " A tax measured by net income is here by

imposed on ever

y individual, corporation, trust and estate *** on the privileg e of ea rningor re ceivingincome in or a s a resident of this State." ( Emphases a dded.) See also Rock wood Holding Co. v. Department of Rev enue , 312 I ll. App. 3d 1120, 1123-24, 728 N.E.2d 519, 523 (2000). F or re sidents, "[a]ll i tems of income or deduction which w ere taken into
acc ount in the computation of base inc ome for the taxable y ear by a re sident shall be allocated to this S tate." 35 I L CS 5/ 301(a) (West 2006). Section 1501(a) (20)( D) of the Tax Act (35 I L CS 5/1501(a)( 20)(D) (West 2006)) def ines " resident," in pertinent par t, as " [a] n irrevoc able trust, the g rantor of which wa s domiciled in this S tate at the time suc h trust became irre vocable ." T he parties a g ree the Autonomy Trust 3 is an irre vocable trust, and A.N. Pritzker, who wa s an I llinois

- 7 -resident, is consider ed to be the grantor of the Autonomy

Trust 3. Thus, under the Tax Act, the Autonomy

Trust 3 is an I llinois resident a nd subject to I llinois income tax. ¶ 21 On appe al, the par ties now ag ree this case c annot be r esolved on a nonconstitutional basis. Thus, we turn to plaintiff' s alleg ations of constitutional violations. Plaintiff asserts the imposition of I llinois income tax on the Autonomy Trust 3 is unconstituti onal as applied to the trust a s it viol ates both the due proce ss and the commer ce c lauses. " In undertaking our

revie w, we pr esume that statutory enac tments are c onstitut ional. The burde n is on the par ty challeng ing the statute to clea rly establish any

constitutional invalidi ty . The burde n is a formidable one, and this cour t will uphold a statute's va lidity whene ver it is rea sonably possible to do so." Allegis Realty Inv estors v. Novak, 223 I ll. 2d 318, 334, 860 N.E.2d 246, 255 (2006). ¶ 22 1. Due Proc ess ¶ 23 For

a tax to comply

with the due proc ess clause , (1) a minimum connec tion must exis t betwee n the state a

nd the per son, proper

ty , or transa ction it seeks to tax, and (2) " the income attributed to the State f or tax purposes must be rationally related to values c onnecte d with the taxi ngState." ( Interna l quotation marks omitted.) Quill Corp. v. North Dakota , 504 U.S. 298, 306 (1992) (quoting Moorman Manufac turing Co. v. Bair , 437 U.S. 267, 273 (1978)). In Quill Corp ., 504 U.S. at 307-08, the Supreme Court equated tha t analy sis with the deter mination of whether

a state ha s persona l jurisdiction over a g iven entity . After analy zing the
case law re g ardingpersona l jurisdiction, the Quill Corp. Court held the due pr ocess c lause did not require phy sical pre sence in a state for the collec tion of a use tax. Quill Corp. , 504 U.S. at 308. There , the company' s ong oing solicitation of business in North Da kota was more than
- 8 -enoug h to subject it to North Dakota' s use tax. Quill Corp. , 504 U.S. at 308.

¶ 24 Plaintiff asserts the Autonomy Trust 3 has no conne ctions to I llinois . He notes the Autonomy

Trust 3 is a Texas trust that is gove rned by the laws of a

nd administered in Te x as. Moreove r, in 2006, the Autonomy Trust 3' s trustee, be nefic iary , and prote ctor we re a ll not residents of I llinois . Wit hout any connec tions to I llinois , the impositi on of I llinois income tax on the Autonomy

Trust 3 would be unc onstitut ional under the due proc ess clause . Plaintiffs have shown no conne ctions appea r to exist with the trust in this case . Howeve r, def endants c ontend
connec tions do ex ist because (1) the Autonomy Trust 3 owes its exist ence to I llinois , and (2) I llinois provides the Autonomy Trust 3' s trustee a

nd benef iciary with a panoply

of leg al bene fits and opportunities. We note that, on appe al, def endants do not ar gue that, in 2006, the Autonomy Trust 3 still contained terms to be interpr eted unde r I llinois law and that the I llinois choice of law provision in the March 1961 a g ree ment applies to the Autonomy Trust 3. ¶ 25 Both pa

rties cite the Conne cticut Supreme Court' s decision in Chase Manhattan Bank v . Gavin , 733 A.2d 782 (Conn. 1999), whic h was de cided a fter the United States Supreme Court's Quill Corp . decision. Ther e, the plaintiffs a sserted Connec ticut's inc ome taxation on the undistributed tax able income of four testamentar

y trusts and one inter vivos trust was unconstitutional because it violated the due proc ess and c ommerce clause s. Gavin , 733 A.2d at 785-86. Since the c ase be fore us involves an inter vivos trust, we foc us on the fac ts and ana ly sis related to the inter vivos trust. Under Connec ticut law, a r esident inter vivos trust is " ' a trust, or a portion of a trust, consistingof the prope rty of (i) a person who w as a r esident of this state at the time the proper

ty was tra nsfer red to the trust if the tr

ust was then irre vocable .' " Gavin , 733 A.2d at 789 (quotingConn. Gen. Stat. § 12-701(a )(4) (D) ( 1993)). How ever , with an inter vivos trust,
- 9 -taxable income is then modifiable under a for mula that takes into ac count whethe r the trust has any resident, nonc ontinge nt benef iciarie s. Gavin , 733 A.2d at 790. Thus, Connec ticut tax es only that portion of the inter vivo trust's undistributed income that corr esponds to the number of nonconting ent bene ficiar ies that live in Connecticut. Gavin , 733 A.2d at 790. Ac cording ly , in Gavin , 733 A.2d at 790, the taxability of the inter vivos trust's inc ome was ba sed on the fa cts the trust's se ttlor was a Connec ticut resident whe n he esta blished the trust and the trust' s benef iciary
was a Connecticut re sident. ¶ 26 Reg ardingdue proc ess, the Connec ticut Supreme Court found the c ritical link betwee n Connecticut and the undistributed income soug ht to be taxed was the fa ct the inter vivos trust's nonc ontinge nt benef iciary was a Connecticut re sident duringthe tax y ear in question. Gavin , 733 A.2d at 802. It expl ained that, a s a Connecticut r esident, the nonc ontige nt benef iciary ' s rig hts to the eventual re ceipt and e njoy ment of the a ccumulate d income we re protec ted by

Connecticut law so longas the be nefic iary rema ined a r esident of the state. Gavin , 733 A.2d at 802. The Gavin court re cog nized the connec tion was " more attenuated" than in the
case of a te stamentary

trust but sti ll found the conne ction was suff icient to satisfy

due proc ess. Gavin , 733 A.2d at 802. ¶ 27 In support of its conclusion, the Gavin court noted the United State Supreme Court had held a state may tax t he undistributed income of a trust base d on the pre sence of the trustee in the state beca

use it g ave the trustee the pr otection and be nefits of its laws ( Gree nough v. Tax Assessors , 331 U.S. 486, 496 (1947)), which ar e the same bene fits and protec tions provided a

resident, nonc ontinge nt benef iciary

. Gavin , 733 A.2d at 802. The Gavin court a lso noted its conclusion was c onsistent with the California Supreme Court' s decision in McCulloch v.
- 10 -Franchise Tax Board, 390 P.2d 412 (Cal. 1964). Gavin , 733 A.2d at 802. The re, the California

Supreme Court did not find a due- proce ss violation where Califor nia taxed the undistributed income of a

n out-of-state testamentar y trust based solely

on the California r esidenc e of the trust's benef iciary

. McCulloch , 390 P.2d at 418. It rea soned California la w provided be nefit and protec tion to the resident bene ficiar y . McCulloch , 390 P.2d at 418-19. ¶ 28 Def

endants be g in their argument the Autonomy Trust 3 owes its exist ence to I llinois by

noting the tr

ust's grantor w as an I llinois resident. In support of that ar g ument, they cite portions of the Gavin opinion that found the g rantor' s in-state re sidency was suff icient to establish a minimum contact as to the four testamentar

y trusts as well as other

case law addre ssing testamentary

trusts. Howeve r, we are dealing with an inter vivos trust. Since an inter vivos trust is not create d by the probate of the de cede nt's w ill in a state court, its connec tion with the state ha s been de scribed a s more attenua ted than a te stamentary

trust. Gavin , 733 A.2d at 802; District of Columbia v. Chase Manhattan Bank, 689 A.2d 539, 547 n.11 (D.C. 1997). Moreove r, an irr evoca

ble inter vivos trust does not owe its exis tence to the laws and c ourts of the state of the grantor in the sa me way a testame ntary

trust does and thus does not have the same perma nent tie. District of Columbia , 689 A.2d at 547 n.11. With the inter vivos trust, the Connecticut Supreme Court f ound the critical

link between the state and the inter vivos trust was the trust' s nonconting ent bene ficiar y was a Connecticut re sident duringthe tax y ear in question. Gavin , 733 A.2d at 802. Autonomy Trust 3 does not have a nonconting ent bene ficiar y in I llinois

. Def endants c ite no case s finding a g rantor' s in-state re sidency is a sufficie nt connec tion for due proce ss with an inter vivos trust. ¶ 29 On the other hand, we note dec isions from other states have found the g rantor' s in-

- 11 -state re sidence insufficient to establish a minimum connec tion. I n Blue v. D epartment of

Treasury , 462 N.W.2d 762, 764 (Mich. Ct. App. 1990), the Michig an appe llate cour t found insufficient c onnections betwe en an inter vivos trust whose g rantor w as a Michig an re sident and the State of Michig an' s imposit ion of an income tax. There, the only thing in Michig an wa s one non-income- producingparc el of re al estate , and thus the cour t concluded Mic higa

n provided no ong oing pr otection or be nefit to the trust. Blue , 462 N.W.2d at 764. In Merc antile-Safe De posit &Trust Co. v. Murphy , 242 N.Y.S.2d 26, 28 (N.Y. A pp. Div. 1963), a N ew Yor k appellate court found a due proce ss violation where N ew Yor k imposed an income tax on income ac cumulated in a trust cre ated by

a Ne w York r esident whe re the trustee r esided in Mar yland, the trust was administered in Mar

yland, and trust asse ts were in the trustee' s exclusive possession and control in Maryland. Acc ording ly , we f ind the fac t the Autonomy Trust 3' s g rantor w as an I llinois resident is not a suff

icient conne ction to satisfy due proc ess. ¶ 30 Def

endants fur

ther a rgue the Autonomy

Trust 3 exist s only

beca use of I llinois law. Howe ver, Autonomy Trust 3 resulted f

rom a January

2002 exercise of

the limited power of appointment by

the trustee of the P.G. L inda Trust, which w as provided f or in the Mar ch 1961 trust ag ree ment. Assuming arguendo , an I llinois court ruling validated a

provision of the Mar ch 1961 ag ree ment that allowed f or the limited power of

appointment that was late r invoked to
cre ate the Autonomy

Trust 3, the Autonomy

Trust 3 was c rea

ted by the provisions of the Mar ch 1961 ag ree ment allowingfor powe rs of a ppointment and not I llinois law. F urther, w ith income taxation, t he foc us of the due pr ocess a naly sis is on t he tax y ear

in question, which would be 2006 in this case. See Gavin , 733 A.2d at 802 (notingthe conne ction for the inter vivos trust was the fa ct a nonc ontinge nt benef iciary was a n in-state re sident duringthe tax y ear in question); see
- 12 -also In re Swift , 727 S.W .2d 880, 882 (Mo. 1987) (a ddressingincome taxation on a testamentar y trust and stating , "An income tax is j ustified only when c ontemporar

y benef its and protections
are provided the subjec t property or entity duringthe re levant taxing per iod") . Thus, what happene d historically

with the trust in I llinois courts and unde r I llinois law has no be aringon the 2006 tax y ear . ¶ 31 Additionally , defe ndants argue the State of I llinois provides the trustee and benef iciary of the Autonomy

Trust 3 with a panoply

of leg al bene fits and opportunities. In support of its assertion, it ag ain cites c ase la w addr essingtestamentar y trusts. See Gavin , 733 A.2d at 799; District of Columbia , 689 A.2d at 544. As we have stated, this case involves a n inter vivos trust, not a testamentar y trust. The Autonomy

Trust 3 was not in exist ence when A.N

. Pritz ker die d and thus was not par t of his probate c ase. A ccor dingly , no I llinois probate court ha s jurisdiction over the Autonomy Trust 3, unlike in the testamentar y trust case s. ¶ 32 Def

endants a lso cite sever al I llinois statutory provisions and claim the Autonomy Trust 3, plaintiff, L inda, or a conting ent bene ficiar

y can se ek those statutory

provisions at any time. Howeve r, the pa

rties agree that, afte r the Nove mber 2005 Te x as re formation orde r, the Autonomy

Trust 3 choice of law pr ovision provided for only the application of Texas law. Fur ther, a s stated ea

rlier, the 1977 Cook County case has no application at all to the Autonomy Trust 3 bec ause it dea lt with beneficia ry power s of appointment, not trustee powe rs of appointment in the Marc h 1961 trust ag ree ment. Acc ording ly , we f ind the Autonomy

Trust 3
rec eives the be nefits and pr otections of Te x as law, not I llinois law. ¶ 33 L ast, we note the company in Quill Corp. mailed catalog s into North Dakota, seekingbusiness there. Quill Corp. , 504 U.S. at 302. Her e, in 2006, the Autonomy Trust 3 had
- 13 -nothing in and sought noting fr om I llinois . As plaintiff notes, all of the trust's business wa s

conducte d in Texas; the trustee, protec tor, and the nonc ontinge nt benef iciary resided outside I llinois ; and none of

the trust' s proper

ty was in I llinois . Moreove r, the Autonomy Trust 3 meets none of the following fac tors that would g ive I llinois persona l jurisdiction over the trust in a litigation: "the provisions of the trust instrument, the residenc e of the trustees, the r esidenc e of its beneficia

ries, the loca

tion of the trust assets, and the loc ation wher e the business of the trust is to be conduc ted." Sullivan v. Kodsi , 359 I ll. App. 3d 1005, 1011, 836 N.E.2d 125, 131 (2005) (citing People v . First Nat ional Bank of Chicago , 364 I ll. 262, 268, 4 N.E.2d 378, 380 (1936)). Acc ording ly , we f

ind insufficient conta cts existbetwee n I llinois and the Autonomy Trust 3 to satisfy the due pr ocess c lause, a nd thus the income tax im posed on the Autonomy Trust 3 for the tax y ear 2006 was unc onstitut ional. Thus, summary judgme nt should have bee n g rante d in plaintiff' s favor . Since we ha ve found the income taxation of the Autonomy Trust 3 in 2006 violates the due pr ocess c lause, we do not addre ss plaintiff' s commerc e cla use ar g ument. ¶ 34 I I I . CONCLUSI ON ¶ 35 For

the re asons stated, we reve rse the Sang amon County circ uit court' s judgme nt and re mand the ca

use for that court to ente r an or der grantingplaintiff' s summary -judg ment motion and denying de fenda nts'. ¶ 36 Reverse d and re manded with dire ctions.

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