Hinch Law

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...

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...

The Illinois Appellate Court Second District's recent opinion In Re Estate of LaPlume   provides an interesting case of foreclosure law and the Probate Act in conflict - which one wins? T he foreclosure statute at issue was the Mortgage Foreclosure Act , and the plaintiff was a bank who had filed a mortgage foreclosure action separately from the decedent owner’s probate estate. The bank’s lien totaled about $165,000, and the total of liens and mortgages encumbering the property was more than $207,000.  The executor meanwhile found a potential buyer willing to pay $200,000 for the property, and filed a petition in the probate court under section 20-6 of the Probate Act , asking the court to order a short sale as per the offer.  The two cases were then consolidated in the probate court and during briefing of arguments, the executor received a revised offer to pay $205,000 for the property.  The trial court ruled for the bank and dismissed the executor’s petitions...

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 ...