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Gifts by will or in trust are often made to someone who dies before the deceased maker of the will or trust (Testator or Grantor). Anti-lapse statutes provide that the descendants of the deceased named beneficiary take the gift if the named beneficiary was a descendant of testator or grantor. Otherwise the gift to the named deceased beneficiary lapses.

For assistance with you probate and estate planning matters, contact Chicago probate lawyer Don Thompson at 312-782-0844 or email him at donthompsonlaw@sbcglobal.net.

Gifts in trust usually do not qualify for the annual gift tax exclusion unless the beneficiary has a right to withdraw the funds. Under Section 1503(c) of the Internal Revenue Code the annual exclusion can be had without withdrawal rights. There must be a single beneficiary. The funds must be available for withdrawal by the child at age 21. The trustee must have unrestricted discretion to distribution principal and income for the benefit of the beneficiary.

If the trust continues after the beneficiary reaches 21, the gift tax annual exclusions are no longer available.

If you’re interested in setting up a trust of any sort in Chicago, such as the 2530(c) trust for minors, call Don Thompson at 312-782-0844 now.

The estate and gift tax is a tax applying to all lifetime and death transfers. There is an exclusion for gifts not exceeding $13,000 each year. The exclusion applies to all gifts to a particular donee in a year. In other words a donor’s gifts up to $13,000 to each donee each year are exempt. The exclusion is doubled if a spouse joins. Therefore parents can give $26,000 per year to each child without incurring gift tax or having to file a return.

The amount of the exclusion is indexed for inflation so it may rise in the future.

Payment of tuition or medical expenses direct to a qualified school or medical provider is exempt also, even if over $13,000.

Part of estate tax planning can include giving away assets to children during life. Not only the asset, but the appreciation on it, is out of the donor’s estate. The gifts can also sometimes be made at discounted values. The annual exclusion is used to shelter these gifts from gift tax. People with very large estates often make additional gifts for which a gift tax return must be filed and use part or all of their unified credit against tax or even pay some gift tax. (The exclusion also applies to the Generation Skipping Transfer Tax.)

Contact Chicago Estate planning and probate attorney Don Thompson by calling 312-782-0844 today

Most probate estates these days are managed with independent administration. The administrator or executor must still give beneficiaries an inventory and an account, but these do not have to be filed with or approved by the court. Additionally property can usually be sold and other transactions made without court approval.

Contact Chicago probate attorney Don Thompson at 312-782-0844 or email him at donthompsonlaw@sbcglobal.net for all of your Chicago estate planning and probate needs.

Many assets are structured in such a way that the owner can designate who will be the new owner upon the present owner’s death. The form used to do this is often called a beneficiary designation. The act of designating the beneficiary or the fact of a beneficiary having been designated are also referred to by the term. Examples of assets which often allow beneficiary designations are life insurance policies, retirement plan interests (such as pension, profit sharing and 401k plans), and IRAs. Bank accounts often allow the equivalent of a beneficiary designation. This can be referred to as a pay on death account or a tentative or Totten trust account. The designated beneficiary gets it on the death of the owner, but has no rights as long as the owner is alive.

There are other assets where the type of ownership allows the equivalent of a beneficiary designation. A joint tenancy is an example. When an asset is owned by two people in joint tenancy the survivor winds up with sole ownership. This differs from a beneficiary designation in that all joint owners have a present equal right to full use of the whole asset. Also each joint owner can withdraw the entire asset if it is a bank or brokerage account unless the parties create a restriction on the right. Trusts also allow the designation of persons who will take after the death of an original owner, but the original owner’s rights are restricted. The trustee is the actual owner.

If a beneficiary is designated for an asset, ownership of that asset passes without a probate. Usually the asset is no longer subject to the claims of the decedent’s creditors because they can file their claims only against assets that would be in the probate estate if one were opened.

Call Don Thompson at 312-201-1436 for all of your Chicago, IL estate planning needs.

Zander v. Department of Human Services, unpublished, 1-09-0979 (1st Dist., 3/15/10). The transfer of the beneficial interest in a land trust can constitute a payment that is not an income payment from a revocable trust, thus subjecting the transferor to a 60 month rather than a 36 month lookback period under the Medicaid Act.

ABN AMRO Mortgage Group, Inc. v. McGahan, 237 Ill.2d 526, 342 Ill.Dec. 7, 931 N.E.2d 1190 (2010). The estate of a deceased mortgagor must be made a party to a suit for foreclosure of the mortgage.

Bank Of America, N.A., Trustee v. Carpenter, 401 Ill.App.3d 788, 340 Ill.Dec. 919, 929 N.E.2d 570 (1st Dist., 2010). Under the Rule Against Perpetuities a future interest which may not vest within 21 years after a life or lives in being at the time of its creation is void. With respect to a trust income interest payable to the descendants of someone, the grantor can specify that the lives of remaindermen living when the trust was created can be among the measuring lives.

The Carlton At The Lake, Inc. v. Barber, 401 Ill.App.3d 528, 340 Ill.Dec. 669, 928 N.E.2d 1266 (1st Dist, 2010). The Nursing Home Care Act requires a written contract between the home and each resident. When there is only an oral agreement the home cannot recover in contract. However, it can recover in quantum meruit.

Dougherty v. Cole, 401 Ill.App.3d 341, 343 Ill.Dec. 16, 934 N.E.2d 16 (4th Dist. 2010). The provision in the Probate Act known as the Slayer Statute, 755 ILCS 5/2-6, prohibits someone who intentionally and unjustifiably causes the death of another from receiving any property, benefit or other interest as a result of the death. There is no exception for a mentally ill or insane slayer.