## I L L I N O I S 

## O F F I C I A L 

## R E P O R T S Suprem e Court

Rush University Medical Center v. Sessions , 2012 IL 112906

Caption in S upreme Court: RUSH UNIVERSI TY MEDI CAL CENTER, Appel lant, v. ROGER SESS I ONS et al.
, Trustee s, Appellee s (The People of the State of I llinois

ex re l. Lisa Madig an, Attorne y Gene ral, Interve ning A ppellant).

Docke t Nos. 112906, 112993 cons.

Filed Rehea ring denied September 20, 2012

November

26, 2012

Held (Note : Thi s sy ll abus

con st it ute s n o par t of the opi nio n of the cour t but has bee n pre

par ed by t h e Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) The common law rule that a self-se ttled spendt hrift trust is void as to exis ting and future cre ditors is not abrog ated by the Uniform Fr audulent Transf er Act embodied in the I llinois statutes, even though the common l a w r u l e t r e a t s a s f r a u d u l e n t w h a t t h e A c t c o n s i d e r s nonfraudulent—plaintiff cr editor allowe d to rea ch trust assets.

Dec ision Under Review Appea l from the Appellate Court for the First District; hear d in that court

on appeal from the Circuit Court of Cook Co u n t y , the Hon. Henry A. Budzinski and the Hon. James W. Kennedy , J udg es, pre siding.

J udg ment Appellate c ourt judg ment reve rsed. Circuit court judg ment aff irmed.
Cause re manded.Counsel on

Appea l J ames R. Hellig e, John T. Brooks, Da vid B . Goroff and Erika

A. Alley
, of F oley & L ardne r LLP, of Chicag o, for a ppellant.

Lisa Madig an, Attorney Gene ral, of Springf ield (Michae l A. Scodro, Solicitor Ge nera l, and Richard S. Huszag h, Assistant A ttorney Gene ral, of Chicag o, of counse l), for intervenor- appellant.

Edwar d T. J oy ce and J ennife r L . Doherty , of Chicag o, for a ppellees.

J ustices J USTI CE THOMAS delivere d the judg ment of the c ourt, with opinion. Chief J ustice Kilbride and J ustices Fr eeman, Garman, Karmeier, Bur ke, and The is concurr ed in the judg ment and opinion.

OP INION

¶ 1 Plaintiff, Rush Universit y M ed i ca l C en t er , fi l ed a t h re e- count complaint ag ainst def en d an ts, the trustees of two trusts that wer e cre ated by Robert W. Sessions. Plaintiff
soug ht payment of $1.5 milli on from the trusts based on a philanthropic pledg e that Sessions had made to plaintiff befor e he died. The third count of the complai n t wa s based on the

common law rule that a self-se ttled spendthrift trust is void as to exis ting and future

cre ditors. The Attorney Gene ra l o f I llinois intervene d in the dispute, taking the side of plaintiff. The circ uit c ourt of Cook County g rante d summary judgme nt in f avor of plaintiff

on count I I I
, finding that the trust cre ated by Sessions on Februar y 1, 1994, was liable to pay plaintiff $1.5 milli on. The trustees appea led, and the appellate court reve rsed the order of
summary judgme nt in favo r o f p laintiff on count I I I
, ruling that the common law cause of action alleg ed ther ein was a brog ated by the ena ctment of the U niform Fr audulent Transfer Act (740 IL CS 160/1 et seq. (West 2006)). 2011 IL App (1st) 101136. Both plaintiff and the Attorney Gene ral filed pe titions for lea ve to appe al (I ll. S. Ct. R. 315 (ef f. F eb. 26, 2010))
, which this court allowe d and consolidate d for r eview.

¶ 2 BA CKGROUND ¶ 3 The undisputed fac ts i n t h e p l ea d i n gs , ex hibits and aff idavits on file establish the following

. On Fe bruary 1, 1994, Robert W. Sessions established the “Sessions Family Trust” and provided that it was to be g overne d by the law o f t h e C ook I slands. When Sessions

cre ated this trust, he placed int o it his 99% l imited partne rshi p i n tere st in Sessions Family Partners, Ltd, a Colorado limit ed partne rship, as well as property in Hinsdale, I llinois

. At the time of his dea t h
, these assets wer e valued at more than $16.2 milli on and $2.7 milli on, respe ct ively

. Sessions was both the settlor and a lifetime benef iciary of the trust. It was

-2-furthermore irr evoca ble, and it authorized the trustee s to make distributions to Sessions of both income and principal for his “maintenance, support, education, comfort and well-be ing, pleasure
, desire and happiness.” The trust also named Sessions as the “T rust Protector,”
g iving him the abs o l u te power to appoint or remove trustees and to veto any of their discretionary actions. Sessions also had the power to appoint or chang e benef iciarie s, by will

or codicil, who would continue under the trust a fter his death. Finally
, the trust contained a spendthrift provision that prohibited any trust assets fr o m b ei ng used to pay cre ditors of Sessions or his estate. ¶ 4 Plaintiff is a charitable insti tution that operates a major teac hing and resea rc h h o s p i t al in Chicag o. I n the fall of 1995, Sessions made an irrevoc able pledg e to plaintiff of $1.5 milli on for the construction of a new president’ s house on the plaintiff’s university campus in Chicag o. Sessions then executed succe ssive codicils to his will, providing that any amount

rema ining unpaid on his $1.5 milli on pledg e as of his death would be given to plaintiff on his death. On September 30, 1996, Sessions sent plaintiff another letter stating that his pledg e

was “made in order to induce [pl aintiff] to construct a Rush University Presid enti al Residence .” This sec ond letter c onfirmed his ea rlier pledg e as f

ollows:
“I ag ree to provide in my will, living trust and other estate planning document *** that (1) this pledg e, if unfulfilled at the time of my death, shall be paid in cash upon my death as a debt and (2) that if this pledg e is unenfor cea ble for any rea son, a cash distribution shall be made under such will, living trust or other document to [pl aintiff] in an amount equal to the unpaid portion of such pledg e at the time of my death.” Sessions also stated in this second letter that his pledg e was binding upon his “estate, heirs,

succe ssors and assig ns,” except to the extent that he had paid the pledg e bef ore his death. ¶ 5 I n relianc e on Sessi o n s ’ p l ed ge, p l ai n t i ff co n s t ru cted the president’ s house on its university campus in Chica g o at a cost in e x cess of $1.5 milli on. The house has since been used as a residenc e for t h e p re s i d ent of the university and as a cente r for confe renc es and other university events. The plaintiff named the house the “Robert W. Sessions House” and held a public dedication honoring Sessions fo r h i s gener osity

. Sessions was prese nt at the dedication and cut the cer emonial ribbon, and a plaque adorning the front of the house still bear s his name. Sessions did not ma ke any payments to plaintiff during his lifetime toward the $1.5 million pl edg e. ¶ 6 I n Fe b ruar

y 2005, Sessions was diag nosed with late-stag e lung canc er

. He b l am ed plaintiff for not diag nosing the canc er sooner so that it could be treated. On Marc h 10, 2005, about six wee ks befor e he died, Sessions executed a new will revoking all previous wills and codicils. This new will made no provision for any payment to plaintiff toward his pledg e. On April 19, 2005, six day s before he died, Ses sions cre ated a second trust, the Robert W. Sessions Revoca

ble Living Trust, and transfe rre d to it his 1% g ener al partne rship interest in Sessions Family Partners, Ltd. This 1% interest was valued at $164,205. Shortly befor e his death, Sessions also made various g ifts of about $ 2 0 0
, 000, which ostensibly reduc ed the
eventua l assets of his estate. Sessions died on April 25, 2005. ¶ 7 On Dec ember 15, 2005, plaintiff filed an amende d claim, in the probate division of the

-3-circ uit court of Cook County
, ag ainst Sessions’ estate to enfor ce the $1.5 milli on pledg e. The

estate contested plaintiff’s claim, and litigation ensued. The Sessions est at e wa s found to contain less than $100,000. Thus, on April 4, 2006, in a supplemental proce eding
, plaintiff filed a three -count verifie d complaint ag ainst the trustees of the Sessions Family Trust that 1

was cre ated in 1994, seeking to rea ch the trust assets to satisfy the debt owed to plaintiff by Sessions. There afte r, plaintiff moved for summary judgme nt a g ainst the estate on its c laim in the o ri gi n al p roceeding
, and on Aug ust 31, 2006, the circ uit court g rante d summary judgme nt in favor of plaintiff. The estate appealed, and the supplemental proce eding was stay ed pending the outcome of the appea l. On Dec ember 3, 2007, the appellate court, in a summary order , aff irmed the summary judgme nt in favor of pl aintiff in the estate’s appe al ( In re Estate of Sessio n s , No. 1-07-0202 (2007) (unpublished order under Supreme Court Rule 23)). ¶ 8 The litigation then resumed in plaintiff’s supplemental proce eding ag ainst the trustees. At some point, the Attorney Gene ral intervene d in the di s p ute, filing a joinder in the plaintiff’s plea dings. ¶ 9 Count I I I of plai n t i ff ’s co m p l aint ag ainst the trustees is the only count at issue in this
appea l. That count relied upon the principle that if a settlor cre ates a spendthrift trust for his

2

own benef

i t , i t i s v o id as to exis ting or future cre ditors and such cre ditors can rea ch the settlor’s interest under the trust. Plaintiff alleg ed that as a cre ditor, it should be able to rea ch the assets of the trusts created by Sessions to satis fy

its $1.5 mi llion claim. ¶ 10 The circ uit court enter ed summary judgme nt in plaintiff’s favor on count I II
, finding that the Sessions Family Trust dated Fe bruar y 1, 1994, wa s v o i d as to plaintiff’s $1.5 milli on judgme nt a g ainst Sessions’ estate and that the trust is li able f or pay ment to plaintiff on the pledg e. The c ourt also made an express written finding pursuant to I llinois Supreme Court Rule 304(a) (ef

f. J an. 1, 2006) that there was n o j ust rea son for delay ing enforceme nt or appea l or both of its order. ¶ 11 The trustees appea led, arg uing that the common law principle relied up o n b y p laintiff “wa s supplanted by the Fr audulent Tran s fe r Act [citation]
, which provides specific mechanisms for proving a transfe r by a debtor was fraudulent.” 2011 IL App (1st) 101136, ¶ 29. The appellate court ag ree d and reve rsed the circ uit court’s entry of summary judgme nt in favor of plaintiff. Id. ¶¶ 31, 35. In so doing, the appellate court first acknow ledg ed I llinois

case law, including In re Marriage of Chapman
, 297 I ll. App. 3d 611, 620 (1998), and Crane v. Illinois Merchants Trust Co. , 238 I ll. App. 257 ( 1925), that holds that a trust cr eate d for the settlor’s benef

it is “void” with respect to the settlor’s cre ditors, who may satisfy their claims out of the trust’s assets. Id. ¶ 28. The appellate court held, howeve r, that the common

Pla int if f was la te r al lowe d to fi le a fou rt h cou nt agains t the tr ust ees unde r a st at uto ry fr aud 1 the ory.

Count s I and I V al le ged tha t a s s e t t r a n s f er s by Ses si ons to the tr ust s sho uld be set asi de 2 unde r sec ti on 5 of the Fra udul ent T ra nsf er Act (74 0 I LCS 160/ 5 (W est 2006 ))

. Count I I al le ged tha t the tr ust s cr eat ed by Ses si ons wer e con tr act ual ly boun d by the $1.5 mil li on ple dge, as the y wer e one of Ses si ons ’ “ suc ces sor s a nd a ssi gns.”

-4-law rule, as expressed in case s such as Chapman and Crane
, could not exis t in harmony with

the Fr audulent Transfer

Act. Id. ¶ 31. ¶ 12 Both plaintiff and the Attorney Gene ral filed pe titions for leave to a ppeal (I ll. S. C t. R. 315 (ef f. F eb. 26, 2010)) , which weallowed and consolidated for revie w.

¶ 13 ANALYSI S ¶ 14 Be fore this court, both plaintiff and the Attorney Gene ral rely upon the common law rule that a person cannot settle his estate in trust for his own benef it so as to be fre e from liability for his debts. They contend that this common law trust rule and the Fr audulent Transf er Act
operate in differ ent sphere s, and thus can e x ist in harmony with one another . Acc ording ly
, they arg ue that the a

ppellate c ourt err ed in re versing the circ uit c ourt’s summary judgme nt order in favor of

plaintiff on count I I I

. ¶ 15 Summary judgme nt is proper when the pleading s, depositions, admissions and af fidavits on file demonstrate that no g enuine issue of m aterial fac t exi sts, and that the moving pa rty is entitled to judgment as a matter of law . 735 IL CS 5/ 2-1005(c ) (West 2006); Millennium Park Joint Venture, LLC v. Houlihan
, 241 I ll. 2d 281, 308-09 (2010). When an appea l befor e this court arises as a result of t he appellate court’s reve rsal of a trial court’ s order g ranting
summary judgme nt, this court’s revie w is de novo

. Thompson v. Gordon
, 241 I ll. 2d 428, 439 (2011). ¶ 16 W e b egi n o u r analy sis by noting the following well-settled principles t h at go v er n leg islative abrog ation of a common law rule. Common law rig hts and reme dies rema in in full forc e in this state unless expressly repe aled by the leg islature or modified by court decision. Millennium Park Joint Venture
, 241 I ll. 2d at 305. Any leg is l at i v e i n t ent to abrog ate the

common law must be plainly and clea rly stated, and such intent will not be presumed from ambig uous or questionable la ng uag e. Maksimov ic v. Tsogalis , 177 I ll. 2d 511, 518 (1997). Thus, I llinois courts have limit ed all manner of statutes in derog ation of the common law to their ex press langua g e, in order to eff ect the least—rather than the m os t—alteration in the

common law. Adams v. Northern Illinois Gas Co.
, 211 I ll. 2d 32, 69 (2004) (col l ec t ing

case s). ¶ 17 The implied repe al of the common law is not and has never been favor ed. See People v

. Spann
, 20 I ll. 2d 338, 341 (1960); People ex rel. Nelson v. W est Englewood Trust & Savings Bank
, 353 I ll. 451, 460 (1933). Thus, a statute that does not expressly abrog ate the common law will be deeme d to have done so only if that is what is “nec essarily implied from what is expressed.” Acme Fireworks Corp. v. Bibb
, 6 I ll. 2d 112, 119 (1955). But in such case s, there
must be an “irre concilable repug nancy ” betwee n the statute and the common law rig ht such that both cannot be car

ried into eff

ect. W est Englewood
, 353 I ll. at 460. Where the common law rule in question provides g reater prote ction than t he st atute at issue, but the rule is not inconsistent with the g ener al p u rpose of the statute, “it is better to say that the law was intended to supplement or add to the security furnished by the rule of the common law rathe r than to say that it is repug nant to that rule.” W est Englewoo d
, 3 5 3 I ll. at 461. Moreove r, wher e a reme dy is g iven by statute and there are no neg ative words or provisions rende ring it exclusive, “it will be deeme d to be cumulative only and not to take away prior reme dies.”

-5-Nottage v. Je ka , 172 I ll. 2d 386, 392-93 (1996).

¶ 18 It is undisputed that the Fr audulent Transf er Act does not co n t ai n an y p ro v ision that purports to expressly abrog ate any portion of the common law. Quite to the contra ry , section 11 of the Act contains a provision expressing a clea r intent to p re s erve common law

reme dies: “Unless displaced by the provisions of this Act, the principles of law and equity
, i n cl u d i n g *** the law relating to *** fraud *** supplement its provisions.” (Emphasi s added.) 740 IL CS 160/11 (West 2006). T he only question here
, then, is whether there is a clea r in co n s i s t ency betwee n the two laws so that both cannot be car ried into eff

ect. Furthermore
, it is not enoug h to justify the infere nce of abrog ation from the simple fac t that

a subsequent statute cover s some, or even all, of the questions cover ed by the common law; there “must be an irr econc ilable re pug nancy .” W est Englewood , 353 I ll. at 460. ¶ 19 Our rea ding of the Fr audulent Transf er Act and the common law rule at issue reve als no such irrec oncilable inconsistency

. Section 5(a) of the Act sets for t h i n rele vant part a statutory cause of ac tion for a f

raudule nt transfe r as f

ollows: “(a ) A transfe r made or obligation incurre d by a debtor is fraudulent as to a cre ditor, whether the cre ditor’s claim arose befor e or afte r the transfe r was made or the obligation was incurr ed, if the de btor made the transfe r or incur red the obligation: (1) with ac tual intent to hinder, delay , or def raud any cre ditor of the debtor ; or (2) without r ece iving a rea sonably equivalent value in exchang e for the transfe r or oblig ation, and the de btor: (A) was eng ag ed or was about to eng ag e in a business or a transac tion for which the remaining assets of the debtor wer e unrea sonably small in relation to the business
or transa ction; or (B ) intended to incur, or believed or rea sonably should have believed that he would incur, de bts bey ond his ability to pay as they came due.” 740 I

L CS 160/ 5(a) (West 2006).
It has been stated that the g ener al purpose of the Ac t is “to protec t a debtor’s unsecur ed

cre ditors from unfai r re d uctions in the debtor’s estate to which cre ditors usually look to

security .” In re Randy , 189 B.R. 425 (B ankr. N .D. I ll. 1995). ¶ 20 The common law rule also has a g ener al purpose of protec ting cre ditors, but it a ddresse s the specific situation wher e an interest is reta ined in a self-se ttled trust with a spendthrift provision. “Tra ditional law is that if a settlor cre ates a trust for the settlor’s own benef it and inserts a spendthrift clause
, the clause is void as to the then-e x isting and future cre ditors, and

cre ditors can rea ch the settlor’s interest under the trust.” Helene S. Shapo et al
., Bog ert’s 3

T his rul e has a 500-y ear li nea ge (s ee Erwi n N. Gri swol d, S p e ndt hri ft Trus ts Crea te d in 3 W hol e or in Part for the Bene fi t of the Set tl or , 44 Har v. L. Rev. 203, 204 (19 30) (c it ing 3 Hen. V I I
, c. 4))
, has bee n con si st ent ly app li ed as the la w in I ll ino is for over 140 years (s ee, e.g. , Guff in v. First Nati onal Bank of Mo rri son , 74 I ll . 259 (1 874) ; Cran e , 238 I ll . App. 257 (19 25) ; In re Mo rri s , 151 B.R. 900 (C.D. I ll

. 1993 ); In re Ma rri age of Chapma n , 297 I ll

. App. 3d 611 (19 98) ; Dexi a Cre dit Loca l v. Roga n , 624 F. Supp

. 2d 970, 976 (N.D. I ll

. 2009 ))
, at le ast unt il the ins ta nt app el la te cou rt ’s dec is ion
, and re m ai ns the la w in the vast m aj ori ty of st at es thr o u gh o u t the nat ion (s ee Hel ene S.

-6-Trusts and Trustee s § 223, at 424-67 (3d ed. 2007). And the rule is “applica ble althoug h the transfe r i s not a fraudulent convey ance*** and it is immaterial t hat t he settl or-be nefic iary had no intention to defr aud his cre ditors.” Restatement (Second) of Trusts § 156 cmt. a (1959). ¶ 21 We believe that the common law rule supplements the statute in a consistent manner and that the appellate court there fore err ed in holding to the contra ry

. Def endants do not maintain that the common law rule reg arding self-se ttled spendthrift trust provisions af fi rmatively interfe res with the operation of the Uniform Fr audulent Transf er Act by impeding in a g iven

case the determination of whether the Act’s require ments for decla ring a transfe r fraudulent have been met. Def

endants instead claim that the common law rule is inconsistent with the Act in an indirect way

. Specifica lly
, they contend that the common law treats as fraudulent
per se what the Ac t considers nonfr audulent, and the ref ore, thetwo cannot c oexis t. ¶ 22 We find defe ndants’ contention unpersu as i v e. T h e co mmon law and the statute are supplementary
, not contra dictory

. Both laws have a g ener al purpose of protec ting cre ditors. But the common law focuse s on the additional matter of the interest retained by the settlor of a specific kind of trust, and not simply the fra udulent transfer of an asset or the fraudulent incurring of a debt, as does the statute. Additionally
, the Act and the common law rule eac h
operate in some circ umstances wher e the other does not, thus neg ating any infere nce that the common law rule would rende r the Ac t superfluous. The Act is eff ective, but the common law rule is not, in a much larg er sphe re, w hich includes both si tuations that do not involve
trusts and in connec tion with transfe rs into trusts that are not for the settlor’s benef it beca use they permit distributions onl y to other per sons. ¶ 23 The appellate court found that “[i] f the leg islature intended self-se ttled tr usts to re main
per se fraudulent under the common law, it would not have promulg ated a statute defining the conditions require d to prove a transfe r was fra udulent.” 2011 IL App (1st) 101136, ¶ 31. The problem with the appellate court’s rea soning is twofold. First, section 1 1 o f t h e Act specific ally states that the common law “re lating to *** fraud *** supplement[s] [t he Act’s] provisions” absent a clea

r intent of displaceme nt by its provisions. 740 IL CS 160/11 (West 2006). Neither the ca s e law nor plaintiff’s complaint uses the term “fr audulent per se ” to describe self-se ttled spendthrift trusts. But to the extent that the term “fr audulent per se ” can 4 be acc urate ly applied here
, the proviso in section 11 indicates that any common law rule with
respe ct to fraud should be rea d as supplementing the Act. We also do not find any displaceme nt of the common law r ule by the l ang uag e in section 5 of the A ct, as it is not a fraudulent transfer of funds that rende rs the trust void as to cre ditors under the common law,

Shap o et al
., Bogert ’s T rus ts and T rus te es § 223 (3d ed. 2007 ); Rest at ement (T hir d) of T rus ts § 58 cmt. e ( 2003 ))

. Cf. Cran e v. Il li noi s Me rch ant s Trus t Co.
, 238 I ll

. App. 257, 263 (19 25) (t he cou rt des cr ibe d 4

a con vey anc e int o a sel f- set tl ed tr ust as a con ti nui ng “ ‘f ra ud on cr edi tor s whet her so int end ed or not ’ ” (qu oti ng Mc Key v. Coch ran , 262 I ll

. 376, 384-85 (19 14) ))

. We bel ie ve it m ore acc ura te to say t h a t t h e c o mm on la w rul e ope ra te s ir re spe ct ive of fr aud

. I n oth er word s, it re cognizes tha t t h e

cr eat ion of

suc h a tr ustca n be m ade wit hout any fr aud ule nt int ent

.
-7-but rathe r it is the spendthrift provision in the self-se ttled trust and the settlor’s retention of

the bene fits that rende rs the trust void as to cre ditors. ¶ 24 Second, it could be said that the policy behind the common law rule is not limit ed solely
to deter ring fraud, as i t preve nts the di stinct injusti ce of allowing a per son to use a trust as

a vehicle to park hi s as s ets in a way that prese rves his own ability to benef it from those assets, while keeping them outside the rea ch of his prese nt and future cre ditors. I f the law

wer e otherwise, “it would make it possible for a person fre e from debt to place his property bey ond t he rea ch of cre ditors, and secur e to himself a comforta ble support during life, without reg ard to his subsequent business venture s, contra cts, or losses.” Schenc k v. Barnes
, 50 N.E. 967, 968 (N.Y. 1898). It is not possible that the leg islature would have intended such a monumental shift in the law without clea r, spec ific leg islation to t hat ef fec t. 5 ¶ 25 The appellate court conclude d that count I I I could not survive beca use it did not alleg e, consistent with section 5 of the Fraudulent Transf er Act, “that decede nt made a transfe r to the trusts ‘with actua l intent to hinder, delay
, or defr aud’ ” plaintiff. 2011 IL Ap p (1 st) 101136, ¶ 32 (quoting 740 IL CS 160/5(a)( 1) (West 2006)). I ronica lly
, the ver y s t at u t ory lang uag e that the appellate court quotes and finds inconsistent with the common law rule has itse lf coexisted in complete harmony with the common law trust rule for centuries. Our state’s law on fraudulent convey ance s, like that of m any jurisdictions in t he United States,
trac es back to the Statute of 13 Eliz abeth, e nacte d in the six teenth ce ntury , which decla red invalid “ ‘covinous and fraudulent’ transfe rs desig ned to ‘delay , hinder or defr aud cre ditors and others.’ ” BFP v. Resolution Trust Corp.
, 511 U.S. 531, 540-41 (1994) (quoting 13 Eliz
., c. 5 (1570))

. That statute itself codified the common law. Campbell v. W hitson
, 68 I ll. 240, 243 (1873). Shortly afte r I llinois became a state, our leg islature first codified the substance of the common law that invalidates fraudulent convey ance s (1819 I ll. L aws 15, § 2). It then condense d it into section 4 of the 18 7 4 Act to revise the law in relation to frauds and perjurie s (I ll. Rev. Stat. 1874, ch. 59, § 4). That law rema ined in eff ect until J anuary 1, 1990 (s ee I l l

. Rev. Stat. 1989, ch. 59, ¶ 4), when the leg islature repe aled it and enact ed t h e Uniform Fr audulent Transf er Act. See Pub. Act 86-814, § 13 (ef f. J an. 1, 1990) (adding 740 IL CS 160/5 and re p ea l i n g I l l

. Rev. Stat. 1987, ch. 59, ¶ 4). Thus, I llinois statutory law for well over 100 y ear s befor e 1990 provided in relev an t p ar t t h at “[e]very *** transfe r *** made with the intent to disturb, delay
, hinder or defr aud cre ditors *** shall be void as ag ainst such cre ditors.” See I ll. Rev. Stat. 1987, ch. 59, ¶ 4; I ll. Rev. Stat. 1874, ch. 5 9
, § 4. Simi larly
, from 1990 to the prese nt, the Uniform Fr audulent Transf er Act has rea d in rele vant part that “[a] transfe r made *** by a debtor is fr au d u l ent as to a cre ditor *** if the debtor made the transfe r *** with actua l intent to hinder, delay
, or defr aud any cre ditor of the debtor.” 740 IL CS 160/5(a)( 1) (West 2006). Given the longstan d ing coexistence of the

common law trust rule and the statutory provisions ag ainst fraudulent convey ance s that have

See Rest at ement (T hir d) of T rus ts § 60, Repo rt er ’s Note s on cmt. f (20 03) (no ti ng tha t 5 Ala ska and Del awar e, m oti vated i n p a r t b y a des ir e to at tr act tr ust bus ine ss oth er wis e fl owin g to off sho re j u r i sdi ct ion s, have ado pte d spe ci fi c st at ute s per mit ti ng the cr eat ion of “as set pro te ct ion
t r ust s” int o whic h a per son m ay pla ce ass et s for his own ben ef it fr ee fr om the cl ai m s of fut u r e

cr edi tor s)

.
-8-rema ined essentially consistent in terms of the rele vant lang uag e, we do not believe that the

leg islature intended to abrog ate the common law rule by impl i ca t i o n when it enac ted the Uniform Fraudule nt Transfe r Ac t. ¶ 26 Further support for our conclusion that the leg islature intended to p re serve rathe r than abrog ate the common law rule with respe ct to self-se ttled spendthri ft trusts is found in section 2-1403 of the Code of Civil Procedur e (735 I L C S 5/2-1403 (West 2010)). That section provides for a g ener al exclusi on from postjudgment execution on property held in
trust for the judgme nt debtor, but it expressly limit s that exclusion to trusts that are not selfsettled. See 735 IL CS 5/2-1403 (West 2010) (“No court *** shall order the satisfac tion of

a judgme nt out of any property held in trust for the judgme nt debtor if such trust has, in g ood faith, been cre ated by
, or t he fund so held i n trust has proceede d from, a person other than the judgme nt debtor.” ). The clea r corollary is that I llinois law allows execution by a cre ditor
ag ainst assets held in a self-se ttled tr ust and that the Gene ral Assembly there by intended to prese rve the common law trust rule. W e al s o n o t e t hat during nearly all of t he many y ear s that I llinois h as had a fraudulent convey ance statute, it has also had a statute like curr ent section 2-1403 of the Code that specific ally withholds any protec tion from executi o n on assets held in trust for a judgme nt debtor who cre ated or funded the trust. See 735 IL CS 5/2- 1403 (West 2010); I ll. R ev

. Stat. 1983, ch. 110, ¶ 2-1403; I ll. Rev. Stat. 1977, ch. 110, ¶ 399; I ll. Rev. Stat. 1975, ch. 22, ¶ 49; 1871 I ll. L aws 339 (§ 49); 1845 I ll. L aws 97 (§ 36); In re Marriage of Dege ner , 119 I ll. App. 3d 1079, 1083 n.1 (1983). Yet, section 2-1403 and its prede cessor s have exis ted harmoniously alo n g s id e th e Ill in o is s ta tu te s d ire c te d specific ally
at fraudulent convey ance s without a hint of any inconsistency betwee n them for more than

a century

. Nothing in the lang uag e of the Uniform Fr audulent Transf er Act convince s us that the leg islature intended to c hang e the status quo. ¶ 27 I n an alternative arg ument of sorts, defe ndants arg ue that the common law rule does not

come into play beca

use plaintiff did not become a judgme nt cre ditor in relation to Sessions befor e he di ed

. Def

endants claim that the common law rule reg arding self-se ttled trusts applies only to the settlor’s “lifetime interest” so that once the settlor dies, the rule does not permit a cre ditor to r eac h any trust a ssets that could have been, but w ere not, distributed to the settlor during his life. Citi ng section 156 of the Restatement (Second) o f T ru s ts, defe ndants further contend that the common law rule operates only to neg ate the eff ect of the spendthrift clause and not the e ntire trust. ¶ 28 Def

endants’ a

rg ument misapplies the leg al principles it cites t o the facts of the pre sent

case

. We note that case s addre ssing simil ar arg uments have held that the settlor’s “intere st” in a self-se ttled trust that his cre ditors may rea ch includes all income and principal that could have been distributed to the settlor, even when the trustee exercises complete discretion over such distributions

. See Restatement (Second) of Trusts § 156(2) (1959); Restatement (Third) of Trusts § 60 cmt. f (2003). This must be distinguished from an interest that cre ditors may not r eac h: w here assets contributed by the settlor are irrevoc ably deede d to the trust for the benef it of other be nefic iaries, suc h as whe re inc ome from the tr ust is pay able to the s ettlor but principal may be dis tributed only to desig nated r emaindermen af ter the se ttlor’s death, in which ca se the settlor’s “ interest” inc ludes only the t rust income, and the trust principal is not subject to c laims by the settlor’s cre ditors. See In re Brown
, 303 F.3d 1261, 1268-69

-9-(11th Cir. 2002); Restatement (Third) of Trusts § 5 8 cm t. e (2003). The latter situation is

clea rly not present here, a s the trust provisions ga ve the trustee s (who could be repla ced at will by the settlor and whose every materia l action was subject to the v et o p o we r of the settlor as “protector” of t he trust) the power to distribute both principal and income to t he settlor, in unlimit ed amounts, for his “maintenance, support, education, comfort, well-be ing, pleasure , desire or

happiness.” ¶ 29 Def

endants rely chief

ly on Gree nwich Trust Co. v. Tyson
, 27 A.2d 166 (Conn. 1942), to support their g ener al claim that once a debtor dies, his cre ditor’s no longe r have any interest that can be rea ched in the debtor’s self-se ttled trust. But that case is distinguishable and does 6
not support defe ndants’ position. Unlike t h e assets in the prese nt case (which the trustees

wer e fre e to distribute to Sessions), t h e p ri ncipal share subject to the rele vant holding in Gree nwich was not distributable to the settlor unless he lived for 20 more y ear s afte r the trust

was cre ated, which he di d n o t , and the trust further prohibited any alteration of that restric tion. See id. at 170. The c ourt found t he si tuation to be one “whe re the settlor of t he trust, after

rese rving to himself the income for life, create s vested indef easible inter ests, to take eff ect at his death.” Id. at 173. Her e, in contra st, Sessions’ interest extended to the entire trust, both principal and income. As n o t ed above, all of the rele vant authority uniformly reje cts defe ndants’ position under the c ircumstance s prese nted her e. ¶ 30 We also find unpersua sive defe ndants’ position that cre ditor’s rig hts under the common law do not e x tend to the assets that the trustees could have distributed to the settlor but did
not distribute to him befor e he died. There is no conce ptual differ ence—with respe ct to trust assets distributable to the settlor—betwee n allowing the settlor to fav o r h i m s elf over his

cre ditors and allowing him to favor his relatives and other heirs over his cre ditors. J ust as the

common law keeps the settlor from reta ining t h e b en ef i t of his assets while keeping them bey ond his cre ditors’ rea ch, it also require s the settlor to be “ ‘just befor e he is g ener ous.’ ” In r e Es t a te of Kovalyshyn
, 343 A.2d 852, 859 (N.J., Hudson County Ct. 1975) (quoting Merc hants’ & Miners’ Transp. C o. v. Borland
, 31 A. 272, 274 (N.J. Ch. 1895)); see also 2 Wil liam Bla ckstone, Commentaries *512. Thus, we believe that if the settlor’s interest in a

s el f- s et t l ed trust is “void” as to the s ettlor’s creditors, t here is no sound rea son to treat th e

cre ditors’ rig hts as suddenly defe ated the moment the settlor dies, there by gi v i ng the

commensurate economic benef it to the settlor’s heirs. All of the rele vant prec edent that we have examined seems to support our conclusion. See, e.g. , In re Morris
, 151 B.R. 900, 906-

D e f e n d ant s al so re ly on dic ta in In re Hall
, 22 B.R. 942, 944 (Ba nkr. M.D. Fla

. 1 9 8 2 )
, 6 whic h quot es, and use s out of con te xt, the fol lowi ng unr emarkabl e p r opos it ion fr om Bogert ’s
tr eat i s e : “ If t h e set tl or cr eat es a tr ust for the set tl or for li fe
, wit h a re st ra int on volunt ar y or invol unt ar y al ie nat ion of thi s int er est , and wit h a re m ai nde r in oth er s at his dea th, his cr edi tor s can

re ach his li fe int er est , but not the re m ai nde r.” Hel ene S. Shap o et al
., Bogert ’s T rus ts and T rus te es § 223 (3d ed. 2007 ). Def

end ant s con fus e a “l if

e est at e,” whic h is the ri ght to the use and inc ome of
pro per ty dur ing a p er son ’s li fe (s ee Kei sl ing v. White , 411 I ll . 493 , 502 (1 952) ), wi th dis tr ibu ti ons dur ing the li fe of a tr ust ben ef ic ia ry to whom the tr ust ee cou ld dis tr ibu te bot h inc om e and pri nci pal (s ee Rest at ement (Sec ond) of T rus ts § 156(2 ) (195 9))

. Hall is al so not on poi nt bec aus e the debt or sha re d a coi nte re st in th e pr ope rt y that was or igina ll y deede d t o t he c ose tt le d t rus t.

-10-07 (C.D. I ll. 1993); Johnson v. Commercial Bank
, 588 P.2d 1096, 1100 (Or. 1978); Deposit

Guaranty National Bank v. W alter E. Heller & Co.
, 204 So. 2d 856, 862 (Miss. 1967); Nolan

v. Nolan
, 67 A. 52, 53 (Pa. 1907); see also In re Estate of Nagel
, 580 N.W.2d 810, 812 (I owa 1998); State Street Bank & Trust Co. v. Reiser
, 389 N.E.2d 7 6 8
, 7 7 1 -72 (Mass. App. Ct. 1979); Gree nwich Trust

Co. v. Tyson , 27 A.2d 166 (Conn. 1942). 7 ¶ 31 I n Mo r r is
, a bank became a judgme nt debtor of Doris Morris in 1987. In 1988, Doris

rec eived $80,000 in income she used to put in an irrevoc able spendthrift trust wher e she was benef iciary
, t h e trustee had discretion to pay her unlimit ed amounts of principal, and the

rema ining interest in the trust was to pass to Doris’s heirs afte r her d ea t h

. Do ri s filed bankruptc y in 1989, and then died one y ear later while that proce eding was still pending

. Doris’s heirs arg ued that the bankruptc y trustee could not “ compel turnover of funds when the debtor has no prese nt rig ht to the funds *** [b] eca use Debtor died afte r she filed for bankruptc y .” Morris
, 151 B.R. at 906. The fede ral district court reje cted that arg ument and found as f ollows: “[The heirs’] arg ument *** ignor es the principle that if a settlor cre ates a spendthrift
trust for her own benef

it, it is void as to exis ting or future cre ditors, and they can

rea ch her interests under the trust. [C itation.] Additionally
, in the trust in the case at bar, the trustee had discreti o n t o pay Debtor such amounts from the principal as

nece ssary to maintain Debtor’ s standard of living. Bec ause the trustee was entitled
to apply the entire corpus for the support of Debtor, the entire corpus was subject to the claims of cre ditors. [ Citations.] See Farmers State Bank v. Janish
, 410 N.W.2d 188 (S.D. 1987) (Where a settlor is the benef i ci ar y o f the spendthrift trust, the spendthrift provision is ineffe ctive ag ainst cre ditors who may rea ch the trust funds.). Thus, not only may Debtor’ s interest in the trust be rea ched, but also the interest [of the heir who rec eiv ed t h e re maining principle balanc e under the terms of the trust afte r Doris’s de ath].” Id. at 906-07. ¶ 32 We find Morris to be almost exactly on point with the prese nt case

. The only differ ence is that the cre ditor in Morris became a judgme nt cre ditor prior to the settlor’s death, but here
, plaintiff did not o b t ai n a judgme nt until afte r the settlor’s death. Def endants arg ue that beca use no judgme nt was obtained while the settlor was alive and his pledg e was not actua lly due until his death, plaintiff was not a “cr editor” for purposes of the common law rule. We disag ree with both aspects of de fendants’ arg ument. ¶ 33 The common law rule is clea rly not limit ed only to claims broug h t aga i n s t a t rust by

cre ditors who wer e “judg ment cre ditors” of the settlor during his lifetime. See Johnson
, 588 P.2d at 1100; Deposit Guaranty
, 204 So. 2d at 862. I n John s o n , the Supreme Court of Ore g on decide d a case wher e the settlor died befor e the cre ditor, a nurse, broug ht sui t for

T her e is a dea rt h of I ll ino is cas e la w exa mini ng the que st ion of how the comm on la w tr ust 7 rul e app li es wit h re spe ct to a cr edi tor ’s ri ght to col le ct fr om tr ust ass et s wher e the set tl or/ deb tor die s bef or e a j udgm ent re cognizin g the deb t occ urs

. T he non-I ll ino is cas es ci te d her e wer e ei the r dis cus sed by the par ti es in the ir bri ef s ( Mo rri s , Joh nso n and Depos it Guarant y ) or wer e unc overed by our o wn r ese ar ch ( Nola n , Nage l and Rei ser ).

-11-payment on the home car e she had rende red. The court first noted that althoug h the trust was

void a s ag ainst the settlor’s cre ditors only to the extent of his inter est, his interest extended to the entire trust and so plaintiff, a c reditor, c ould rea ch all the assets that he place d in the
trust. Johnson
, 5 8 8 P.2d at 1100. The court then addre ssed defe ndants’ arg ument that plaintiff should lose beca

use she broug ht suit afte r the settlor died and the rema inders of the trust had vested. Thecourt he ld that “cr editors may rea ch such assets even afte r t he settl or dies” beca

use the place ment of the funds into the trust is void as ag ainst exis ting and future

cre ditors, and it is as if place ment into the trust never oc curr ed. Id. at 1100. ¶ 34 I n Deposit Guaranty
, the settlor also died befor e t h e j u d gm en t creditor came into exis tence , and the suit to rea ch trust assets was filed afte r the sett l o r’ s d ea t h

. Deposit Guaranty
, 204 So. 2d at 859. The Supreme Court of Mississ ippi held that a cre ditor’s claim
ag ainst the trust property is not defe ated mere ly by the death of the debtor, and althoug h the
trust ag ree ment is still g ood as far as the parties mentioned in it, the rema inderman will take subject t o the claim of t h e cr edit or, and payment of such claim from the assets of t he trust will be enfor ced. Id. at 862-63. The court noted that if the rule wer e otherwise, “it would be possible for any one to cre ate a trust for his benef it, in which he reta ined the rig ht to rec eive and use all income during his life, with rema inder to another at the moment of death, fr ee from claims of cre ditors, and then keep larg e cre dit acc ounts run n i ng and die leaving his debts unpaid, thus cheating his cr editors.” Id. at 862. ¶ 35 Nor is the common law rule limit ed to claims that wer e act i o n ab l e o n l y d u ri ng the lifetime of the settlor as opposed to those acc ruing at the time of the death of the settlor. I n Nagel
, the I owa Supreme Court a ddresse d a situation whe re the two settlors of a trust wer e simult aneously killed in an acc ident that prec ipitate d a t o rt s u i t broug ht by the estate of a third person that was al s o killed in the acc ident. Nagel
, 580 N.W.2d at 811. The main question prese nted was whether the trusts’ assets could be rea ched by the tort plaintiff even though the settlors’ deaths rende red the trusts irrevoc able. Id. I n determining that the assets could be rea ched, the court reje cted the defe ndant’s contention that the debt must have arisen during the settlors’ lifetimes in order for the assets to be rea ched. Id. at 812. The court noted that even though the tort claim was not reduc ed to judgme nt befor e the settlors deaths, “the fac ts precipitating it occurr ed during their lifetimes.” Id. ¶ 36 Turning t o t h e ca s e b efore us, we find that Sessions was clearly a “debtor” of plaintiff during his lifetime and plaintiff in turn was clea rly a “cr editor” of plaintiff as those terms are

co m m o n l y u n derstood. A “debtor ” is simply define d as “[o] ne who owes an obligation to another
, esp. an obligation to pay money .” Bla ck’s L aw Dictionary 433 (8th ed. 2 0 0 4 ). A “cr editor” is “[o] ne to whom a debt is owed.” Bla ck’s L aw Dictionary 396 (8th ed. 2004). T h er e is no question that Sessions incurre d an obli g ation to pay plaintiff m oney , even if i t

was to be paid at the latest upon his death as a debt. Moreove r, we note that, at the very least, the fac ts prec ipitating plaintiff’s claim occur red during the lifetime of Sessions, and plaintiff could there fore rec over ag ainst the trust assets. See Nagel
, 580 N.W.2d at 81 2

. S es s i o n s clea rl y i n curr ed the obligation to plaintiff during his lifetime and we have no trouble concluding that plaintiff was a cre ditor for purpose s of the common law tr ust rule invoked in this case.

-12-¶ 37 CONCLUSI ON

¶ 38 For the fo re go i n g re as ons, we hold that the Uniform Fr audulent Transf er Act did not displace or abrog ate the common law trust rule with respe ct to self-se ttled trusts. We also conclude that under the undisputed fac ts of this case, plaintiff w as a “cr editor” of Sessions for purposes of the common law rule. Acc ording ly
, we reve rse the judgme nt of the appellate court, affirm the judgment of the circ uit court, and re mand the ca use to the circ uit court of Cook Countyfor f

urther pr ocee dings c onsistent with thi s opinion.

¶ 39 Appellate c ourt judg ment reve rsed. ¶ 40 Circuit court judg ment aff irmed. ¶ 41 Cause re manded.

-13-