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

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Newsletter Articles From 2004

The alternate valuation date By Alexander Denenberg June 2004 In the Private Letter Ruling 2003-43-002 (June 11, 2003), the Internal Revenue Service addressed the issue of whether the earnings of a corporation during the six-month period after decedent's death that were not distributed to the decedent's estate should be treated as "included property" or "excluded property" for purposes of Code § 2032.
Anti-lapse provision added for gifts to deceased beneficiaries of intervivos trusts By Dwight H. O’Keefe October 2004 An amendment to HB 1080, now PA 93-0991, adds a new section to the Trust and Trustees Act, 760 ILCS 5/5.5, which provides anti-lapse provisions affecting trust beneficiaries of inter-vivos trusts.
Appraisal update By Carol Klima Martin June 2004 On occasion, trust and estate attorneys must evaluate or sell interests in real property. Attorneys who deal with clients' real property need to know that both Federal and Illinois laws concerning appraisers have changed.
Blount and Smith provide guidance on buy sell agreements: Restrictions disregarded under section 2703 for valuation purposes when safe harbor requirements are not met By David A. Berek and Bret R. Klemetson October 2004 In two recent cases, the Service successfully applied Section 2703 to disregard the restrictions provided under a buy-sell agreement between shareholders in Blount2 and to disregard restrictive provisions of a family limited partnership in Smith,3 resulting in significantly higher valuations of the underlying property for estate and gift tax purposes.
Comparison of transfer techniques By Jay S. Goldenberg December 2004 Tax planning is a quantitative matter. No matter how good a technique sounds, we don't know anything until we actually run the numbers.
Considerations to be made with respect to advance directives By Franklin M. Hartzell February 2004 In the preparation of estate plans for clients, most lawyers draft Advance Directives.
Did you ever wonder…? By Philip E. Koenig June 2004 Did you ever wonder why most standard will and trust clauses direct an executor to pay all of the Decedent's debts "except those debts which are secured by an interest in real estate, beneficial interest in a land trust, a cooperative or by an assignment of a life insurance policy?"
Estate planning for income in respect of a decedent (IRD) from QRPs and IRAs By Richard P. Miller June 2004 Income in respect of a decedent is a right to income that was substantially earned before the decedent's death, but that was not payable to him until after death.
Family Limited Partnerships: Yes!… No!… Well, maybe! By Robert Weber December 2004 After the Courts came in with their decisions in the Strangi case, and the Hackl case, the IRS rubbed their hands in glee, and estate planners went out looking for black clothes and sack cloth to mourn the end of the Family Limited Partnership method to try to preserve estate assets.
From the editor December 2004 Our initial article by Jay Goldenberg is a side-by-side comparison of certain estate-planning transfer techniques of company stock.
From the editors October 2004 This edition of the newsletter marks a partial change in the editorial guard: Mark Zumdahl of Sterling has accepted a leadership role in the Section Council and sadly has edited his last piece for now.
From the editors June 2004 We have several thought-provoking articles in this month's issue. Phil Koenig of Rock Island discusses will and trust clauses concerning payment of the decedent's debts.
From the editors February 2004 This issue has two important articles. The first is authored by Susan Kubar, of Quarles & Brady, from Naples, Florida, submitted by Section Council Member Tom Polachek.
Grantor retained annuity trusts: The ideal estate planning vehicle for your clients? By Susan Kubar February 2004 If you believe you have clients who would be interested in transferring assets to their children at a reduced tax cost, a grantor retained annuity trust, called a GRAT, is an ideal vehicle for you to recommend in today's low interest rate environment.
Illinois decisions By Mark E. Zumdahl February 2004 In re Estate of Madison Rae Pool was first noted in the June 2002 newsletter when the Third District Appellate Court reversed the decision of the circuit court of Putnam County, denying Petitioner Randy Pool's Petition to Revoke Letters of Administration issued to Debra Jean Clausen.
Intestate transfer does not satisfy “otherwise given” for purposes of stock purchase agreement October 2004 The issue decided in Opiela v. Roth was whether intestate succession equated to the term in the Agreement “otherwise given,” or whether intestate succession essentially was analogous to a failure to act.
Intestate transfer does not satisfy “otherwise given” for purposes of stock purchase agreement By Christopher M. Tietz and David A. Berek September 2004 In Opiela v. Roth, decided June 17, 2004, the Illinois Supreme Court held that stock of a closely held company which was subject to a Stock Purchase Agreement (“the Agreement”) between the company and a decedent, was not given by the decedent on his death to his descendants through intestate succession, but rather remained subject to the Agreement, and accordingly the company was entitled to purchase the shares.
Overdue for a raise—Small estate affidavit limit increased to $100,000 By Katarinna McBride October 2004 The highly-anticipated and widely followed Senate Bill SB2630, which raised the gross value permitted for a Small Estate Affidavit to $100,000, was signed into law by the Governor on August 6.
Recent decisions By James K. Say December 2004 National City Bank of Michigan/Illinois v. Northern Illinois University, et al, No. 2-03-1281 (Ill. App. 2nd Dist) (Nov. 5, 2004).
Recent decisions By James K. Say June 2004 In re Estate of Schlenker, Docket No. 96402 (Ill. Sup. Ct. April 1, 2004). Levi Schlenker had executed four wills before his death in July of 2001, of which only three were found.
Revenue Ruling 2004-64 provides guidance on the grantor’s payment of income taxes for irrevocable trust By Justin J. Karubas October 2004 On July 6, 2004, the Service issued Revenue Ruling 200464 providing that for gift tax purposes, there will be no gift when grantor pays income taxes, but depending on how those payments are reimbursed there may be estate tax inclusion.
The Service upholds Power of Appointment as method to fully utilize estate tax exemption By Katherine M. Cunningham October 2004 Some couples, even very wealthy ones, may not be able to use the full amount of their federal estate tax exemption unless they do some advance planning.
Some interesting IRS rulings By Mark E. Zumdahl February 2004 PLR 200340012-In this Private Letter Ruling, the IRS ruled favorably whether decedent's interest in rental real estate qualified as a closely held business for purposes of electing installment payment of estate taxes under §6166 of the Internal Revenue Code.
Tax Court decision By Mark E. Zumdahl February 2004 Estate of Mildred Green v. Commissioner, TC Memo 2003-348 decided by the Tax Court, illustrates the importance of a clearly drafted tax apportionment clause.
Tax rulings By James K. Say December 2004 PLRs 2004-32027, 2004-32028, and 2004-32029 (8/6/04) were requests brought by three siblings to determine whether an IRA owned by their father could still be subdivided to each of them, even though the IRA had passed through a trust which had itself paid various estate and administrative expenses from IRA assets.
Total Return technical amendments By Lyman W. Welch October 2004 Technical amendments to the Illinois Total Return Trust Law became effective August 23, 2004 when HR 1080 became Public Act 930991.
Using the irrevocable insurance trust By Jay S. Goldberg June 2004 Many of us are familiar with the Irrevocable Insurance Trust ("ILIT") as a direct means of leaving tax-free benefits to the family. This article will discuss other uses of the tool.