Trusts & Estates

The newsletter of the ISBA’s Section on Trusts & Estates

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2005 Articles

Beginner’s guide to probating a decedent’s estate in Cook County By Jay S. Goldenberg October 2005 I received an e-mail from a friend: “I have a probate estate. What do I do?” I have tried to lay out the process step-by-step so the newest graduate will be able to function on the same basis as the experienced pro.
Circular 230—What to say By Jay S. Goldenberg October 2005 Practitioners have been inundated this summer with Circular 230 articles.
Discharge of personal responsibility for federal tax By Mary Cascino August 2005 The executor or administrator who is "qualified and appointed and acting in the United States" may apply in writing for discharge of personal liability for the decedent's income and gift tax liabilities. IRC §6905(a) (referred to herein as "executor").
Editor’s Box: IRS issues audit guide to split-dollar life insurance By Katarinna McBride August 2005 The IRS recently made split-dollar audits a bit more transparent. Under a split-dollar arrangement, an employer and employee join in buying an insurance contract on the life of the employee.
Editor’s comments By Jay S. Goldenberg October 2005 Public Act 094 0057 amends the Small Estates Affidavit provisions (755 ILCS 5/25 1) by making clear that the new $100,000 ceiling applies to estates regardless of the date of death of the decedent.
Estate taxation of IRA distributions: Two unique (yet unsuccessful) arguments taxpayers have tried to reduce their estate tax liability By Gina Usechek March 2005 This article reviews two unique approaches where taxpayers have attempted to reduce estate tax liability with respect to retirement plan distributions.
Final regulations on GST Elections-Even more taxpayer friendly By Katarinna McBride August 2005 IRS has issued Final Regulations that provide guidance for making IRC Section 2632(c)(5)(A)(i) election to not have the deemed allocation of unused generation-skipping transfer (GST) tax exemption apply for certain transfers to a GST trust (IRC Section 2632(c)(1)), and the Code Section 2632(c)(5)(A)(ii) election to treat a trust as a GST trust.
From the editors June 2005 In this month's newsletter, we lead off with an article by fellow Section Council member Guy E. Williams and his colleague Scott E. Garwood on Circular 230, which includes an update for the guidance released May 18, 2005.
From the editors March 2005 In this newsletter, we lead off with Sowmya Bharathi who compares how HIPAA coordinates with various health care-related statutes in Illinois, including the Illinois Health Care Power of Attorney Act and why our standard Illinois Health Care Power of Attorney will enable an agent to be treated as the individual for purposes of HIPAA compliance.
Illinois & HIPAA: Preemption, identification of personal representatives, and activated status of health care powers By Sowmya Bharathi March 2005 The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") is a federal statute that provides for the development of uniform national health information data standards and privacy standards.
Illinois modifies Illinois estate tax to apportion the state death tax credit amount among other states with tax situs real estate By David A. Berek August 2005 On August 2, 2005 Governor Blagojevich signed HB 1570 (PA 94-0419) effective as of January 1, 2003, which modifies the calculation of the Illinois estate tax.
In brief: Case reviews By Katarinna McBride & David A. Berek August 2005 In the Estate of Jelke, the Tax Court acknowledged that its position to reduce built-in capital gains was a controversial.
In support for will depository legislation for Illinois By Paul A. Meints & Ray J. Koenig, III October 2005 1. The concept of a will depository [being one and the same as a “will repository”] has been a goal of the Trusts and Estate’s Committee of the Illinois State Bar Association dating back to approximately 1988 when it was first proposed by Mr. Joseph LaRocco, an older sole practitioner in Chicago, now deceased, who was then a member of the Committee.
The living will By Dr. Bart A. Basi August 2005 Health care documents have been given a lot of press lately. Months after the Terri Schiavo case, people are still inquiring about living wills.
Other recent developments and cases By David A. Berek March 2005 The Service issued Proposed Regulations under section 2702, 69 Fed. Reg. 44476 (2004), consistent with the holdings in Walton v. Commissioner, 115 T.C. 589 (2000), acq., Notice 2003-72, 2003-44 I.R.B. 964 (Nov. 3, 2003), and Schott v. Commissioner, T.C. Memo 2001-110, rev'd and remanded 319 F.3d 1203 (9th Cir. 2003).
Potential statutory conflict on disposition of remains By Mary Cascino October 2005 A situation may arise in which there is a lack of direction for disposition of the remains of a decedent.
Prompt assessment of federal tax related to a decedent By Mary Cascino June 2005 An executor or administrator of a decedent's estate can request a prompt assessment of a tax relating to returns filed by the representative of a decedent's estate, i.e., income tax of a decedent (Form 1040); estate income tax (Form 1041); and/or the decedent's gift tax (Form 709). (I.R.C. §6501(d)).
Proposed regulations to elect out of deemed allocations By Katarinna McBride March 2005 The Internal Revenue Service issued Proposed Regulations under section 2632 concerning (i) guidance for making the election under section 2632(c)(5)(A)(i) to elect out of the deemed allocation of unused Generation Skipping Tax ("GST") exemption under section 2632(c)(1) to a GST trust, (ii) guidance for making the election under section 2632(c)(5)(A)(ii) to treat a trust as a GST trust, and (iii) guidance with regard to electing out of deemed allocations to a specific transfer or a specific transfer and all subsequent transfers to a trust.
Proposed Will Depository Legislation—Probate Act of Illinois October 2005 (a) A depositor, as defined in section (e), may deposit a will with the circuit court clerk of the county in which the testator resided when the testator executed the will if the depositor certifies that he is unable to locate the testator after a diligent search.
Recent developments and cases in Illinois By Paul A. Meints March 2005 Illinois has been quietly and effectively stepping up its collection program to recover benefits paid to people in nursing homes.
Recent developments in estate, gift, and income tax By David A. Berek June 2005 Three recent cases, Estate of Bongard, Estate of Bigelow and In re Ehman illustrate the importance of non-tax reasons for creating family limited partnerships.
Recent developments in federal tax By David A. Berek October 2005 On August 22, 2005 the Service issued eight Revenue Procedures setting forth sample trust language for charitable remainder unitrusts.
Removal of a guardian By Ray J. Koenig, III August 2005 As the median age of our population increases, it is likely that the number of guardianships will also increase.
A review of the final regulations under Circular 230 By Guy E. Williams & Scott E. Garwood June 2005 Estate planning practitioners face the prospect of fines, censure, suspension and disbarment from practice before the IRS for violations beginning June 20, 2005-Further regulations issued on May 18, 2005 (see last page) help to clarify some of the problem areas.
Revised Form 1023: What it means for new charitable organizations By Marjorie A. Harris August 2005 In order to qualify for exemption from Federal income tax, most new charitable organizations are required to file Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, within 27 months following the end of the month in which the organization was established.
Sample client letter regarding Health Care Powers of Attorney, Living Wills and the Terri Schiavo matter By William M. Long June 2005 We are writing to you today to alert you of some important developments in the area of advance medical directives, which generally include Powers of Attorney for Health Care and Living Wills.
Sample Client letter-Circular 230 By Katarinna McBride August 2005 With the necessity of attaching Circular 230 disclaimers to letters, faxes, and e-mail messages, comes the obligation of explaining Circular 230 to our clients.
Strangi strikes again-The Fifth Circuit finds in favor of Service; assets transferred to Family Limited Partnership included in Decedent’s estate By David A. Berek August 2005 The Fifth Circuit held in favor of the Service in Strangi v. Commissioner, (No. 03-60992, Jul. 15, 2005; 2005 WL 1660817) finding that assets transferred during the decedent's lifetime were includable in the decedent's estate under IRC section 2036(a)(1).
True to form, the Tax Court overrides formula price in family business buy-sell agreements By Michael Cyrs March 2005 In the October 2004 newsletter, members of this Section Council highlighted two recent cases (Estate of Blount and Estate of Smith) wherein the Internal Revenue Service ("Service") successfully applied Internal Revenue Code Section 2703 principles to disregard the restrictions provided under a buy-sell agreement between shareholders and to disregard restrictive provisions of a family limited partnership, both resulting in significantly higher valuations of the underlying property for estate and gift tax purposes.
What I tell my clients about Powers of Attorney By David R. Abell June 2005 Enclosed are drafts of powers of attorney for property and health care and an authorization for use and release of medical information which we have prepared at your request.