Proposal would continue exemption of estate tax
The ISBA Board of Governors voted March 7 to support proposed legislation that would correct a looming disparity between state and federal taxation of estates.
In 2009, federal law will exempt estates of less than $3.5 million from taxation, but Illinois law would tax estates of more than $2 million unless the state legislature enacts a correction this year.
Because of the marital deduction for a surviving spouse, Illinois has not taxed a decedent’s estate since 1983, but that would change next year without adoption of a qualified terminal interest property (QTIP) election.
Wheaton attorney Justin J. Karubas, a member of the ISBA Trusts and Estates Section Council, told the Board of Governors that the state should have a QTIP election that mirrors that of federal law.
For example, Karubas said that in 2009, the state could tax a $3.5 million estate for $209,124 and the bypass trust for a spouse would become $3,290.876.
“This is contrary to the historic practice in which fully funding the bypass trust results in no additional estate tax,” he said.
Proposed legislation would continue the 25-year practice in Illinois of deferring estate taxes on the death of the first spouse until recapture on the death of the second spouse.
ISBA legislative affairs director James R. Covington III advised the board, however, that recapture “is not a sure thing” under either current law or the new proposal.
“Such unpredictable events as another marriage, a move to another state, dissipation of the QTIP trust, or other deductions such as charitable contributions may affect recapture,” he noted in a summary.
LLLAF board gets five appointments
The Board of Governors voted to accept recommendations from the Land of Lincoln Legal Assistance Foundation for the appointments of five members of its board of directors.
Two current board members were re-appointed: Gerald S. Reed of Carbondale and Robert John Kane of Springfield. Three new members will fill vacancies caused by resignations.
Bonnie Levo of Troy, an active member of the LLLAF pro bono panel in Madison County, will represent 12 counties of the Western Region, served by the Alton office.
John E. Thies of Urbana, co-chair of the Champaign County capital campaign committee, will represent 14 counties of the Eastern Region, served by the Champaign office and satellite office in Charleston.
A former member of the ISBA Board of Governors and Assembly, Thies is a member of the Civil Practice and Procedure Section Council.
Christopher G. Scholz of Quincy will fill an at-large LLLAF board seat. He is active in the Adams County Bar Association’s Indigency and Referral Committee.