Davis Trust

William Davis

By SAMANTHA PIDDE

The City of Mount Carroll has begun discussing how to obtain and use its portion of a nearly $20 million trust, set up more than 50 years ago by the late William J. Davis.

Davis died April 26, 1967, with his will establishing a trust with several organizations as beneficiaries. The trust was made in such a way that three of his relatives — first cousins Clarence Davis, Herbert Davis and Helen Grace Davis Marth) received annual payments while designated beneficiaries would not receive funds until all three of the individuals had. The last of these three individuals, Herbert Davis, died in September at the age of 98.

Trust documents list six beneficiaries to receive certain percentages of the whole trust. The list includes:

City of Mount Carroll, 50 percent; Shimer College in Mount Carroll, 30 percent; Illinois Masonic Home in Sullivan, 7 percent; Illinois Masonic Children’s Home in LaGrange, 6 percent; Mount Carroll Fire Protection District, 5 percent; Mount Carroll Masonic Cyrus Lodge #118, 2 percent.

Regarding the City of Mount Carroll as a beneficiary, the Davis Trust document states:

"FIFTY PERCENT (50%) thereof shall be paid to the CITY OF MT. CARROLL, ILLINOIS, to be used by said City in the erection and equipping of a Community Building for the use and enjoyment of the inhabitants of the City of Mt. Carroll, Illinois, said building to be called the WILLIAM DAVIS COMMUNITY BUILDING, and the plans and specification for said building and its equipment are to be first approved by the person acting as the Trustee at the time of the termination of this Trust; and any funds remaining after the erection and equipping of said building are to be invested by the said City of Mt. Carroll, Illinois, and the income from such investment used for the maintenance and up-keep of such building."

During the Tuesday, Nov. 12, Mount Carroll City Council meeting, city attorney Ron Coplan discussed a letter from Davis Trust Attorney Edward Mitchell regarding the trust and the death of Herbert Davis. The letter was sent out to representatives from listed beneficiaries, as well as the trustees, informing them of the death of Herbert Davis and what actions the trustees plan to take.

"The trustees also are reviewing the original will that created the trust as to the next step,” Mitchell wrote. “As you know, this trust has been administered by the Circuit Court so any action we take to close out the trust will need to have court approval. We will be filing a pleading in the near future making the court aware of the situation so that we can arrange for a final distribution."

Coplan, Mayor Carl Bates and Ald. Mike Risko all spoke about what happens if any of the beneficiaries are no longer in existence. Coplan and Risko indicated that both the Illinois Masonic Home in Sullivan and the Illinois Masonic Children's Home in LaGrange may no longer be in business.

The trust states that in such a case, any money designated for an entity that is no longer around would be "divided ratably" between the other beneficiaries.

The main concern from Risko and the rest of the council was what will happen to the 30 percent portion for Shimer College. The trust specifically lists the beneficiary as "SHIMER COLLEGE, a non-profit educational corporation, having its campus and principal buildings in the City of Mt. Carroll, Illinois."

While Shimer College is no longer operating on the Mount Carroll campus, North Central College has taken assumed the Shimer College Great Books program and name. Coplan said he was uncertain if this was enough for the college to qualify for the Davis Trust funds, but expected the college to try for them.

"When there's a lot of money, there's always going to be an argument," Bates said.

Coplan said he would expect Davis Trust trustees Sheldon Frank and Bob Watson as well as Mitchell to be "pro-active" and file a case in Carroll County Circuit Court. He said the trustees should take a neutral position and simply ask a judge to decide which beneficiaries are still eligible to receive funds from the trust.

Coplan said it was his opinion that the burden would be on representatives from North Central College to prove first, that they have legal standing to represent Shimer College and second, that the program fits under the trust guidelines as a viable beneficiary.

"It's their burden to show Shimer's viable," Coplan said.

He said in the unlikely instance where the trustees decided not to go to court and instead simply agreed North Central should receive the Shimer funds, any of the other beneficiaries of the trust could contest it in court.

"Anyone can take an action, if they choose to take an action, to protest the inclusion of Shimer," Coplan said.

However, the letter from Mitchell clearly indicated the trustees plan to take the matter to court. Coplan said the entire process could take two or three years, especially if North Central is denied the funds and elects to appeal,

Risko also asked what the city needs to do to prepare for how to spend the money. The trust clearly states the funds must be utilized for the construction, equipment and maintenance of a community center in Davis's name. Mayor Bates said the city needs to build something that makes sense to the community.

Coplan recommended the city obtain a clarification from the court on just how the city can spend the money and have the court "bless" any plans. He reminded the council it must keep the trustees well-informed and that any plans must be approved by the trustees.

Risko asked Coplan what there is to stop the city from making a plan, having it approved by the trustees and then disregard their direction and use the funds any way the city chooses. Coplan said that not only would that be morally and ethically wrong, but he doubted the trustees would give the city a lump sum of money without any commitment to a plan from the city.

The trust directs the city to set aside any funds not used in building and equipping the center to be used for maintenance and upkeep. However, Coplan cautioned city officials that they do not want to have too much money set aside and building interest that cannot be touched.

He suggested that once a plan is in place and the city sees exactly how much will be needed for annual upkeep, it ask the circuit court for a ruling on if any additional funds could be used for a different, community-based purpose.

Bates and other council members said they would like to see community involvement and input in planning the community center. The council discussed either creating a committee formed from the community or hiring a city planner for the project.

Mayor Bates said he wants everyone to have a "voice" on this.