Husband, a co-Trustee of a Trust executed by his and his spouse in 2007, died in 2014. Court properly granted Defendants’ motion to dismiss Attorney General’s complaint for unpaid Illinois estate tax. Trust was compliant when it was drafted in 2007 and the Power established in the Family Trust was not an “inadvertent mistake” at that time. Trust was a typical estate plan congruent with federal and Illinois estate tax law when it was drafted. Wife never exercised the lifetime Power to distribute the Family Trust before she disclaimed it. No “windfall” was generated on wife’s behalf due to the Trust provision in question, and statutory safeguards were in place to prevent any such “windfall”. As wife’s Disclaimer was valid, the Family Trust qualifies as QTIP and eligible for the marital deduction, thus deferring estate tax during the wife’s lifetime as the surviving spouse. (WELCH and BOIE, concurring.)
Illinois Appellate Court
Civil Court
Trusts and Estates