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...

A recent Illinois appellate court decision chimed in on an interesting twist on the enforcement of non-compete agreements and when social media activity might cross the line and pose a violation. In Bankers Life and Casualty Co. v. American Senior Benefits, LLC , Bankers Life sued several former employees who had left the company and joined a competitor, allegedly in violation of their non-compete agreements.  The appeal resulted from a summary judgment award in favor of one particular employee, who was a sales manager in a Rhode Island office of the company, and focuses primarily on that employee's situation. A non-compete agreement must be reasonable in its time and territory restrictions to be enforceable at law.  In this case, the non-compete agreement provided that the employee would not compete with the company for two years after termination, within the sales territory of the Rhode Island office. From the appellate court opinion's summary of the allegations, the ...

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...

Get ready for changes to the Illinois LLC Act .  Last year a bill to amend the statute was signed into law, but with its effective date deferred to July 1, 2017, and is now less than a month away.  This is a significant update to the statute and may potentially affect existing LLCs; it is worth taking a look at an LLC's current Operating Agreement in light of the changes, to see if any updates are in order.  For a complete review of all the changes, see the text/markup of the statute here . There are many changes to the statute, but I'd like to focus on one, particularly significant change.  LLCs will now be able to designate certain members having authority to act for the company.  This is a very significant change; existing LLCs may wish to revisit their management structure and operating agreements to see whether they could benefit by utilizing this new process. As part of the application to file Articles of Organization, Illinois LLCs are required to de...

Last winter I wrote about the First District Appellate court decision in  Murphy Hylton v. Lieberman Management Services, Inc . Here is that previous post .  After that decision, one of the parties petitioned the Illinois Supreme Court to hear the case, and the court granted the petition.  In the spirit of the season, the Illinois Supreme Court last week issued its decision , affirming the First District ruling. My previous post went through the case and potential liability and immunity under the Snow and Ice Removal Act ; I will not repeat that all here.  But essentially, the ruling (at both courts) finds that the Act, which provides immunity and limits liability for negligent removal of naturally accumulated snow and ice, does NOT apply to limit liability for negligently creating an unnatural condition that causes ice to accumulate.  In this case, the plaintiff alleged that a faulty downspout installation caused the ice accumulation.  The Court is...