Hinch Law

The Illinois Appellate Court 4th District case of Collins v. Noltensmeier provides an example of why power attorney agents need to tread very carefully when giving gifts to themselves.  After the principal (Billy) passed away, the case arose as a dispute between Billy's brother and niece (plaintiffs) and his long-term girlfriend/partner Patricia who also acted as his caretaker. Billy signed a will and power of attorney for property (using the statutory short form ) about a week before he passed away, naming Patricia as his POA agent, executor and sole beneficiary in his will. After Billy died and Defendant filed his will with the court, plaintiffs filed a will contest and a separate case against defendant for breach of fiduciary duty and wrongful conversion of Billy's IRA.  Apparently Patricia acting as POA agent for Billy had changed the beneficiary of his IRA, to herself. In court, Patricia defended herself by citing the wording of the Illinois statutory POA form, whi...

If your spouse died since 2011, the IRS earlier this year extended the timeframe you have to make a "portability" election by filing a Form 706 Estate Tax Return , until the later of either January 2, 2018 or the second anniversary of the decedent's date of death.  See Revenue Procedure 2017-34 . Here's what that means and why it is important . Remember the "fiscal cliff" issue from a few years back?  The federal estate tax used to have a sunset provision.  When that expired, Congress did not update it right away, but debated what to do, before finally enacting a law that made the estate tax permanent (not sunsetting). The estate tax exclusion, the threshold amount of wealth below which you would not owe any estate tax, was set at $5 million, with an adjustment each year for inflation. (For 2017 that number is $5.49 million, and the IRS has announced it will go up to $5.6 million for 2018.  For ease of reference, I'm going to stick to the round num...

In the recent case In Re: Estate of Lee , the Illinois Appellate Court , Third District, reviewed orders from the trial court requiring an accounting from the trustee, finding contempt for failure to comply by the deadline in the court order for the accounting, ordering the executor to bypass the trustee and make payments direct to the beneficiaries, and removing the trustee.  The appellate court affirmed the court orders, except reversing the contempt ruling and sanctions. The decedent (Sandra) died in 2005, leaving three minor children. She had a will that (in a common estate planning strategy for parents with minor children) included a testamentary trust as the means by which her children would receive their inheritance, and providing that each child would receive 1/3 of the trust assets at the age of 25.  The will appointed an executor (Jennifer) and a trustee (Kathleen) who appears to also have served as guardian (the opinion indicates the children lived with Kathl...

The recent ruling of the Illinois Supreme Court , In re Estate of Thomas F. Shelton , presents the sad tale of a dispute between siblings over a family farm, and the fiduciary duties required of power of attorney agents.  Mr. and Mrs. Shelton both passed away in 2012.  Each named their daughter as executor of their estates, but in a "divide and conquer" approach to naming fiduciaries that is not uncommon for those with more than one adult child, Mr. and Mrs. Shelton named each other as primary agent for Power of Attorney for Property or financial matters, and their son as backup agent (the daughter was named as the second backup). (The opinion does not specify, but it is likely they each named each other as first choice for executor, but the backup order was reversed as to the son and daughter).  The POAs were signed in 2005, using the "statutory short form" POA for Property .  Fast forward then to late 2011, approximately one year before the death of both Mr...

I recently received a call on behalf of a former client who had apparently suffered some serious medical issues.  The gentleman who called informed me that, since I last communicated with the former client, he had signed a new Power of Attorney for Property ("POA") appointing the caller his agent.  He told me that they had not worked with an attorney in preparing this new POA but just "found one online." The agent sought to review/obtain a copy of the former client's file at my office, including his estate planning documents.  I asked the agent to send me a copy of the new POA so I could take a look at it. When I reviewed the new POA document, I saw the typewritten provision where the former client named the caller his agent.  I then checked to ensure the document had been signed by the principal, witnessed and notarized properly.   There were two attesting witnesses who signed the document - the named agent himself and his spouse (the spouse was also named...

I recently met with some new clients (a married couple aged 60-70) to review their estate plan.  They had met with another attorney who prepared wills for them within the past year.  As we went over their estate planning goals and their previous wills, the first thing we discovered is that the wills they had prepared did not provide the bequest and specific gift terms they were looking for, and which they thought had been written into their wills. The second thing that stood out was a paragraph like this that the clients did not realize had been written into their wills (I'm paraphrasing): "Joe and Jane Testators have retained Larry Lawyer to prepare their wills, and they want Ed Executor and their family to continue to retain Larry Lawyer to handle probate of their estates." Now don't get me wrong, obviously when I help clients with estate planning, I certainly hope to be able to continue to help their families with probate and other legal issues that arise whe...

As mentioned in our previous post , the Illinois Statutory Short Form Power of Attorney for Health Care was recently amended.  The new form provides the agent has authority over four general issues, including: "(iv) Carrying out the plans I have already made, or, if I have not done so, making decisions about my body or remains, including organ, tissue or whole body donation, autopsy, cremation, and burial."    The same section of the statute, after the form, further states that the agent is presumed to have authority "...to direct the disposition of the principal's remains."   755 ILCS 45/4-10 .   However, Illinois also has a "Disposition of Remains Act," found at 755 ILCS 65/1 , et. seq.  This statute contains a list of persons having priority to make such decisions, UNLESS the deceased left directions in one of a number of possible writings, one of which is a Power of Attorney for Health Care.  The statute does NOT provide for any of ...

This is the fourth post on changes to Illinois law for 2015 affecting estate planning.   The first  covered the amended  Health Care Power of Attorney act  and  the second  addressed the amended  "Small Estate Affidavit"  found in the Probate Act.  The third  summarized the  new Article IVa  added to the Probate Act for 2015, on "Presumptively Void Transfers."  A fourth change to Illinois estate planning law in 2015 is that the  Residential Real Property Transfer on Death Instrument Act , 755 ILCS 27/5, has been amended.  The TODI Act was enacted in Illinois just a few years ago, but TODI statutes have been around for a while in other States.  The TODI concept is essentially to have a mechanism for transferring real property at death without probate.  Although the Probate Act provides for "small estates" to avoid probate via a Small Estate Affidavit, the definition of "small estate" hinges on the valu...

This is our third post on changes to Illinois law for 2015 affecting estate planning.   The first covered the amended Health Care Power of Attorney act and the second addressed the amended "Small Estate Affidavit" found in the Probate Act. A new Article IVa was also added to the Probate Act for 2015, on "Presumptively Void Transfers." The new section seeks to prevent fraud or undue influence by a caregiver inducing their ward to pay the caregiver a significant legacy/bequest payable on or after the death of the ward, due to the vulnerability of the ward.  The statute is carefully drafted to exclude certain family members of the ward, but does include as a "caregiver" the spouse, cohabitant, child, or employee of the person actually providing the care. Thus a caregiver could not circumvent the statute by asking the ward to name the caregiver's spouse in the ward's will, instead of the caregiver herself. The significance of the bequest is se...

This is the second in a series of posts about changes to Illinois estate planning law for 2015.   The first post went over changes to the Power of Attorney Act , and particularly the new "Statutory Short Form" Power of Attorney for Health Care .   Article 25 of the Probate Act , on "Small Estates," was also significantly changed. The Small Estates portion of the Probate Act provides the option for a representative of a decedent to prepare and sign a "Small Estate Affidavit" to be provided to a bank or other financial institution or person holding estate assets, to facilitate payment and release of the estate's assets as directed in the affidavit.  For eligible estates, the Small Estate Affidavit serves as a short-form, expedited process that can be used in lieu of a formal probate filing.  Eligibility is primarily determined by the assets the decedent's personal estate not exceeding a total value of $100,000. The Affidavit itself is a form ...

January 1, 2015 ushered into law several significant changes to Illinois estate planning law.  In this series, we'll take a look at some of them and how these changes might affect your estate plan.  Let's begin by taking a look at a very important part of every estate plan - the Power of Attorney Act .   Unlike a Will, a Power of Attorney authorizes someone (your "agent") to act on your behalf while you are still living. The Illinois Power Attorney Act, 755 ILCS 45, has four Articles. The Title (Article I), Durable Powers of Attorney (Article II), the Statutory Short Form POA for Property (Article III), and Powers of Attorney for Health Care (Article IV).  Article IV is the only one that was changed effective January 1, 2015 (there were a few changes to Article II made effective in July 2014) and is the focus of this post. The Health Care Article IV of the Power of Attorney Act contains a Statutory Short Form Health Care POA within it, and this form was c...

Normally when folks think of a "joint bank account," such as between a married couple, the common sense presumption is that both are owners of the entire account, right?  That form of ownership is called Joint Tenancy.  You may be familiar with it from application in real estate; it also applies to personal property, based on the Illinois Joint Tenancy Act, 765 ILCS 1005 , et. seq.  One of the key provisions of an asset owned by two or more people in joint tenancy is that, if one of the owners dies, the surviving joint tenants still own the whole asset; the asset is not part of the deceased owner's estate (called a "right of survivorship"). This was the subject of dispute in the recent case Konfrst v. Stehlik , __ Ill.App.3d __, Case No. 1-13-2113 (1st Dist. June 20, 2014), in which the executor of a decedent's estate sought to recover assets from such joint accounts from the other account holder.  The decedent was a widow and opened the subject accounts a...

"How often do I need to review (or update) my Will?"  There is no magic answer to that question; instead generally speaking it is good to review your estate planning documents whenever life changes occur.  These would include marriage and divorce, having or adopting a child, death in the family, moving, and coming into an inheritance, as just a few examples. Sometimes a client will ask this question while cringing at a perceived self-serving response from the attorney, requiring the client to come back to the attorney repeatedly, and thus incurring more cost.  Regular reviews with your attorney are helpful like "checkups" to ensure you still have a "healthy" estate plan that meets your needs. Those needs change over time, and the law is constantly evolving as well.  In light of these constantly changing dynamics, it would be unrealistic to view estate planning as a "one and done" process. To help with this question, consider the "Who,...

Now that the calendar has turned over to 2012, the new I llinois Residential Real Property Transfer on Death Instrument (TODI) Act , 755 ILCS 27/1 et. seq, (the "Act") has taken effect.  The Act gives Illinois residential property owners a new and useful estate planning tool. What is a TODI?  A TODI is similar to, but distinctive from a deed; it is recorded with the county in which the property is located while the property owner is alive, but that takes effect only upon the death of the owner , as long as certain statutory conditions are met. Why the Act Matters - In Illinois, real property personally owned by a decedent requires a probate action, regardless of the value of the estate.  The TODI gets the property out of probate.  Trust planning can accomplish the same goal but is not typically focused on a specific property.  The TODI is a simpler, more cost-effective mechanism, more tailor-made to accomplish the goal of transferring residential real pr...

This is the third and final part of the "Ask a Lawyer" series of posts responding to the initial question, "Why should I hire a lawyer to help with my will or trust."  In the first post , we explained why it is important to have an "estate plan," and what that entails.  In the second edition , we discussed why everyone should have a will.  The third component of the initial question says, assuming that I've convinced you that you need to do some estate planning, why hire a lawyer to help?  Why not use one of the many website offering will forms for cheap and simply do it yourself? First, if you've made it this far and recognize that you need to do some estate planning, I commend you .  You have already made a decision to take action to provide for your loved ones and to consider what will happen to your estate when you are gone.  You have overcome the first, significant hurdle-- you are doing something and not procrastinating! Having decide...

This is the second in a long-winded three part answer to the question, "Why Should I Hire a Lawyer to Help with My Estate Planning?"  In Part 1 , we talked about estate planning generally and why it is important.  This post will address the issue of why it is important to have a will, and the tangential question "what happens if I die without a will?"  Finally, the last part of this series will answer the question implied in these questions - "Even if I need a Will, why shouldn't I just do it myself, or order one off a website?" Hopefully most people know that a Will is a legal document that allows one to state their wishes for what happens to their assets when they die (excluding certain non-probate assets, such as life insurance) and who manages their estate.  A Will can also designate who will serve as guardian for one's children.  Wills are often drafted in conjunction with trusts to provide additional safeguards for management of assets...

This is a common question and has multiple layers to it.  To give a complete answer, I will break it out into three questions, and answer the latter two parts in future posts: 1.  What is "estate planning" and why should I have an estate plan (a/k/a, isn't that just for the "rich")? 2.  Why do I need a Will, and what happens if I die without a Will? 3.  Even if I need a Will, why shouldn't I just do it myself, or order one off a website? Appropriately answering number 1 first, an estate plan is really the process of considering what will happen when you die or are incapacitated.  This involves financial considerations, such as how your assets will be distributed, via wills, trusts, probate, and other non-probate assets such as life insurance; who will inherit family heirlooms; how taxes, debts, and expenses will be handled; and who will direct your affairs.  It also involves personal, family considerations, such as who will take care of your kids...