New Law Allows Surviving Spouse to Defer Illinois Estate Tax and Other Recent Illinois and Federal Estate Planning Developments
October 13, 2009
Illinois Estate Tax Can Be Delayed By means of a special trust and a state-only qualified terminable interest property (QTIP) election as a result of a law enacted in September 2009, the Illinois estate tax may now be postponed until the death of the surviving spouse without increasing the federal tax. Most likely an amendment to existing trusts will be required to take advantage of this new election.
Family Settlement Agreement Eased Changes in the Illinois virtual representation law effective January 1, 2010, will allow adult trust beneficiaries in some cases to consent on behalf of minor beneficiaries to resolve ambiguities in the operation of a trust.
Estate Tax in 2010? The U.S. estate tax is supposed to vanish for just next year, 2010. Speculation is that Congress will pass a one-year extension of the current law rather than enact a permanent fix.
STOLI Is Terminal So-called stranger-originated life insurance (STOLI) will be banned starting in July 2010. In addition, viatical settlements will be regulated.
Guardians for Adults in Several States Enactment of the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act defines which state has jurisdiction and allows some cross-border recognition of judgments in other states.
Investments by Charities Adoption of the Uniform Prudent Management of Institutional Funds Act is intended to modernize the rules for investment by charities.
Notarization of Cook County Residential Deeds Deeds to residences in Cook County now require the notary in most cases to maintain a Notarial Record and a thumbprint of the signer.
Bank Convenience Accounts Banks may permit a depositor to add a convenience signer who may make deposits and withdrawals but has no ownership rights at the depositor’s death.
Recapture Deduction for Illinois 529 Plans If an Illinois income tax deduction is obtained when a contribution is made to a 529 college savings plan and a distribution is not used to pay certain higher education expenses, it may be required for the taxpayer to add to his or her Illinois income the amount of the original contribution.
Designating a Beneficiary on an Auto Title Another means of avoiding probate without gift tax consequences is to designate a beneficiary of the vehicle. The beneficiary would have no interest in the vehicle during the owner’s life.
Depository for Orphan Wills What happens to wills and trusts when the person who signed them cannot be located? Now the Illinois Secretary of State is directed to accept them for deposit for a small fee.
Illinois Supreme Court Upholds Religious Restriction Clause in a Trust On September 24, 2009, the Illinois Supreme Court in Estate of Feinberg reversed an appellate court decision and upheld disinheritance of grandchildren who married outside the settlor’s faith and whose spouse did not convert within one year of the marriage. The Court said that such a provision did not tend to unreasonably restrict marriage or encourage divorce.
Majority of Beneficiaries Cannot Release Trustee?
In Vena an Illinois appellate court held that a trust account approved by all but one beneficiary was insufficient to bind the non-consenting beneficiary despite language in the trust agreement permitting majority approval. Does this mean unanimous approval is always required to avoid a court hearing?
DNR Needs One Witness A do-not-resuscitate form needs one witness instead of two witnesses to the patient’s signature.
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