Publications

Section Newsletter Articles on Trusts and Estates

Foundational changes for private foundations: All gains and no losses By Katarinna McBride Trusts and Estates, 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 year-end opportunity to wash your dirty stocks: Harvesting losses with wash sales By David A. Berek and Jesse T. Coyle Trusts and Estates, January 2009 The Internal Revenue Code Section 165(a) permits deductions for any loss sustained during the taxable year and not compensated for by insurance or otherwise. The broad language of Section 165 seemingly allows deductions for almost any type of loss. Logically, the language has of this Section has resulted in abuse, causing Congress to respond by creating limitations on the deductibility of losses. One of the deductions that Congress has disallowed is the deduction for losses resulting from wash sales of stock or securities.  
Year-end tax tips By Jesse T. Coyle Trusts and Estates, January 2009 Before the calendar year ends, consider the following tax planning techniques.
Estate and gift tax changes for 2009 By Mike Drone Agricultural Law, November 2008 Several changes in the estate and gift tax law go into effect in 2009.
“Jewish Clause” in trust unenforceable because it is against public policy By Enid Kempe Olsen Elder Law, November 2008 The Appellate Court found that under Illinois law and under the Restatement (Third) of Trusts, the Jewish Clause considered in this case is invalid because it seriously interferes with and limits the rights of individuals to marry a person of their own choosing. 
A happy marriage: Divorce and estate planning By Katarinna McBride Trusts and Estates, October 2008 Upon divorce, it is common for one spouse to pay alimony, modernly referred to as spousal support, to the other spouse.
Preferred Partnership Interest Sale To Grantor Trust By Stephen M. Margolin Trusts and Estates, October 2008 This article discusses the benefits of recapitalizing a partnership with preferred interests, and the sale of those interests to a grantor trust.
A short note on the market of opportunities By Katarinna McBride Trusts and Estates, October 2008 With stock prices bottoming out, this may be a great opportunity to make annual exclusion gifts of publicly traded stock.
Deducting administration expenses at the first death By Jason S. Ornduff and Georgia Loukas Demeros Trusts and Estates, August 2008 If an estate elects to deduct its administration expenses on the estate tax return and those administration expenses exceed the amounts deducted, then the excess amounts can be deducted on the estate’s income tax return. However, a statement must accompany the estate’s income tax return notifying the IRS that the administration expenses exceed those deducted on the estate tax return and that the estate waives its right to deduct the excess expenses on the estate tax return.
FDIC protection for trust accounts By Katarinna McBride Trusts and Estates, August 2008 This article is designed as a comprehensive guide for counsel and clients regarding the significant FDIC protection available for bank accounts owned by revocable and irrevocable trusts as well as pay-on-death accounts and in trust for accounts.
A political question By Katarinna McBride Trusts and Estates, August 2008 The movement to eliminate the estate tax came to a head in 2001, when an unprecedented tax cutting regime was enacted to repeal the estate tax in 2010 and reinstate it in 2011.
Push comes to shove By Robert Iverson Trusts and Estates, April 2008 The efforts of the ISBA Trusts & Estates Council were realized on March 11, 2008 when the ISBA Board approved the Council’s proposal to amend 35 ILCS 405/2 of the Illinois Compiled Statutes.
Tax tips for estate planners By Julie Hendricks Trusts and Estates, April 2008 At the helm of another tax season lie opportunities for calmer seas. The following are some areas in which estate planners may find some navigation tips.
Trusts and Estates Section Council legislative update By Ray J. Koenig, III and Amy Jo Smith Trusts and Estates, April 2008 An important duty of the Trusts and Estates Section Council is to monitor and advocate for legislation impacting our areas of practice.
Converting a life insurance policy into cash while the insured is alive: Viatical and life settlements By Paul E. Freehling Senior Lawyers, March 2008 This article concerns a relatively new way to convert a life insurance policy into cash while the insured person is alive: sell it on the market.
An ancillary lesson By Darrell Dies Trusts and Estates, February 2008 A hypothetical scenario illustrating potential estate administrative expenses in several states.
Keeping score: New reporting requirements for capital gains By Robert Weber Trusts and Estates, February 2008 According to the IRS, incorrect reporting of capital gains accounts for nearly $345 billion per year in unpaid taxes.
Life estate transaction legal considerations By Alan E. Stumpf Agricultural Law, February 2008 To serve our clients better we need to be thinking and counseling about a number of future responsibility, transaction and taxation issues.
Return Preparer Accuracy Standards under 6694 now applicable to estate and gift tax returns By David A. Berek Trusts and Estates, February 2008 Just in time for tax return season, Congress and Treasury recently revised the preparer accuracy standards that govern the preparation of tax returns.
Time-out for Talty By Robert Iverson Trusts and Estates, February 2008 In Talty v. Talty, decided in October of 2007, the Third District Appellate Court delivered a forceful message to self-interested fiduciaries.
The delayed QTIP: The Illinois Wait-n-See By Katarinna McBride Trusts and Estates, December 2007 After several frustrating and failed attempts to combine efforts with the Attorney General to structure legislation, the ISBA Trusts & Estates Section Council is taking the initiative to propose legislation amending 35 ILCS 405/2 of the Illinois Compiled Statutes.
Not just wills for heroes By Tarek A. Fadel Young Lawyers Division, December 2007 Over the past few weeks, a few of my colleagues from the Young Lawyer’s Division and I have been evaluating a program called Wills for Heroes (www.willsforheroes.org).
What a difference a day makes: Estate of Frazier Jelke III By Katarinna McBride Trusts and Estates, December 2007 In a case of first impression, and reversing the Tax Court, the Eleventh Circuit in Estate of Frazier Jelke III held that in determining the estate tax value of company stock, the company’s value is reduced by the entire built-in capital gain as of the date of death.
Legislative update: Ten new Public Acts that affect general practice By J.A. Sebastian General Practice, Solo, and Small Firm, November 2007 The following is a summary of recent legislative action of interest to members of the ISBA General Practice, Solo, and Small Firm Section.
Car dealers—Don’t get stuck with a lemon for an estate plan By Martin P. Ryan, Bill Kelly, and Ira Levin Corporate Law Departments, October 2007 Automobile dealers spend their lifetimes building dealerships into profitable and valuable enterprises.
Estate tax update: Estate tax reform proposals By Gregg M. Simon Trusts and Estates, October 2007 On March 21, 2007, while the Senate was considering the fiscal 2008 budget resolution (S. Con. Res. 21), Congress hinted that it just may take up estate tax reform.
Five new laws passed in Springfield: Trusts and Estates Section Council legislative update By Ray J. Koenig and Amy Jo Smith Trusts and Estates, October 2007 During the 95th Session of the Illinois General Assembly, the Trusts and Estates Section Council monitored 20 pieces of proposed legislation impacting our area of practice.
A lesson in discretion: Leona Helmsley’s last will and testament By Katarinna McBride Trusts and Estates, October 2007 Many clients regard the content of their wills to be a private matter. Unfortunately, state law often requires that wills be recorded, and therefore open to public inspection by the media, creditors, distant relatives—essentially anyone.
Regulating the acronyms: GRAT, GRUT, QPRT, CRAT and CRUT By Gregg M. Simon Trusts and Estates, October 2007 The IRS proposed rules for determining the extent to which a trust in which the grantor has retained the use of property or the right to an annuity, unitrust, or other income payment for life, for any period not ascertainable without reference to the Grantor’s death, or for a period that does not in fact end before the Grantor’s death, is includible in the Grantor’s gross estate under IRC §2036. Prop. Reg. §20.2036-1, Prop. Reg §20.2039-1.
Major “Kiddie Tax” changes By Edward J. Fellin Trusts and Estates, September 2007 The Small Business and Work Community Tax Act of 2007 extends the reach of “Kiddie Tax” that is imposed on the investment income of minor children.