2009 Articles

Ahoy, Ahoy! A Tax Bill on the Horizon By Jesse T. Coyle March 2009 In a bi-partisan effort, U.S. Representatives Mark Kirk (Republican) and Harry Mitchell (Democrat) introduced H..R. 498 ( “Tax Bill”), legislation designed to address the problems with the estate tax and capital gains tax. But in order to become law this bill still has a few significant hurdles to pass.

Appraisal opportunities and challenges in down markets By Tony Garvy April 2009 By understanding the approach of appraisers to determining the value of closely held business in the current market conditions, estate planners can better service their clients during the market downturn.

Bonds and the original issue discount: Easy does it By Jesse T. Coyle February 2009 With the investment landscape changing investors have shown interest in more secure and conservative investment vehicles. Many clients have expressed an interest in bonds. However, the complexity of the varying bond vehicles and the income tax implications is often something that clients fail to understand.

Choosing a Roth IRA By Jesse T. Coyle July 2009 The ultimate consideration in deciding whether to choose a Traditional or Roth IRA generally becomes whether you would rather pay tax now or later.

Editor’s corner By Katarinna McBride September 2009 It has become difficult to keep track of the plethora of tax laws passed in the last decade. Check out our chart, available at <http://www.isba.org/sections/trustsestates/9-09table.pdf>, which illustrates the complexity of attempting to coordinate the various tax laws. ■

Estate planning in a low-interest-rate environment By Jesse T. Coyle April 2009 This article discusses the mechanics of techniques such as intra-family loans, SCINs, installment sales to grantor trusts, GRATs, CLATs and charitable gifts of personal residence remainders, and how they flourish in a low-interest environment.

Ethics corner By Donald L. Shriver July 2009 If you have blown the Statute of Limitations, the 1st District says just extend it to meet your own needs.

Ethics corner: Careful with capacity By Sara Siddiqi September 2009 ACTEC commentary on clients with diminished capacity, specifically Model Rule of Professional Conduct (MRPC) 1.14, provides additional guidance to the estate planning practitioner. Specifically, the commentary provides advice on how to address the various disability determinations that a lawyer may encounter: a client whose testamentary capacity is uncertain, borderline, or doubtful.

The fine art of fine art investments By Jesse T. Coyle April 2009 Investing in art can be an exciting opportunity for many individuals to make great profit, diversify a portfolio, and to add aesthetic beauty to an individual’s home. But as with all investments, engaging in the collection of art for investment purposes carries its own unique risks that should thoroughly investigated and evaluated.

Foundational changes for private foundations: All gains and no losses By Katarinna McBride January 2009 After this year, private foundations may not carry capital losses forward to future years. However, these rules only apply to losses. There is no rule blocking recognition of gains. This tax change has the effect of “stepping up” the foundation’s cost basis in appreciated securities to fair market value tax-free. If foundations have realized capital losses in their foundations’ portfolios, they should consider whether to sell securities to realize an offsetting capital gain before year-end.

A GRAT way to transfer wealth. Well, at least for now… By Jesse T. Coyle July 2009 If you possess assets that are appreciating fast (or at least you think they will), the GRAT is simply one of the most effective ways of transferring value at a low cost. The future of this technique is not clear, however, as proposed legislation could render it ineffective.

A life to die for: A case study on life insurance settlements By Stephen M. Margolin March 2009 A fictional story illustrating why life insurance policy issuers may wish to re-examine their negative outlook on the life insurance settlement business.

A matter of right: Same-sex marriage—A look at the evolving law By Ray Prather May 2009 While Illinois does not have a constitutional amendment banning same-sex marriage, same-sex marriages are against the public policy of the State

MINORITY REPORT: Understanding the Illinois Uniform Transfers to Minors Act By Jay S. Goldenberg September 2009 Guardianship has been the traditional approach to dealing with a basic issue: how do you transfer property to a minor – who is legally incapable of selling or managing it – since their contracts are not valid.

The new Illinois QTIP election: Answers to your questions and more questions By Jason S. Ornduff November 2009 After significant discussion and lobbying, Illinois has joined 11 other states in enacting a state-qualified terminable interest property (QTIP) election separate and distinct from the federal QTIP election of I.R.C. Section 2044.

New virtual representation law By Lyman W. Welch June 2009 SB 188 passed both houses of the Illinois legislature with no dissenting votes. When signed by the Governor, the new law will become effective January 1, 2010. This new law originated from the ISBA Trusts and Estates Section Council.

Planning for post-EGTRRA wealth transfer taxes By Sean Young August 2009 As the days wane on the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the legislation’s final act would be to repeal the estate and GST taxes altogether in 2010, while retaining the gift tax along with a $1 million gift tax exclusion and a maximum rate of 35 percent.

Private annuities By Jesse T. Coyle May 2009 A private annuity can be an effective way of transferring wealth to a family member, freezing the estate, avoiding estate and gift tax, and ensuring a lifetime stream of income.

Probate Act problems in proving up wills By Lawrence P. Devens June 2009 This article examines the problem that arises when a petitioner must rely on a witness attestation clause to admit a will in a “formal proof” hearing under the Probate Act.

The Roth decision in 2010: Conversions and afterthoughts By David A. Berek November 2009 2010 promises to be an opportunistic year for Roth IRA planning, and an interesting year to say the least from a tax legislation standpoint.

The Safety GRAT™ By Robert T. Napier June 2009 Many clients believe that the greatest enemy to their wealth is the federal estate tax. The reality is that very few estates actually pay a federal estate tax and current estimates are that fewer than 20,000 estates annually will actually pay the federal estate tax. Furthermore, it is understood that quality estate planning can materially reduce, if not eliminate, any tax due.

The School of 529: Learning by Trial and Error By Katarinna McBride September 2009 Section 529 plans are an attractive and convenient means of saving for college that offer substantial tax benefits.

SCINS, GRATS and IDGTs: Acronyms that present planning opportunities in a low-interest environment By Jesse T. Coyle February 2009 With interest rates at historical lows, several wealth transfer techniques offer high net worth individuals an excellent opportunity to transfer wealth to their descendants at a minimal cost. These techniques benefit from low interest rates. Two sophisticated estate planning techniques that benefit from a low interest rate environment are the SCIN and the GRAT.

Should Illinois adopt the TOD deed? By Darrell Dies July 2009 Transfer on death of securities has worked well in Illinois for many years, so why not extend the transfer-on-death concept in Illinois to real estate and thereby allow a named beneficiary in a TODD to take direct ownership of real estate upon the grantor’s death? Let’s take a closer look at the TODD concept?

Strategic planning in divorce By Tom T. Field April 2009 This article is designed to get estate planners on par with some of the thought processes and strategies used by matrimonial attorneys during this economic crisis.

T & E Ethics Corner April 2009 Some guidelines for jointly representing spouses in estate planning.

Trusts and Estates Section Council Legislative Update By Ray J. Koenig, III & MacKenzie Hyde March 2009 This article reviews bills pending in the 96th Session of the Illinois General Assembly that impact our practice areas.

Uncertain times for estate planners: What changes loom for 2009? By Jesse T. Coyle July 2009 Several possible changes that may occur in the very near future pose great uncertainty for estate planners. The biggest uncertainty revolves around the estate tax.

Uniform Principal and Income Act 2008 Amendments: Coming to a state near you? By Adrienne M. Penta & Lauren J. Wolven February 2009 Anyone serving as a trustee of a trust subject to a principal and income act should be aware of the amendments to the uniform act discussed in this article.

Up-to-the-Minute Legislation Update June 2009 The minutes from the most recent Trusts & Estates Section meeting.