The New Year 2026 will bring a variety of changes to Illinois law. One of those will be effectivce January 1, 2026, when private Illinois housing providers will need to include a summary of the Illinois Safe Homes Act as the first page of all residential leases.
The Act was introduced back in 2006, with the goal of providing protections for survivors of domestic and sexual violence. Illinois legislators passed the “Summary of Rights for the Illinois Safe Homes Act” (Public Act 103-1031). The mandatory summary to be provided by landlords must be included with new leases and lease renewals starting in 2026.
What does the Summary include? There is a summary of tenant rights and protections under the law, such as the right to terminate a lease early when the tenant is subject to a threat of domestic or sexual violence, without penalty. There is also a right to change or re-key locks to prevent further abuse. Eviction protections based on incidents of domestic or sexual violence are included in the Act and in the summary description. The prohibition on discrimination is also covered.
And the summary includes a list of free legal service providers.
Who should pay attention? Both landlords and those who represent landlords for leasing purposes should become familiar with the Act, the requirement to now attach the Summary of the Act to the front of the Lease, and the penalties for failure to comply.
Want to discuss the Illinois Safe Homes Act? Contact the Attorneys at Marc D Sherman & Colleagues, PC using this link: https://mshermanlaw.com/contact/
You have created your Living Trust. If you are like most people, you put the documents in a reasonably safe place and after some of the initial changes to your accounts there was no further follow up. Most of us don’t think that there are many changes possibly affecting our trust assets. But that’s typically not true. In any two-year period there are often changes worth discussing with your Attorney.
It’s so important to review your trust funding. Only through your own diligence will the trust and your other Estate Planning tools work the way that you intended.
Real Estate Interests:
Have your real property interests been transferred into the living trust? This would be done by deed in most instances. Changes to your prior real estate investments, or additions to your portfolio, may suggest a review with your Attorney. Has your prior residence now been changed to investment real estate? Did you previously use a transfer on death instrument (TODI) that should be reviewed?
Changes to your beneficiaries, changes to your plans for holding or distributing the real estate currently and after you have passed away, and changes affecting children and others who may inherit your real estate are important considerations.
Important situations that should trigger a discussion: Death or disability of a joint owner or beneficiary, and changes to the property or your expectations and plans for the property and its use, and changes to your residence/domicile, to name a few.
Business Interests, Including S-Corps and LLCs:
Have changes taken place with your Business activities? Are there new Members who have joined your LLC or new persons involved in your subchapter-S or other corporation? Will there be plans soon to consider succession of the business interests?
Changes in management, operations, and participants’ expectations can trigger important discussions about your living trust and estate plans. This may include modifications to the Operating Agreement for the LLC or amendments to the ByLaws for the corporation.
Changes In Accounts, Including IRA and 401k Accounts:
For living trusts and estate planning generally, there are useful considerations prompted by two areas of change, in particular.
Significant change in the health or other activities affecting your beneficiaries? Consideration of protections for your beneficiaries in these circumstances may involve the Account and the plan beneficiaries in order to avoid having your inherited IRA and 401k funds reachable by a beneficiary’s creditors, or affecting eligibility of beneficiaries for medical or other programs. In many instances, the timing of your trust and other estate planning may be key to putting important protections into place.
Changes to your accounts of all types, including financial investment accounts, Bank and CD accounts, and others, may have been made without consideration of whether those accounts should be titled in the name of your estate planning living trust. If you have not reviewed your accounts since creation of your living trust, or you have made changes to your accounts or recently opened new accounts, engage your Attorney for a follow-up review so that simple, worthwhile changes can be made.
You invested in your living trust and in your updates to your Will and Powers of Attorney for your estate planning purposes. Don’t miss out on the opportunity to accomplish an important review to make sure that your expectations will be followed and your assets are properly covered.
The Attorneys at Marc D Sherman & Colleagues PC can assist you with your review. Reach out to make an appointment: https://mshermanlaw.com/contact/
Sure you can. But there are troublesome concerns to watch out for.
Looking for ways to transfer property after death, without having to worry about probate court costs and delays, is a common topic. Sometimes clients ask if they can simply designate a beneficiary in connection with their home or even their investment or vacation property, the same way they do with their life insurance policy, pension, 401(k) or IRA account.
The simple answer is: It’s possible in Illinois and in most other jurisdictions to identify a beneficiary for transfer of the property without doing so in a Will or a Trust. It’s done through a Transfer On Death Instrument (TODI for short). There is a reasonably straightforward format for you to create with your lawyer.
But there are often pitfalls in the use of a TODI that are good reasons to reconsider this approach.
What is a TODI?
The concept of a TODI was created as a simple option to help avoid the costs and the time that it usually takes to go through the probate court process. If the real estate property is owned in your own name at the time of death, Illinois law requires that the property be formally transferred (or sold and the value transferred) through a formal months-long process called “probate”. Like a pay-on-death form often used by banks and financial institutions, or a beneficiary designation form used by life insurance or annuity companies, the TODI specifies the identity of the beneficiary and the transfer to them is expected to occur when the property owner dies, without the need to go to the court.
The TODI can be useful, because you can still mortgage or sell the home prior to their death, and you can make changes to the TODI if you later want to do so by simply revoking and filing a new TODI in the real estate records.
What is the need for caution?
Sometimes it’s as simple as your trying to do it yourself and not following the legal requirements for witnesses on the form, properly notarizing the form or properly describing the property and describing the beneficiaries. Recently, very smart clients didn’t realize that just including both of their daughters on the form accidentally left a potential problem waiting to happen: If one of their children passed away before them, then that child’s own children (the client’s grandchildren) would not receive a share of the home and the surviving daughter would take the whole. This was not their intention. The recording clerk doesn’t give advice or review the form for such concerns. And the change required meant that they had to pay twice by having to pay for preparation and filing of a new TODI.
In other circumstances, the property owner complicates how expenses, debts and taxes are to be paid by their children or by others who inherit the property. The TODI doesn’t usually spell out the specifics of how the beneficiaries will pay for and manage the property after they have become the owners. This often leads to fights among siblings or other beneficiaries, who argue over selling the property or keeping it (and being “partners”), or argue about who will pay for repairs, taxes and such. If one of the beneficiaries cannot afford the upkeep, taxes, etc., how will the expenses be paid?
There’s simply no faster way to create fights between children or other beneficiaries when leaving the home or investment property to all of them without expressing just how these issues will be handled. And if things cannot be worked out between them, then the only way to address this situation is by forcing a sale of the property through what is called a “partition” lawsuit in court. And the result is oodles of attorney fees and costs, with often a lower value as a result of a court-ordered sale, and more bad blood between the beneficiaries.
Is the alternative to a TODI expensive?
When reviewing all of the circumstances and the value of avoiding problems later, the answer, simply, is “No.”
By the time you pay for the creation of the TODI and for the recording fees, and you recognize the possible pitfalls using this planning tool, it is not much more expensive to either specify the gift transfer by Last Will and Testament (which you should have in any event – even if probate will not be necessary), or by using a living trust for this and other estate planning benefits.
Still not sure? Understanding the advantages and disadvantages of the TODI is deserving of a call or a Zoom video meeting with an attorney like Marc Sherman or Maureen Meersman. Contact us to schedule a discussion: https://mshermanlaw.com/contact/
In the world of Wills, Trusts and Powers Of Attorney (the central components of your basic set of Estate Planning Documents) there is no “one size fits all” approach. Our situations may look and sound similar, but when we get to the heart of things, everyone brings their own special considerations to their current and future plan.
Without a doubt, a basic Last Will & Testament and enforceable Power Of Attorney (POA) for healthcare matters and POA for financial matters are necessary for each of us. Depending upon what we own, and what activities of life and business we are embarking on, a living trust (sometimes called a revocable trust) can also be a worthwhile investment in time and expense.
As we grow and our investments and earnings increase. Our assets and our business and personal activities become diversified. And with that diversification, comes the need to plan for additional risk. Further planning and estate planning documentation is appropriate. But starting out, it is important to get the basics in place — and to do so as economically as we can.
If you are in your 30’s and 40’s, married or single, and with our without children, you should be creating the basic building blocks for your own protection and for the protection of those you care about.
Should I use an on-line document assembly program?
My answer is “no.” Do not use an on-line program that you’ve seen on in infomercials during late night television, or even if recommended by a friend.
The savings in time and cost that you think will benefit you, when compared to a simple estate planning package created with your lawyer, is simply not enough of a discount for what you give up. Artificial Intelligence or plug-and-play document assembly programs pushing out machine-generated documents lack a key component in the process. Communicating with your attorney gives you a broader perspective on how to use the tools available to protect what you have and how to use the documents created during the estate planning process when it is time to do so.
Everyone’s situation is different. So, the “off the rack” package stifles the opportunity to interact with your legal team. You should be discussing questions that you have, and addressing the personal, unique situations that you are involved with and that are deserving of attention.
Your legal team doesn’t simply plug in your name, the names of your representatives and beneficiaries, and the identification of some of your assets into a form document. Your lawyer and their staff focus on creating your unique estate documents with your special considerations and concerns in mind. Protecting those important to you, protecting the things that you have worked hard to earn or that have been passed to you by your parents and other family members, and knowing how you will be protected if something happens that keeps you from taking care of your health and your activities.
Your lawyer will have good, positive suggestions for dealing with your individual concerns and plans.
Many people are unaware that “custom tailoring” of Wills, POAs and Trust documents allows for greater planning now without significant additional current fees for the legal team, and often reduced future legal fees when the time comes to modify or expand your estate plan.
If you would like to discuss a customized set of estate documents to meet your needs, with creative cost and payment opportunities, reach out to Marc Sherman and the team at Marc D. Sherman & Colleagues, P.C. Contact us here: https://mshermanlaw.com/contact/
It’s time to finish up the dorm room arrangements, book deposits, and all other steps necessary to send your child to college. Don’t forget one of the most important preparations: simple, but effective Powers of attorney.
Yes, your college-bound child should now prepare and sign a power of attorney for healthcare purposes and a power of attorney for financial and other matters.
The Law: The Family Educational Rights and Privacy Act (or FERPA) is the federal law that provides certain rights for parents concerning their children’s education records. Your child who is over 18 or who attends a postsecondary institution at any age, becomes an “eligible student,” and that means all rights under FERPA transfer from the parent to the student.
State law considerations are also important. Once your child turns 18 years of age the law generally no longer allows you to act for them in every instance.
In plain language, when your child becomes a college student you no longer have a right to access there education-related matters. When the child is over 18, you also have only limited legal right to handle other financial and “property” related matters, or health-care related matters on their behalf.
Why is this important?
Without the permission from your son or daughter, that is memorialized by a properly executed Power of Attorney for healthcare, you are unable to access medical records, speak with and help to guide treating medical professionals, deal with medical privacy issues and, in extreme circumstances, deal with major medical and end of life issues. For many parents, this comes as a surprise during the first time they call to the student health services at their child’s school to try to facilitate review or transfer of medical records or medical treatment for their child.
For “property” related matters, the list of items and steps that may have to come into play is long and is in fact different for everyone. Filing a tax return, hiring an attorney to bring an action or defend an action involving your child, contacting the child’s employer, dealing with leasing and other housing related matters, assisting with management of bank and other accounts, and many other activities are all the subject of a properly created Power of Attorney for your child.
The practical importance of having these tools available for you to assist your child is clear. Another important benefit of creating Powers of Attorney is that your child can begin to understand the importance of planning for their lifetime activities. If you have further questions about planning as your child embarks on this important stage in their lifetime adventures, please reach out to Marc Sherman or Maureen Meersman of Marc D. Sherman & Colleagues, P.C.
Tax-efficient retirement planning is an important focus, and particularly for those who are at an age where they can reasonably work with their expert to implement strategies to acheive the best possible tax-free retirement income plan.
The focus on property-efficient life and asset planning is frequently overlooked while the tax-efficiency discussions are being created. But property-efficient planning is equally and sometimes more important.
No one likes to consider that our lives are fragile. Accidents, illness and debts are usually thrust upon us or upon our family members with little time to pivot and consider the short and long-term effect on our property. No one has, as it is said, the “crystal ball.”
So what do we do to acheive property-efficient life planning?
This series explores the many considerations that should be part of your discussions with your estate-planning attorney.
A start…
The best place to start is with a discussion about just what is a person’s “estate”. I am often confronted with the person who claims that they do not have an estate. They are of modest means and regular, but not to them “significant” property interests.
Everyone has an estate. We all have property interests of several types.
Your estate consists of all of the tangible and intangible things that make up your day-to-day existence. We have ideas and plans and information that we have gathered. Some of these are the subject of formal trademark, copyright, patent and other protections that are provided by statute and common law. These types of property interests are protectible and they have value, regardless whether they are the subject of current or future protections and filings. And the value may be or become nominal and unworthy of planning for future protection. But until that time, we need to talk about it.
You also may have businesses and business interests. These property interests are usually formalized by partnership or joint venture agreements or by stocks or other certificates. Or they may not yet be at a stage where they are included in formal agreements and entity registrations. So, some of these property interests are tangible and some are intangible. Regardless where we are at in the discussion, we need to talk about it.
We have rights created by contract – called, aptly, contract rights. The right to do or to get something, or to have the value of something or the value from some activity now or later. Think rights to royalties for songs or books written, rights to the use of our pictures or art or our own likeness, and rights to receive payment for something that we have created and that we are now or in the future going to give another the opportunity to use, for a price (or perhaps for free).
We have real estate interests. These are interests in real property of one sort or another. These include leases of real estate, title to all or a part of residential, commercial or other real property, and even interests in the real estate owned by another person or entity such as an “easement” or other right to use the other person’s real estate. And each of these interests have many actual or potential legal connections: the Condominium Association, the Landlord or Tenant, and the neighboring property owner, to name a few.
And, of course, there are all of the other “personal property” interests. Including, for example, furniture, equipment, jewelry, tools, automobiles and boats and other watercraft, and all of the other myriad ‘stuff of life’.
True. The person who leads a reasonably simple life and lifestyle may not have an “estate” with broad types of property interests. But they do have an estate nevertheless.
For most others, and not simply those who have become “successful” in their creation of wealth, judged by wealth, the scope of their “estate” becomes the important subject of discussion with their estate planning attorney.
Read on, as our series explores the many positive aspects of estate and property-efficient life planning.
In most cases using a Limited Liability Company (LLC) is a thoughtful step, whether you are investing in your own business activities, real estate or side hustle.
Limited liability.
Important words, for sure. The owner of an LLC, called a Member, is shielded from personal liability for acts of the LLC and its other members. Creditors seeking to collect amounts owed by the LLC cannot pursue the personal assets (house, savings accounts, etc.) of the LLC Members to pay business debts.
There are exceptions, for sure. For example, if the Member signs a personal guaranty agreeing to pay the LLC’s obligation (such as a Lease guaranty), or if the Member commits a fraud in the course of dealings with another. And, in some instances, a federal or state statute may create a potentional personal liability for the Member (think about certain wage and hour responsibilities to employees or environmental liabilities under the environmental protection laws).
But in the main, the limited liability “umbrella” as it is called will shield the LLC Member in much the same way that the corporate veil of liability protection applies to a shareholder.
Flexible Management Structure.
A positive aspect of utilizing an LLC that is specific to this type of business entity is flexibility.
The LLC Members have a variety of options for the management structure and they can usually be quite creative. Control over LLC business operations ultimately rests with the Members. But the LLC Operating Agreement can be developed with the cooperation of your LLC Attorney to provide that the day-to-day Company activities will be controlled by a Manager.
Think of the Operating Agreement in the same way that the ByLaws of a corporation identify and define its business operations.
An LLC can be managed by Members or non-Members; by persons or by other business entities. Whether you have a few owners wanting to run the LLC’s business together, or many owners involved in the LLC operation, the flexibility to set up the LLC management is a plus.
This is why the LLC structure is sometimes used for family businesses, where the parents look to maintaining management control and provide financial participation to the children, as Members. Management control and transfer of Member Interests to the next generation can be used to assist in a variety of issues that are often unrelated to the LLC — from tax planning, estate planning, easing new family members into the business activities, and more.
Creative Approaches To Financing And Ownership, Including Ownership Transfer.
The ownership interest of an LLC Member (called the Member Interest) has two broad aspects, and they can be separated in full or in part. The Member’s financial rights (requirements to supply capital for operations and the right to receive distributions from the LLC activities, for example) are able to be separated from the second aspect of the Member’s Interest — the interest in management rights and participation in Company activities.
A Member’s financial rights, including the right to participate in profits and losses and to receive distributions can be designed to work as the Members decide and as they provide in the Operating Agreement. Will only one Member be providing the most substantial part of the financing for the business? Depending upon the circumstances, this Member may receive a repayment of some of their funding before other Members receive distributions. Perhaps, as well, this Member will not participate in making decisions about the day-to-day activities of the Company. The LLC should be tailored to the needs and realities of the business and owners.
A Member’s Interest in the LLC is personal property of the Member and the LLC Act in Illinois provides that those rights may be transferred without restriction.
But it is beneficial for the new LLC Members to know that the Operating Agreement may include restrictions on how a Member’s Interest may be transferred (sold or gifted) to another person. Some of the requirements under the LLC Act, like the transfer of an ownership interest, can be tweaked. So there can be a right of first refusal built into the LLC documentation, requiring the Member to first offer the ownership interest for sale to other Members before selling or gifting the Member Interest to another person. Likewise, the transferee of the Member’s Interest, depending upon the circumstances, may be restricted from participating in the LLC business activities and may only become a financial interest Member.
These concepts can be used to create important limitations in the event that a Member is sued or has to file for bankruptcy. We never hope that this comes to pass, but if it does and if the Members have planned properly, there will be useful limitations on what a creditor or bankruptcy trustee can do. And that helps the business to avoid an unfortunate situation.
Starting a business with others without using an LLC, by comparison, leaves the partners exposed in many ways: Each partner in a general partnership is personally liable for the debts of the partnership. Therefore, the law provides that the partner’s personal assets can indeed be reached by partnership creditors. Ouch! In the partnership scenario, each partner has the right to participate in the business operations, and the right to receive a ratable share of profits and losses (regardless whether the partner’s day-to-day participation may be more or less than other partners). And each partner has an equal right to control the partnership business by their vote.
We can see how the LLC protects the participant’s personal assets from LLC debts. And using the partnership example we can also see how the LLC Operating Agreement can be designed to refine and define each Member’s participation interest in the business. So information flow to some Members may be tailored to the specific circumstances, decision-making by some Members may be limited to significant decisions (such as a sale of the business or substantially all of the business assets, or the hiring of highly paid managers or officers), and participation may be expanded or limited in other ways. Flexibility is key.
Transparency Of Members’ Outside Interests & Activities.
The participation by Members can be specified in the Operating Agreement so that some of the Member’s own activities will be clearly described and transparent. Imagine that one Member is involved in other activities (for instance, a software developer client who was recently becoming involved with one of my client LLCs), and that Member wants to be certain that other participants in the LLC business do not have a claim to her separate development and app creation activities for others who are not clients of the LLC.
Another real life client example from our office real estate representation archives, is the use of the Operating Agreement to ensure that a Member’s outside activities were clearly her own. The Member, who is involved in other real estate development opportunities (she is an active real estate broker who frequently gets leads for new properties and new development opportunities) wanted the new LLC Operating Agreement to clearly state her understanding that she did not have to share all of her future opportunities and listings outside of the newly created real estate development with other Members or the LLC.
Pass-Through Taxation.
An LLC entity can be created so that it is effectively a disregarded entity for tax purposes, sometimes called a “pass-through” tax entity. This means that LLC gains, losses, income, deductions and credits can flow-through to the Members and be reported on their personal income tax returns. Taxes can therefore be paid at the Member’s individual tax rate. In this scenario, the LLC is not subject to being taxed at the corporate level like a regular “C” corporation.
Other Benefits.
There are other benefits of using an LLC, even if you are the only Member at the start. Talk with your LLC Attorney to understand how an LLC works, how it can benefit you and your business, and whether there are any downsides that you should consider. And be thoughtful and do your homework — LegalZoom and similar on-line LLC creation tools will not explore all of these considerations in the same way that an LLC Attorney will do.
Attorney Marc Sherman is available to review the creation and use of the LLC with you. Reach out to schedule a time to discuss: https://mshermanlaw.com/contact/
Thinking Of Transfering Your Parent’s Home To Avoid Creditors? Think Again.
There are many scenarios, but the creative client’s plan often looks like this:
Andy is a good son; an only child. He’s 55 years old, helps his 78 year old Mother Peggy with house chores since Peggy’s divorce some years ago, and Andy hangs out with her several times a week even though Andy lives about an hour and a half away and the drive after work is not easy.
Peggy’s home in Illinois is almost fully paid (she still has a mortgage of about $75,000 on the home worth roughly $300,000). But Peggy’s real estate taxes and homeowner and auto insurance have recently hiked up. Peggy is just barely making ends meet on her social security and few companies will hire her at 78 years of age.
Peggy has pushed her credit card balances to their limit; routine expenses and some trips to the Mall for clothes and such, but she has only been able to pay the minimum amount to keep the CC’s in place. Doctor visits are starting to be more frequent, making it clear that Peggy could soon be in serious debt with no way to get out other than by selling the Home and trying to find a new place to lease. That’s tough, because everywhere Peggy looks the rental rates have jumped significantly.
Peggy has been talking about bankruptcy — it looks like a good alternative based upon the late night TV ads. But Andy told his Mother that he heard that if Peggy files BK she would have a hard time getting future credit or a home equity line of credit. And he also explained to Peggy that filing BK might result in the loss of her the equity in the Home if the Bankruptcy Trustee requires her to sell the home to pay her creditors (this might not be the case in Florida or other states where there is a 100% homestead exemption in a home, but Illinois has a much smaller exemption).
Andy is right. If Peggy files BK or if she is sued by a creditor then the equity in her Home is at risk of being taken and sold for the creditors.
So Andy came up with a different plan…. Andy will “buy” the home from Peggy for a chunk of money, but it will be far less than the present value of the Home. Andy hasn’t figured out what to do with the mortgage and the real estate taxes that have accrued, or for that matter the insurance and even future upkeep.
Under Andy’s plan, Peggy will still live in the Home. Maybe she will pay a nominal rent if she can afford to do so. Andy tells Peggy that using this plan she can “protect” the value in her Home, and if Peggy gets sued later or really does need to later file BK the Home will no longer be taken because it will not be not be in Peggy’s name.
Sounds like a good strategy, right? Maybe. But it’s risky.
The Illinois Appellate Court reminded folks thinking about this type of work-around that there are big legal concerns when they try to move assets away from creditors in this way. On June 14, 2024, in the case of Pentagon Federal Credit Union vs Poorian, et al., found at 2024 IL App (1st) 221803, the Appellate Court reviewed a decision involving the transfer of a debtor’s assets to others and the timing of the transfers and the lawsuit to try to recover them.
Poorian was in the taxicab business and it turns out that after having trouble trying to restructure his debts with his credit union lender and seeing the writing on the wall Poorian transferred his interest in real estate and other property to some friends.
The credit union brought a lawsuit against Poorian and his friends looking to recover the transfers or the value of the transferred properties. The credit union used the law of fraudulent conveyances which provides a mechanism for reaching the value of the property transferred by a debtor so that it can be applied to pay the debt owed by the transferee former owner.
Years ago Illinois adopted the Uniform Fraudulent Transfer Act (the UFTA). The Act puts an important tool in the hands of creditors by allowing them to ask a court to void a transfer that was made by a debtor like Poorian for less than the fair value of the asset, or in situations where the transferee debtor’s transfers had the effect of causing him to become insolvent and unable to pay his debts as they come due. Fraudulent intent to avoid creditors is not always required under the UFTA.
The UFTA is found at 740 ILCS 160/1 et seq. The federal Bankruptcy Act has a similar fraudulent transfer statute and a BK Trustee may use either the state or the federal version where one or both are available as a tool for recovering property for the benefit of creditors in the BK case.
Poorian argued to the Illinois Circuit Court that as to some of the transfers he had made while he owed money to the credit union, the action to recover the property was too late. Poorian’s transfers were made years before they filed suit the lawsuit, he said, and since the credit union’s case was filed more than 4 years after some of the property deeds were executed they could not be reached. The Appellate Court got involved because the transfer deeds were not recorded in Cook County immediately after they were executed, and if the date of recording was the date of transfer then they were within the 4 year look-back rule of the Illinois UFTA. The credit union argued that the date of recording was the key, not the date when the deeds were signed.
As to other property transfers, Poorian and his friends argued that the transfers were clearly made longer than 4 years before the lawsuit was filed. The statute of limitations, Poorian and friends urged, was a complete defense to the credit union efforts to reach for the transferred property or its value.
The Illinois Appellate Court ruled in favor of the credit union. As to the argument that the transfer deeds were signed 4 years or more prior to the date when the lawsuit was filed, the Court held that it was the date of recording of the RE transfer deeds and not the date of execution of those deeds that is the key. There may be some exceptions, the Court noted, but the exceptions did not apply to the transfers by Poorian to his friends.
For the other property transfers the Court considered the credit union’s argument that although the property transfers were made 4+ years prior to the lawsuit, the transfers were fair game because they were not discovered by the credit union until a time within the 4 year period of the UFTA. The UFTA provides a ‘savings provision’ that gives the creditor the opportunity to reach a transfer if the creditor brings its lawsuit to bust the transfer not later than one year after the transfer was or could reasonably have been discovered by the creditor. The credit union succeeded in its effort here again. The Court held that the one-year period begins to run when the creditor knew or should have known of the fraudulent nature of the transfer.
There’s alot more to unpack. But you get the picture.
Timing is everything — particularly where the transfer of property is for less than its fair value (and particularly where the transfer is to a friend or family member).
So what is the concern for Andy’s plan to move Peggy’s home to his name?
The transfer of Peggy’s Home to Andy for less than its fair value may not be a problem if there are no creditors at the time of that transfer. But if Peggy is unable to pay off her credit card debts and one of those companies sues Peggy to recover the transfer or its value within 4 years after the Home transfer to Andy is recorded in the county records, the credit card company could be able to reach back and unwind the transfer. If Andy paid his Mom the fair value of the Home, there would be no fraudulent transfer discussion necessary, assuming that the value was in fact defensible. But where Andy’s plan causes a concern is that he was unwilling to pay Peggy the fair value of the Home at the time of the deed transfer.
To be sure, there are other considerations as well, and those issues require Andy and Peggy to have a talk with their Attorney:
Once Peggy transfers the Home to her son there may no longer be an opportunity to have a homestead exemption for real estate taxes (Peggy is no longer the owner and the Home is not Andy’s residence). And the same goes for the Senior Exemption or the Senior Freeze that may be available to Peggy for the Home in order to reduce her real estate taxes further.
Also, in Andy’s hands the Home is an investment property and not his principal residence. So it may be more expensive to bind homeowner’s insurance than it would otherwise be.
Another concern arises due to Peggy’s age. She is now healthy, but what if Peggy needs to seek Medicare eligibility in the future. The 60-month lookback rule for purposes of Medicare eligibility is often a topic in the paper, right? And for good reason. We are reminded that if Peggy needs to have Medicare pay for nursing home, medical and other out-of-pocket expenses, the transfer of her Home to Andy will be scrutinized and eligibility may be denied (or at least delayed) if Peggy’s application is less than 60 months following the recording of the Home transfer. A knowledgeable Attorney will be able to review your situation and your plan.
There are alternatives, but buying an hour or more of your Attorney’s time for a thorough review is money will spent.
Reach out to Marc Sherman to schedule a time to review the situation.
Of Course, And You Can Try To Diagnose Your Own Illness, But That Doesn’t Often Come Out Well, Right?
There Is No LegalZoom® Module For Representing You When Selling Your Home – For A Good Reason
In Illinois, as in most jurisdictions, there are a variety of laws and legal considerations when selling any real estate. Particularly your Home. And the Real Estate Attorney is in the key position to assist with every situation that the Homeowner may face.
Having your Attorney lined up to back you up for the sale of your Home is not just a really smart idea. It’s a VALUABLE idea!
In life, timing is often everything. When you connect with your Real Estate Attorney because you are deciding to sell, you have an advantage. The Attorney can help you to collect the Home information that your broker will need for the listing, and help you to review the listing agreement and understand what it means, and discuss some of the key contract issues that you can expect to deal with.
The Real Estate Attorney will also help you by raising issues that most of us haven’t even considered until after the sale is concluded. Are you purchasing a new home and, if so, how will that be accomplished in light of your asset plan and your Estate Planning goals and the timing of this Home sale and transfer of possession? Will there be tax reporting considerations for your sale? Do you need to be concerned about other issues, such as recent flooding or other repair/remodeling issues?
If you decide to wait for a detailed Attorney-Client discussion, then be sure to plan for you or your Real Estate Broker to connect with your Real Estate Attorney as soon as there is a contract offered to you.
Your Attorney can assist when your team is evaluating the Contract Offer. The Attorney can also be sure that you understand some common, but very important, timing considerations. Like the home inspection contingency, the mortgage financing contingency, what personal property you have or the buyer has asked to be included in the Home sale, and your closing and possession dates, and more.
And your Real Estate Attorney will review and discuss your expenses (not just attorney fees): The Real Estate Broker commission, the costs of the owner’s title insurance policy, survey, inspections (sometimes Seller-side costs for termite inspection or sewer inspection or radon inspection), the costs that some local communities add as Seller-Paid transfer taxes (Chicago is a BIG one!), and other expenses. And what if the Buyer is obtaining FHA Financing? There may be considerations there for you as the Seller, too.
The Real Estate Attorney can help you to review a “net sheet” so that you can understand what your bottom line will really look like. And she can help you to explain it to your spouse or significant other, and your children!
Of course, your Real Estate Attorney will prepare for reviewing with you the Home sale documentation, and follow through with the Closing through the title company.
Do you have a Unique Home Sale situation? For sale by owner or installment contract sale or perhaps a swap? Will this be a lease with option to own? Or are you considering transferring the Home to your children? For the unconventional situations, your seasoned Real Estate Attorney can guide you through the process.
Are your circumstances different because you are the Seller, but not the title owner of the property (for example, the Home is in a trust or part of a Parent’s Estate or Estate of a family member)? These situations call for additional discussion and a thoughtful approach by an Attorney who is familiar with the specifics.
Before you put up the “For Sale” sign, pick up the phone to your Real Estate Attorney.
Marc Sherman and Maureen Meersman and the support team that they each work with have been representing residential real estate sellers for many years. They can assist you with your Home sale in these ways, and more.
The Estate Planning Competence Matrix here will help you maximize your planning, or maximize your Parent’s planning if you are looking for a productive way to approach the considerations and the helpful Estate Planning materials that you should be considering.
The basic considerations and information gathering (below the line). Where you are or should begin:
THE INFORMATION ZONE
Nobody likes to do this, but taking stock is the key to success above the line on your journey to Estate Planning Competence!
Start with information gathering. You and your Attorney need to know the complete asset and property picture, as well as the current personal information and background. An Estate Plan cannot be derived in a vacuum. Well, it can, but it would likely leave unnecessary holes and fail to produce optimally effective documents for you and for your Estate Executor or Living Trust Successor Trustee.
Gather the following documents and information:
1. Copies of insurance binders or information concerning insurance policy numbers and insurance company and rep/agent (with phone number) for policies now in force. This includes Homeowners/Auto (is there an umbrella policy?), Life (term, whole, variable; who are beneficiaries; face amount), Health and Disability Insurance.
2. Information concerning major personal assets:
A. Copy of title for autos, boats and other titled vehicles;
B. Real Estate Properties Owned (pull copy of deed for home residence, investment properties, timeshare interests, and leasehold interests);
C. Account information, including all financial, stock, bank and other accounts (and estimated value); Identify if any of the accounts are jointly owned with others, or if you have given permission to other persons to sign and authorize transactions for the account;
D. If not included with the other account information, list 401k, Pension, Annuity, IRA, CD and similar accounts and whether beneficiaries have already been identified for those accounts;
E. Bonds, stocks held in “street name”;
F. Other significant assets (include jewelry, antiques, collections, cryptocurrency, intellectual property assets such as patents, copyrights, and options to acquire assets or business interests).
3. Information concerning any businesses or business interests owned by you. Identify others who own an interest in the business; Is there a buy-sell agreement, shareholder agreement or operating agreement (for an LLC) controlling transfer of interests/shares during lifetime or at death?
4. Information concerning major current liabilities, such as a recent mortgage statement, or business guaranty or lease guaranty information. Are there any personal loans from others to you or from you to others? Auto financing or auto leasing information, including a copy of a recent statement.
5. Include copies of other documents not already identified, such as:
A. Copies of birth certificates, for you and your spouse or partner, and children; as well as adoption records for adopted children;
B. Copies of death certificates for spouse, children;
C. Information concerning military service and discharge;
D. Information concerning important memberships (are you entitled to death benefits, pension-type accounts if any, etc.?);
E. Copies of burial plot deed, contracts for perpetual care for you and for relatives for whom you have responsibility to oversee those issues; cremation and other plans and contracts made (if any); and
F. Significant Agreements and Contracts: storage/warehouse leases, USPS or UPS Store box rental agreements, Safe Deposit Box rental agreement, and employment agreement or independent contractor agreement, and others.
6. And, if this Estate Planning Competence review is to update your previous considerations and documents that you have implemented or considered implementing, including copies of prior Last Will & Testament, Living Trust, HIPAA Authorizations, Living Will Declaration, Power of Attorney for Health Care and Power of Attorney for Property, and other documents that may have been drafted for you and signed by you.
THE IDEA ZONE
Here, before putting pen to paper for formulate the Estate Planning ideas with your Attorney, begin to identify some of the key people who will play a role in your plan – both now and after you are no longer here. This means that you will start to point to the following persons and information:
A. Contact information for spouse (domestic partner, significant other), children, parents and siblings;
B. Religious affiliation, religious leader’s name, city/state and phone contact;
C. Insurance agent(s);
D. Accountant/tax preparer(s);
E. Primary physician/internist/obgyn;
F. Business partners;
G. Property managers/caretakers;
H. Veterinarian (and identify pets); and
Make your notes for answers to the following important questions:
Are there any health or other conditions affecting you, your spouse or significant other, or your child or parent that should be discussed (even if the condition is not now presenting itself)?
Who will be the guardian for minor children if you are unable to care for them?
Who will take care of an aging parent or other person that you care about?
Who will make healthcare decisions for you if you cannot make those decisions for yourself? Have you considered at least one alternate who could act in that role for you?
Who will make property-related decisions for you if you cannot make those decisions for yourself? Have you considered at least one alternate who could act in that role for you?
Lastly, for this pre-discussion/pre-documentation stage, have you heard about Wills, Trusts and other Estate Planning Tools that you believe you may want to explore? Have friends or family members mentioned their use of a life insurance trust, special needs trust, transfer-on-death-instrument or other mechanism? Be sure to be ready with your questions, even if you are not sure whether those items may not ultimately be for you.
You are now ready to consider those Estate Planning Competence items that are above the line:
THE GROWTH & DRAFTING ZONE
Here, you will meet with your Attorney. A call or remote Zoom video conference may be worthwhile before a first face-to-face meeting. Your Attorney can understand the information that you have gathered, can be mindful of the timing of your planning (including any outside pressures that need to be considered). And, together you and your Attorney can identify any worrisome issues (such as, perhaps, a pending or anticipated divorce, or the illness affecting a child or significant other, or the loss of home or business or employment).
Your Attorney is there to share the good and the bad. Setting expectations for what your Attorney can accomplish and when is an important part of the journey.
Your Attorney will discuss a proposal for the type of Estate Planning materials will be beneficial to accomplish your goals. You will agree on the timeline for preparation of the materials and the fees and expenses to be expected. You will, as well, identify any additional documents that are necessary or useful for the Attorney’s work for you.
Then comes the important step of reviewing the Estate Planning documents prepared for you, tweaking those documents to ensure that they are ready for signature, and arranging for and executing the documents.
OK, you are reaching an optimal level of Estate Planning Competence! You are ready to take the next step on the journey:
THE SWEET SPOT
Here, you know you have reached an optimal level of readiness and planning when you have stepped ahead to do the following:
Assemble your Estate Planning personal resource. You will be pulling together into a central location (a “hard” file or a digital file) with your important Estate Planning documents and the materials that you have gathered in order for your family to be best able to assist you in the event of an illness or injury or other event. Discuss with your Attorney the use of a cloud service account (DropBox, Box or other service shared account) where you can securely maintain your important documents and information.
Fund your Trust! If you have decided with your Attorney that a living, revocable trust is going to be part of your Estate Plan, then you will take the next steps for the funding of your trust. Your Attorney will provide for you a Certification of Trust and provide guidance for your next actions with accounts, property deeds into trust, and other important functions.
And, don’t forget that the Sweet Spot is forward-looking: You will review regularly any questions that you have, changes that may be necessary because of significant life events for you or your family members or others close to you, and review your Estate Planning documents and the people that you have selected to act in important capacities for you (usually every 12 to 18 months).
Attorney Maureen Meersman and Attorney Marc Sherman are available to discuss your own Estate Planning Competence, or to address concerns that you have with your family member or significant other who need help to focus on their own Estate Planning questions and concerns. Our Contact Information is available here: https://mshermanlaw.com/contact/
Decide if you want your Attorney to be an expensive pitbull or a thoughtful advocate.
In litigation or in a transaction, you and your counsel may find that the attorney on the opposite side is less than cordial. Personalities being what they are, this is not unusual and typically not a problem for the practitioner who is used to dealing with multiple personalities. Diverse experiences, diverse cultures and a multitude of styles are the norm in the practice of law, not the exception. Creative arguments, creatively expressed, is often the hallmark of a skilled attorney.
Issues unique to the practice of law will often seep into the activities at hand. Most lawyers have an ego. This is good, as it is useful when necessary for the attorney to be a zealous advocate for the client. But it is often the case that large egos need to be fed or flattered, and sometimes the ego-driven lawyer needs to “win” every court battle and needs to win every comma, semicolon and clause of the lease or the contract.
Then there’s the fee conundrum.
When an important deal is being negotiated, or a case is being litigated in court, several concerns may arise that put a spin on the issue. The saying “Time Is Money” has a real meaning for the lawyer and client, because in many instances the attorney fee relationship is based upon an hourly fee agreement. The need for unnecessary dialogue, court appearances or document drafting (and re-drafting) that result from a troublesome opposing attorney can become, well, tiresome to the attorney and financially frustrating to the client.
Does the client expect to be billed for the back-and-forth? Or does the client expect that their attorney will take the high road and pick the battles carefully? Some clients want to battle as much as the pompous lawyer on the other side, but later do not want to pay the additional hours for the experience! Attorneys will fight to every last drop of the client’s money, if that is the client’s direction. Cents and sensibility often win out.
Is there a strategy that can accomodate all of these considerations and turn lemons into lemonade? Most times the experienced attorney can do so.
The seasoned attorney knows that if the situation is made known to the client early and often (without whining), then the tactful display of fending off the offensive lawyer can be a boone to the attorney-client relationship. The attorney can demonstrate to their client a greater familiarity with the area of law, can demonstrate their strategic use of legal tools and practical experience, and can even display the attorney’s enhanced problem-solving skills. In court cases, every attorney knows that you win some and you lose some in the continuing press for the settlement or verdict, and if the client is properly advised then the client’s expectations and own feelings will often be reasonably addressed. The result is frequently a more solid attorney-client relationship and a mutual respect for the way that the situation was handled.
Then there is the occasional time, when the bombastic opposing lawyer demonstrates in living color in the courtroom or the conference room, and perhaps even in the presence of their own client, that the lawyer’s style (or personality flaw) and the absence of a volume button has done a disservice to their client. The lawyer cannot stop. They need to have the last word. The lawyer cannot realize where their excessive argument has taken them because their personality must view every encounter as a cage match where the opponent (or Judge) needs to tap out as sign of total defeat.
The lawyer is too wound up in their own bluster to see that those with them in person or on a zoom video conference, with others present (including their own client), are rating the argument a 5 out of 10 but the lawyer’s tactics and presentation a minus 3!
Even if the Judge or others in the encounter select their words and approach to mollify the bombastic lawyer, you know and your client knows and even the opposing lawyer’s client knows that the arrogant, blustery lawyer has lost.
When I see or hear of these situations, it is in that moment that I know what was meant by a thoughtful attorney who aptly explained to me forty years ago when he said to “be careful not to snatch defeat from the jaws of victory…”
Alternative Fee Arrangements Are Useful. And We Use Them.
The typical lawyer billing model uses hourly billing for Attorney time and Law Firm Staff time devoted to the case or project.
The Hourly Billing Model is typical.
Each hour or fraction of an hour that the Attorney or Staff spends on the client project is included in the Attorney Invoice. Usually, this is at a quarter of an hour increment or a one-tenth of an hour increment. “Billable” time includes all time spent, such as communications with the client or others, research, document preparation, time for court or other activities (including in most instances travel to/from the location of the project).
Have you discussed with your Attorney the use of a Flat Fee Billing alternative?
This method uses a value-based approach to Attorney services by fixing the Attorney fee to the type of service. For example, Marc D Sherman & Colleagues PC often provides Flat Fee Billing rates for Client projects such as: Preparation of Wills, Trusts and other Estate Planning materials, for creation of a business entity like a Limited Liability Company or other Business Corporation, for residential real estate transactions, for Deed Transfers, and for other projects.
Using Flat Fee Billing sometimes includes the out-of-pocket expenses involved with the project, like filing fees or recording fees. But the regular practice at our Law Firm is for the expenses to be invoiced separately from the fee charged to the client. Ask your Attorney what those expenses may be and how they are paid.
Contingent Fee Billing May Be Applicable In Some Circumstances.
In some cases, usually certain types of litigation like personal injury cases, the use of contingent fee billing is arranged in order to provide the client with a reasonable basis for the Attorney Fee that is related to the results of the case. In this way, the client may only be responsible, say, to pay the Attorney a fee based upon one-third of the award to the client. At our Law Firm, the nature of our work does not often include cases where Contingent Fee Billing is appropriate.
You should review contingent fee billing agreements carefully. Is the fee payable when the award is announced? Or is the payment of the fee contingent upon the recovery of the award in collection.
Hybrid Billing Arrangements May Be Worthwhile For Both Client And Attorney.
The Attorneys at Marc D Sherman & Colleagues, PC may suggest that a hybrid billing agreement is advantageous for both the Law Firm and for you.
Consider this example: You and two friends are looking to create a new LLC entity. An agreement may be made with our Law Firm for the organization of the entity for a flat fee billing rate, and then for an hourly billing rate to be applied for representation for the creation of the Operating Agreement due to extensive work among the several new LLC Members who require a detailed Member agreement for buy-sell purposes or to include other protections to be negotiated between the Members and memorialized by the Attorney.
In that example, hourly billing may also be appropriate for creation of the new LLC business policies, employment agreements, independent contractor agreements, or contract terms and conditions appropriate for the type of business.
Get it in writing, including the Attorney Retainer Deposit.
You should expect that the Attorney-Client Engagement, including the billing agreement, will be in writing. The Engagement agreement and the fee discussion should be understandable. Ask questions, so that you are sure that you understand the Law Firm expectations and your own responsibilities.
In most instances, Law Firms expect the client to deposit a retainer payment. This is an advance deposit that will be applied to the services and expenses for the client’s case or project. There are different types of retainers, so ask the Attorney to explain the reason for the retainer, where the retainer will be deposited, and how the retainer will be applied to legal services and expenses.
And Don’t Forget That The Fee Agreement May Need To Be Modified.
It is appropriate for an attorney to modify a fee agreement under certain changed circumstances. This means that our Law Firm may reasonably suggest a change to the fee agreement in situations that are understandable: For example, if the nature of the case or project changes significantly because of outside or unexpected forces or because of the client’s directions. Or, if the client’s own circumtances change, such as a business entity organization that begins as a single-shareholder project and turns into the organization of a multiple-shareholder project.
The Attorney Fee Agreement will often anticipate changes in circumstances, such as changes in the Attorney’s hourly rates over the life of a case that may take years to complete. But even if these changes are not specifically anticipated, changes are appropriate as long as they are reasonable under the circumstances.
Check Out Limited Scope Representation or Unbundled Services.
There are times when the client’s needs are only related to certain limited elements of the legal project or case. For instance, in a small claims case, the client may want Marc Sherman to only provide certain services – like preparation or review of the Complaint to be filed, or assistance with preparation for a motion to be presented in court or for a trial that is scheduled to take place.
Sometimes the client wishes to hire Marc Sherman to only handle parts of a court case, like contested motions or pre-trial or trial aspects of the case. The Illinois Attorney Professional Rules allow Attorney Sherman to file a limited appearance in the court case, and the Attorney Fee Agreement will set out the basis for the Law Firm billing and the expenses. The Fee Agreement will also identify the limitations on Attorney Sherman’s responsibility for the elements of the case.
Next steps? Attorney Fees and Billing can be confusing for even long-standing clients. If you have questions about Attorney Fee Arrangements, alternative billing approaches or other considerations discussed here, or if you have an agreement with another Law Firm that you feel should be reviewed, reach out to Marc Sherman by phone to (847) 674-8756 or by email to msherman@mshermanlaw.com.
Best Advice May Be To Remove Child From Mom’s Will And Trust
Losing a child is devastating. Losing a child because they no longer connect is even harder according to practitioners like Batya Swift Yasgur, MA who have observed the data and the anecdotal evidence in their clinical social work practices.
Heartbreak. That’s what Estate and Trust Lawyers see in the faces of Parents who have become estranged from their children. The reasons may be known or unknown. But the scars and the trauma are the same.
One Mother tells her story: Son Jerry moved away years ago. At first Jerry answered Mom’s calls and sent a card on Christmas. But that ultimately became a rare occasion. Then Jerry stopped returning messages on his answering machine. It has been years since the last letter (Mom doesn’t email). And worse yet, no interaction with Mom’s grandchildren; Jerry’s kids don’t connect either. It has been over 10 years.
Mom’s other two children, both younger than Jerry, couldn’t fathom what was going on either — Jerry had stopped reaching out to them too.
At Mom’s appointment to review her Last Will and Testament and her Living Trust that was made years earlier she said: “I don’t want to give money or my house to Jerry when I pass away.” But Mom felt bad leaving Jerry nothing.
Mom had heard that Jerry could cause problems for her two other children after she is gone and that perhaps leaving something in her Will for Jerry would placate him.
Is there a good, better, best way to handle this situation?Read On:
The Do-Nothing Approach Solves Nothing.
“Maybe I should wait,” says Mom. Sure, things could change. But since it has been more than 10 years already, is that truly going to happen? No. Life experiences tell us that Jerry may reconnect if he needs money, or maybe if he needs someone to care for HIM!
Waiting can be a disaster. If later Mom loses the ability (or as Estate Lawyers say, the capacity) to change her Will and Trust, then the opportunity for making changes is limited or unavailable. In fact, if she waits and something happens to Mom before she can change her Will and Trust to confirm her desire that her other two children should received her bounty, the other two children will become resentful of Jerry’s undeserved windfall and disappointed with Mom for not matching her gifting to her emotional directions. There will be little chance of reconnecting Jerry and his siblings, and the nieces and nephews.
Instead, Mom should know that directing her Estate Lawyer to make her Will and Trust changes now is positive: It allows Mom to begin to accept the reality of Jerry’s actions, and to continue to make efforts to encourage Jerry to reconnect with his family. And, Mom can later make changes if the family relationship with Jerry mends.
Instead of “Do-Nothing,” Mom is encouraged to be proactive and protective.
Cutting The Will And Trust Cord May Be The Best Action.
So, Mom decides to change her Will and Trust to match her feelings and to protect her other children and to be true to her own feelings. Jerry, she still believes, should get something when she passes — she does not want to leave him nothing. What does she do?
Considering what Mom should do, says Estate Planning Attorney Maureen Meersman, requires being thoughtful of the consequences for Mom’s Estate, and understanding the law.
If Mom wants to make a gift to Jerry, no matter how small, “I would tell her to make Jerry a beneficiary of an account or life insurance policy or set up a bond in joint ownership with him.” Meersman says. “But, unless there are worthwhile reasons to do so, I would not recommend including Jerry in the Will or Trust.”
Providing for Jerry in Mom’s Trust, Meersman explains, then allows Jerry to participate in the Estate and Trust in ways that Mom could not imagine. Jerry would be entitled to receive trust documents and be able to see how the other children are treated. And Jerry would also be entitled to receive information concerning the trust assets, even if the distribution to him was nominal.
Using Meersman’s approach, at Mom’s death Jerry would receive the beneficiary gift from the asset specifically set aside by Mom. Jerry’s ability to inject himself into the Trust Administration would be restricted. And if Mom needs to make changes in the future, she can.
Separately, Meersman would confirm the terms of Mom’s pour-over Will to her Living Trust. If Trust Funding is thoughtfully accomplished then Probate Court administration is likely to be unnecessary, and Mom’s property can be distributed in the way that she wants to take place for the other children and grandchildren.
Attorney Maureen Meersman, who has extensive experience in Estate Planning and Probate matters, has just joined Marc D Sherman & Colleagues PC in a special “Of Counsel” capacity. For more information, check out our announcement: https://mshermanlaw.com/about-us/
Maureen can be reached for questions and to set up an appointment by contacting her at atty@meersmanlaw.com.
Wire Fraud is on the rise and is a very real threat. Marc D Sherman & Colleagues PC and its Of Counsel Attorneys and staff spend significant time representing residential and commercial buyers and sellers in a variety of real estate transactions. Our Firm typically does not send wire transfer instructions for external purposes, such as real estate earnest money deposits or for funding real estate closings.
If you receive an email from our office including wire transfer information, call and confirm that it is intentionally sent by us and that the information is accurate BEFORE using the instructions.
If Wire Transfer Instructions are provided to you by a third-party, such as a title company or lender, it is recommended that you (1) confirm that the email is from a legitimate, authorized source, and (2) if so, then follow the steps that are stated in the email communication in order to ensure that the communication is legitimate and to confirm the instructions are valid, or contact our office.
For further questions, you can reach one of our Attorneys or staff at the Contact Information shown in this website.
The Attorney’s Role In Filing Your Limited Liability Company’s Illinois Annual Report
THIS IS TIME-SENSITIVE! The State of Illinois Domestic Limited Liability Company Annual Report discussed here is issued once a year and it is important because it involves your business corporation’s continued good standing status in Illinois.
Your Registered Agent has received Annual Report Form. It must be completed each year for your LLC. If it is not filed, there can be late-filing penalties, and eventually the LLC may be involuntarily dissolved. The costs to seek reinstatement can be significant.
When must the Annual Report be filed?
The Annual Report must be filed by the deadline that appears on the upper left-hand corner of the form.
Can you file the Annual Report on your own?
Yes. You can reach out to your Attorney to assist you, or you may access the State of Illinois Business Services Division portal and submit the Annual Report on your own in most cases.
If you would like Marc Sherman to file the Annual Report for your LLC, do the following:
> Review the Annual Report form that you received and confirm that all of the information is still accurate, including spelling of names, addresses, and other information. Inform your Attorney of any changes during the past year prior to the filing with the State of Illinois, including any changes to your LLC Members, issuance of new Member Interests, and changes to the management of the LLC (have you decided to be a “manager-managed” LLC or a “member-managed” LLC or changed the Manager identity?).
> Notify us at least ten (10) days prior to the Annual Report filing deadline that you would like Marc Sherman to file the report on your behalf.
> Provide us with the payment information for the attorney fees and out-of-pocket expenses (this will be provided to you with the Annual Report Form). We will process an e-check or a credit card payment through an Attorney-approved, secure on-line payment portal.
> Confirm your agreement for Marc Sherman to sign the Annual Report form and submit the form on your behalf to the Illinois Secretary of State.
Important: Your Attorney is not responsible for late fees or other charges resulting from an absence of updated information or delay in notification or delay in payment from you. Your Attorney will NOT file the Annual Report if all of the steps are not taken.
One of the important steps for LLC Members, to ensure the limited liability protection, is to be sure that the activities necessary to demonstrate that activities are consistent with the LLC entity status are accomplished. Your Annual Report filing is one of those steps.
Contact Marc Sherman for further information or for assistance at (847) 674-8756 or by email to msherman@mshermanlaw.com.
The Attorney’s Role In Filing Your Corporation’s Illinois Annual Report
THIS IS TIME-SENSITIVE! The State of Illinois Domestic Corporation Annual Report discussed here is issued once a year and it is important because it involves your business corporation’s continued good standing status in Illinois.
Your Registered Agent has received Annual Report Form. It must be completed each year for your corporation. If it is not filed, there can be late-filing penalties, and eventually the Corporation may be involuntarily dissolved. The costs to seek reinstatement can be significant.
When must the Annual Report be filed?
The Annual Report must be filed by the deadline that appears on the upper left-hand corner of the form.
Can you file the Annual Report on your own?
Yes. You can reach out to your Attorney to assist you, or you may access the State of Illinois Business Services Division portal and submit the Annual Report on your own in most cases.
If you would like Marc Sherman to file the Annual Report for your corporation, do the following:
> Review the Annual Report form that you received and confirm that all of the information is still accurate, including spelling of names, addresses, and other information. Inform your Attorney of any changes during the past year prior to the filing with the State of Illinois, including any changes to your business corporation owners, issuance of new shares, and changes to the paid-in capital of your corporation.
> Notify us at least ten (10) days prior to the Annual Report filing deadline that you would like Marc Sherman to file the report on your behalf.
> Provide us with the payment information for the attorney fees and out-of-pocket expenses (this will be provided to you with the Annual Report Form). We will process an e-check or a credit card payment through an Attorney-approved, secure on-line payment portal.
> Confirm your agreement for Marc Sherman to sign the Annual Report form and submit the form on your behalf to the Illinois Secretary of State.
Important: Your Attorney is not responsible for late fees or other charges resulting from an absence of updated information or delay in notification or delay in payment from you. Your Attorney will NOT file the Annual Report if all of the steps are not taken.
One of the important steps for Corporation owners is to be sure that the activities necessary to demonstrate that activities are consistent with the Corporate entity status are accomplished. Your Annual Report filing is one of those steps.
Contact Marc Sherman for further information or for assistance at (847) 674-8756 or by email to msherman@mshermanlaw.com.
You have the right to have all of your communications with your Attorney, or prospective Attorney (yes, even before formally engaging them), be treated as confidential, whether regarding a legal matter for which you are seeking Attorney advice or involvement or discussion of matters for which the Attorney’s advice is helpful or necessary.
The Attorney-Client Privilege allows you to prevent disclosure of conversations, letters, e-mails, facsimiles and other forms of correspondence and communication between you and the Attorney and Law Firm staff representing or consulting you, in almost all circumstances. This information is held in confidence and should not be disclosed to others, except where you have directed the Law Firm to do so.
Why is this important?
The privacy of your confidential information, regardless of the form, has a value to you. Confidential information contains valuable, private information simply because it is non-public or possibly because it may be used against you if it becomes known by others. The law protects your right to limit disclosure of sensitive information, so that your discussions with your Attorney or prospective Attorney can be open and transparent.
Isn’t this just for litigation situations? No.
The Attorney-Client Privilege is important in a variety of contexts. Consider a new business or product idea that could be hijacked by others. Consider the timing and specifics of business plans and strategies you may be implementing. Consider your thoughts about actions against an employer or, on the flip side, the steps to be taken as an employer in dealing with the workers or vendors for your business.
There are many, many reasons why protection of your communications with your Attorney and Attorney staff can and should be considered.
What do I specifically do?
Since the privilege is yours, you also have the power to maintain it and the authority to waive and forfeit the Attorney-Client Privilege.
Your own verbal communications with the Attorney or Attorney staff will usually be considered to be protected. However, whether as an individual or as an owner or employee of a business entity, be mindful of two things: You can lose or “waive” the Privilege if your private communications happen to include or happen even to be near others who are not within your protected circle and can see or hear your intended private information. Also, you can waive the Privilege if you are sharing or disclosing the contents of Attorney-Client protected communications with another who is not in a position to share the Privilege.
If you are a business owner or management employee communicating with the business Attorney, keep in mind that circulating a privileged email, memo or the substance of the communication between you and the Attorney can later affect the ability of your business to prevent its use or disclosure.
Best practice: Start by protecting your privilege and your private information by doing the following:
Include a header in written correspondence or the “regarding” line in your emails with your Attorney stating that the document or the information is expected to be part of an Attorney-Client Privileged Communication. Or, at a minimum, identify the communication as “Attorney-Client Communication” or similar words.
Of course, give thought to the persons that you join as recipients in the email or to whom you circulate your documents and correspondence. And, be thoughtful of where you are having your Attorney meetings or who is on the call or email chain with you.
And equally important, be sure that you are individually or for your business, keeping your eyes on the other available tools that you have under the Law for protecting your confidential information, trade secrets and the like.
If you are not sure, ask your Attorney. Marc Sherman can be reached at msherman@mshermanlaw.com for further explanation, if necessary.
In her Washington Post article on April 19, 2024, award winning personal finance columnist Michelle Singletary provides an excellent list of what she terms “forever documents” that should be saved in the midst of your Spring cleaning.
Singletary’s list of “forever documents” includes her recommendation for keeping the following original documents in a safe place (save copies if the originals cannot be found):
~ Birth certificates and adoption papers
~ Death certificates
~ Marriage and divorce records
~ Social Security cards
~ Military service records, including discharge documents
~ Loan payoff statements
~ Year-end pay stubs
~ Retirement or pension records
~ Estate documents
~ Funeral programs for relatives (not just obituary)
Singletary also reminds that some documents are worth retaining, depending upon the circumstances:
~ Loan documents (while Loan is pending; save payoff doc & release after)
~ Vehicle title: Keep the original as long as you own the vehicle
~ Receipts for big-ticket items (for insurance purposes, during ownership)
~ Home improvement receipts, canceled checks (until you sell the home)
~ Investment account statements that are not available to you online
~ Tax records (often 7 years is worthwhile for our clients)
~ Medical bills (3 to 7 years if you paid with HSA or flexible spending account)
~ Credit card statements (one year, unless disputes are pending)
All good thoughts to keep in mind. Are you scanning as a substitute for paper retention or as a backup? If so, be sure that your family knows where to find the important papers (particularly the persons who will act for you under a Power of Attorney, or your Trust, or your Last Will and Testament).
If you need assistance to scan materials for safekeeping, we can provide help or suggest resources for you.
If you would like to discuss your Estate Planning documents or your Estate Planning goals, reach out to Attorney Marc Sherman by phone to (847) 674-8756 or by email to msherman@mshermanlaw.com.
Attorney Marc Sherman recommends a review of Estate Planning documents and Estate Planning goals at least every 2 to 3 years, or if an important life event has taken place.
Our new and returning clients interested in a thoughtful and affordable review of their Estate Planning materials and updates to accomplish their Estate Planning goals are best prepared if they are able to provide the following documents and information in advance of the meeting:
Materials for our review:
Please provide or be prepared to discuss with your Attorney the following Estate Materials:
~ Last Will and Testament and any Codicil(s)
~ Living Trust Declaration and any Amendments
~ Other Trust, if you have a Charitable, Life Insurance Trust or other Trust
~ Living Will Declaration
~ Power of Attorney for Healthcare
~ Power of Attorney for Property (Financial Matters)
~ Other Materials prepared for your Estate purposes
Information for review with your Attorney:
Please provide or be prepared to discuss with your Attorney the following information to assist with the review and updating of your Estate Materials and Estate goals:
1. Have you or any immediate family member experienced any change in your health since the last review of your Estate Documents and Estate goals? In particular, describe any significant illness or injury.
2. Has any close family member passed away since the last review of your Estate Documents and Estate goals?
3. Have you moved your residence since the last review of your Estate Documents and Estate goals?
4. Have you purchased or are you expecting to purchase real estate for personal or investment use since the last review of your Estate Documents and Estate goals?
5. Have your investments changed (including financial and bank account locations, CDs, Bonds and other investments or accounts) since the last review of your Estate Documents and Estate goals?
6. Has there been any other significant event involving you or an immediate family member since the last review of your Estate Documents and Estate goals? Include challenging situations, such as a bankruptcy filing, loss of a job, foreclosure, or lawsuit. And, positive events, such as birth or adoption of a child or grandchild, promotion, new business start-up, child’s graduation, or others.
If you have not discussed how to create Estate documents to meet your Estate Planning goals, or if you have not reviewed your Estate Planning materials in some time, we can assist. Email to Marc Sherman at msherman@mshermanlaw.com.
There has been alot of buzz about the Federal Trade Commission’s recently approved final rule prohibiting noncompete provisions in most circumstances. A review of the agreements that you have in place and that are likely to be used in the future is worthwhile.
Why the concern?
Employers have traditionally looked for strong ways to protect trade secrets and other confidential information, and to limit employees from infringing on their business interests. Noncompetition covenants, whether in employee handbooks or in separate agreements, have been a useful tool. Often just the threat of enforcement is a deterrent.
Many noncompetition agreements are unenforceable under the FTC’s new rule.
The FTC rule prohibits all noncompete restrictions for employees, independent contractors, interns, volunteers, apprentices, and even sole proprietors who provide services to business entities.
There are carve-outs for existing and future noncompetition restrictions that are created for sale of a business, and for current restrictions on senior “policy making” executives who meet a salary threshhold. However, new noncompete restrictions even for senior executives are not permitted.
Are all Employer protections gone?
No. But thoughtful drafing is going to be needed.
The “noncompete clause” prohibited by the FTC rule includes any “term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (a) seeking or accepting work in the U.S. with a different person or entity after the employment ends, or (b) operating a business in the U.S. after the employment ends.
Important restrictions on the activities of employees, independent contractors and others will remain and will be even more important to monitor and enforce.
Noncompete clauses that function during the term of work or employment are untouched. This may seem academic, but the specifics and enforcement will become more relevant. This is particularly true, since the implied threat of enforcement has traditionally been the strongest reason that an employee or contractor avoids future work that interferes with the former Employer.
Other worthwhile restrictions survive the FTC rule. For example, thoughtful use of Confidentiality Agreements and Non-Disclosure Agreements, including specifics for monitoring return of materials and information is necessary. These will become an essential Employer tool during and following a worker’s services in order to protect legitimate business interests. And, of course, every business should review Trade Secrets guidelines and practices to see that they are tightly drafted, implemented and available for enforcement when necessary.
The Upshot? Take Action Without Delay.
Waiting until an issue arises to review your policies and agreements is like ignoring an annual trip to the dentist and waiting until the tooth begins to hurt. Preventive care of your business interests is good practice that can avoid significant legal costs and frustrations later.
Attorney Marc Sherman recommends that every business pull out and dust off existing policy manuals, internal agreements, and external independent contractor agreements for a critical review. Also, consider whether new focus on Trade Secret protections, Confidentiality Covenants and other restrictive clauses need to be implemented or whether current policies can be reasonably beefed up.
Anyone who would like to discuss how this important topic affects their business and business interests can contact Marc Sherman by email to msherman@mshermanlaw.com.
Your Accountant’s role in helping you select the appropriate business entity is key. Depending upon the nature of your business, the business relationships that you expect with partners, and other factors, the accounting and taxation considerations are going to be important for selecting the appropriate form of business entity.
However, we often see that some clients have engaged their Accountant to accomplish the business formation steps with the Secretary of State. Perhaps the client and Accountant were thinking that there is a fee savings. Perhaps the Accountant encouraged this additional step to be more involved in the entity setup. For many clients, it was not the best or the most cost-effective decision.
Focusing on the legal aspects of business creation and guiding you through the issues for consideration is an important role for your Attorney. When the Accountant begins the entity creation process, this implies that the Attorney’s involvement is a lesser concern or, worse, is not necessary. The client loses out.
The Attorney’s experience and training in a variety of legal areas provides an opportunity to consider much more than taxes and accounting elements relevant to you and your new business. Some examples bring home the point:
Considerations Of Potential Claims Can Guide Entity Choice.
What is likely to happen if someone tries to enforce a claim against the business? The business entity choice can provide limited liability in many instances. Still, there are some types of claims and business obligations that can be brought against owners or managers despite trying to protect themselves with the “corporate veil of limited liability.” Industry laws and regulations, some business laws involving labor and operations, and vendor and customer agreements and activities may provide unique considerations for your business model and your personal decisions.
Discussing your business entity choice and your business plan with your Attorney should take into consideration your personal assets (and obligations), and your Estate Planning that has been created or can be developed for you, and consideration for options that may become important if the business doesn’t go as planned.
For many entrepreneurs, the first time being involved with a significant claim in or out of court is an eye opener; particularly when the legal claim prompts the question: “How could this affect me personally and my family?” There are planning opportunities that are purposeful and useful. Considering those opportunities early and adapting to changes in the business in a timely manner are important.
Consideration Of Business Partner Activities And Disputes Can Guide Entity Choice.
The relationship between you and your business partners will frequently have many layers — even if your business partners are family or friends.
What are your expectations of the amount of time you will each give to the business? What expectations do you each have for investing funds for the business or for willingly participating in financing the business with loans or with a personal guaranty? What happens if your business partner can no longer provide their time, guidance and financing?
Are there consequences of having to unwind the business entity if things do not go as hoped, and how is that done? Should you be concerned if your business partner becomes disabled and can no longer participate or passes away and their interest in the business may go to their spouse or children?
The Attorney’s role? Discussing entity selection and its impact on business relationships. Creating a Shareholder’s Agreement or incorporating terms of future transfer of the business ownership interest in a Partnership Agreement or LLC Operating Agreement. Helping the business owners create and express their expectations.
Get Your Attorney Involved Early And Often.
From a tax and accounting standpoint, your Accountant will surely be adding value. Including your Attorney in the business planning early and often is equally and sometimes more valuable. Engaging your Attorney to assist with your business entity planning and business entity creation not only adds value, but also helps you make good decisions to preserve that value and to accomplish your business goals.
If you have questions about the cost of Attorney time to assist with business planning and business entity creation, you can reach out to Marc D. Sherman & Colleagues PC. If you have already set up your business entity, but you have not reviewed the considerations discussed here with an Attorney, we can also assist you and your business partners.
Buying a home is much more than your investment in real estate. It is a part of your family’s estate plan. Younger homebuyers are taking the step to set down roots, raise their family and build equity in one of the most important life purchases they will make. Mature homebuyers likewise focus on community, but with a focus on securing value and preserving assets and equity for the benefit of loved ones who later inherit that value.
Don’t wait until you and your realtor have found your dream Home. Whether this is your first home or not, make the call to your Real Estate Attorney early. Marc D. Sherman & Colleagues P.C. is ready to help.
Helping You Understand Home Purchase Costs.
Your Real Estate Attorney helps you to understand the costs of purchasing your Home. Know and consider the out-of-pocket costs to be paid at the time that your contract offer is accepted. Also, be prepared and understand the costs you will pay at the purchase closing. Typically these costs of purchasing a home or condo are not in the hundreds but may be in the thousands of dollars.
The Real Estate Attorney explains how the real estate agent’s commission works. And there other costs and fees you need to be aware of, too. Your Real Estate Attorney helps you understand the usual costs, like pre-purchase inspections of the condition of the Home, and helps you know if there are taxes to be paid as a buyer at the time of your purchase (yes, Chicago has a VERY significant ‘welcome tax’ for home and condo purchasers). You should also understand and plan for how title charges and other fees will have to be paid at the time of the purchase.
Do you understand how real estate taxes are paid in your community? Are there other taxes to consider, such as special assessment taxes? Will those taxes go up?
At the same time, you will be reaching out and identifying a mortgage broker. They need to be on the top of your list. Understanding the cost and availability of mortgage financing is perhaps the most important element in the home purchase process. The Real Estate Attorney can stay on top of your mortgage professional’s efforts.
Selecting Your Broker and Understanding The Purchase Contract Process.
Your Real Estate Attorney will help you to understand what is involved in selecting a real estate broker and many important aspects of your real estate purchase contract as it is prepared when you find your new Home.
Your Attorney can explain special contingencies in your Contract offer to the Seller, such as the home inspection and mortgage financing contingencies, and the Attorney Review period that is a part of each standard purchase contract.
Your Attorney can explain the importance of closing and possession dates, including the importance of planning for the end of your current lease or selling your current residence, and particularly with new construction.
And, if you are looking to purchase in a community with a homeowner’s association or in a condominium property, your Real Estate Attorney can help you understand the many considerations that accompany such a purchase. How do you learn if there are special assessments being paid or that are being considered by the homeowner association? Will you be responsible for the assessments? Is there an opportunity to negotiate payment with the Seller? These are among the several considerations that your Real Estate Attorney can discuss with you.
Estate and Asset Protection Planning is an important part of the discussion.
Too often, first time homebuyers do not consider or understand how their new purchase fits into a discussion of their Estate planning. Sure, there is alot going on. It is a busy and exciting time. But the discussion need not be overly time-consuming.
Are you in a business? Are there potential liabilities that could affect you or your partner (like a personal guaranty of a business lease or contract) that should be discussed? Have you considered what happens to the ownership of the Home if you or your partner, or both, are sued? Not a fun topic, but a timely one.
Seasoned Homeowners trading up or downsizing should be particularly thoughtful about ownership of the new Home in their Living Trusts and other title ownership and succession planning vehicles that are useful and available There is no ‘one-size-fits-all’ approach.
What will this cost?
The answer often depends upon the nature of your Home purchase and your personal circumstances. Your Real Estate Attorney will charge a fee for their representation. If there are Estate or other personal matters to work on separately, the Attorney will discuss with you the difference between hourly and flat fee billing for those projects.
The bottom line: Your thoughtful and experienced Real Estate Attorney should be prepared to spend time to discuss these issues with you. The Attorney is one of your trusted resources while you are moving ahead with your purchase.
There are few responsibilities more emotionally trying than being called upon to settle the affairs of a loved one. If you have been selected to serve in the role of Estate Representative or successor Trustee, you have probably had no formal training for the steps that come next. Most people who have been asked to step up to the task have not had the opportunity to act in this capacity before.
No two situations are exactly alike.
There are helpful directions for the Executor and Trustee roles, and a complete discussion would fill many more pages than provided here. But this is a good start…
Materials and Information To Collect:
We recommend that you begin by gathering important and useful information, including:
Decedent’s Identification Items, such as driver’s license, passport, Social Security Card; and
Decedent’s personal and family records: Birth certificate, Death certificate (order at least 5, but more may be required depending upon the assets in the estate), marriage license, divorce judgment (including Marital Settlement Agreement), military service discharge documents; and
Estate documents, including Last Will and Testament (and any Codicils), Trust Declarations and amendments, Land Trust records (if applicable), and insurance trust records (if applicable); and
Life Insurance materials, including life insurance policies, and the identity of life insurance brokers; and
Asset information, including real estate deeds or leases, timeshare interest documents and deeds, car and boat and other titles, financial information concerning bank and financial accounts, stocks, bonds, CD’s, annuities, retirement accounts, and information concerning any other assets (whether or not you can determine now whether or not there is a significant value); and
Debt information, including mortgage documents, home equity loan documents, credit card statements for the past several months, personal loan information, student loan information; and
Business information, including details about the operation of a business as a sole proprietor, the operation of a business corporation or limited liability company, and partnership interests in general or limited partnerships.
Unique Issues: Are there royalties from the creation of art or published or other works? Are there rights to receive continued payments from installment or other sales? Are there payments available and uncollected from family or other estates or trusts? Are there refunds available from any source? Are there airline mileage accounts, rebate accounts or other sources that should be reviewed?
The types of assets and debts or obligations are not the same from person to person.
Next steps:
Securing property and assuring continued communication are often the first and most useful steps to take:
Secure the home:
Rental? Contact the landlord to be sure that they know who to reach in the event that access to the house or apartment is necessary. Find out whether rent has been paid current. If you haven’t located a copy of the current Lease, request that a copy be sent to you.
Who else has keys? Are there reasons to change the locks?
Are there others living in the home? If so, are the Decedent’s personal items secure or do they need to be removed from the premises to be sure that they can be handled appropriately?
If the home or apartment is owned, have you determined if there is a mortgage or home equity line of credit? When was the last payment made? Are the real estate taxes current? If they have not been paid for an extended period of time, taxes may go to sale and an attorney should be contacted.
Whether owned or rented, check that sump pump and HVAC systems are working and set to avoid freezing temperatures or hot weather extremes that may be damaging. Locate utility account information to make sure that accounts are not in jeopardy of being closed and utilities shut off. And check garbage/refuse removal, both in the home and at the street or alley. And, finally, assess the need for attention to clean-up. Do the fridge and freezer need to be emptied in order to avoid an unpleasant situation? Are bathrooms and other areas in need of attention?
Later, the Estate or Trust Attorney will review the listing of the owned home, the return of a leased home or apartment, and the importance of considering the date of death valuation of residential and investment property.
Make sure to also review other properties, timeshare interests, interests in real estate partnerships.
Secure Papers and Documents.
There is a value in having the opportunity to review both current and older documents. Some will be useful for tax filings, including consideration of Estate Tax issues. Other documents may be helpful to locate relatives and others of importance for the estate resolution process. If it’s a mess, then some time and attention may be necessary. But a wholesale clean-out, without considering the documents that exist, is often foolish.
Assess Financial Needs of Surviving Spouse and Dependent Children.
Does the Decedent’s family have access to funds for their day-to-day living needs? Is it possible that significant funds are going to be needed soon? Does the surviving spouse have his or her own source of income, credit cards, emergency funds? Should Social Security be contacted promptly in order to make sure that the surviving spouse has the benefit of an increase from the Decedent’s Social Security? And to assist dependent children in applying for Social Security benefits to which they may be entitled?
Funds may be more quickly available from life insurance proceeds, from jointly owned accounts or assets, or from other sources.
Set Up a Meeting with the Attorney and Accountant.
The two most valuable members of your team to assist with the resolution of the Decedent’s Estate or Trust, or both, will be the Attorney and Accountant that you retain to provide guidance.
The Estate Attorney will review your initial efforts, review the Estate and Trust documents that you have been able to locate, and will discuss the need for Probate Court involvement.
Probate is not always necessary. The value and the type of assets in the Estate, will determine whether it is necessary to take steps to open a formal Probate in the County where the Decedent lived at their passing. Often a Small Estate Affidavit can be a means for out-of-court resolution of the Decedent’s assets. Your Estate Attorney can make recommendations and discuss the alternatives available.
If the Estate Attorney recommends that a Probate Case be filed, they will discuss with you the timing, the steps required, and the issues to be handled.
Whether or not a formal Probate Court filing is required, a meeting with the Accountant selected for the Estate is a must. The Accountant will review concerns, if any, about prior tax and other filings. The Accountant will assist with a review of the need for filing an Estate Tax Return, which is not always necessary, but is still sometimes important depending upon the circumstances. And, the Accountant should also review whether there are tax consequences relating to distributions from insurance, from qualified accounts such as IRA’s and 401k’s, and other important issues.
Do not delay the first meeting with the Estate Attorney and Accountant. Of course, a lot is going on. But these professionals will promptly help you to determine whether there are things that should be done more quickly than others, and with more caution.
Marc Sherman is available to set up an appointment to discuss these steps.
We often see clients who created their Will, Living Trust and other Estate Planning documents years ago, and who have put those documents in their file without continued attorney review. In many instances, there have been changes in living arrangements, changes in property and liabilities, and other significant life events that require attorney review and tweaks to Estate Planning and other documents. This is the first in a series of Estate Planning follow up recommendations:
Recommendation #1: Your Home And Tenancy By The Entirety Protection:
Protecting your home, both during your lifetime and afterwards, is a key consideration. This is particularly true if there should be an event requiring a review for purposes of debt collection, bankruptcy or similar issues.
Tenancy By The Entirety (TBE) is a special form of property ownership for married couples in Illinois offering protection against creditor collection efforts and protection in the event that a bankruptcy becomes necessary. TBE title ownership is only available to married couples and only available for their principal residence. It does not have to be elected at the time of the property purchase. It can be added in the event of a subsequent marriage or at any time by an appropriate deed transfer. Review by your attorney is recommended.
Electing TBE ownership does not involve any additional expense. But if it was available and is not used, TBE protection is not available.
Here is how it works: When the marital home is held in TBE ownership, this ownership effectively provides additional security in the event that one or the other spouse is sued for an individual debt. Under Illinois law, the creditor of one spouse can only file the judgment as a lien against the home; the creditor cannot foreclose its lien while the home remains in TBE ownership. And if one spouse needs to file for bankruptcy protection, the bankruptcy trustee cannot reach the spouse’s interest in the home for the spouse’s creditors.
TBE does not protect the home against collection efforts involving joint debts of the owners.
The concern? Tenancy By Entirety may not have been elected, even if it was available.
More often, the TBE protection can be lost. And that is the reason that homeowners should review their Estate Planning and Estate Planning Documents routinely. These are some concerns and the key take-aways:
Don’t wait until there is a major liability or a need to seek bankruptcy or debt counseling.
> If a spouse is facing a significant illness, or if one or both spouses have moved to a new ‘principal’ residence, or if a divorce or separation is in the cards, considering the TBE protection for your property is a must.
> If a spouse passes away or if the marriage is ended, the TBE protection against creditors of either spouse is lost.
> If one or both spouses no longer has their principal residence at the home (regardless of the reason), the TBE protection against creditors may be lost or jeopardized.
> If the homeowners take action without discussion with an Estate Planning Attorney, the result of decisions made may significantly affect the TBE protection for the home.
One real-life example: A friend recommended that one spouse should be impoverished because of Medicare or other circumstances by transfer of the interest in the marital home. Yet there were other, pre-existing debts of the spouse, and the transfer of the home destroyed the TBE ownership and protection. The spouse who continued to own the home was sued by their creditor, and a judgment lien was filed against and attached to the entire interest of the spouse.
Another real-life example: The client heard from a friend that they could avoid a probate at the death of one or the other spouse, without using a trust. The client decided on their own to add two children to the home deed while they were still alive. By doing so, the client inadvertently destroyed the TBE ownership and protection because the home no longer owned solely by a married couple. A judgment creditor sued, and the equity in the home was reachable for the debt.
Even well-intentioned efforts to transfer the home title into a land trust or to an Estate Planning Living Trust or other form of ownership could inadvertently cause a loss of the TBE ownership and protection.
> If the marital home is transferred into a Land Trust, regardless of the reason, and the beneficial ownership interest in the trust is not retained by both spouses, or even if both spouses retained ownership, when the Land Trust Agreement fails to clearly state that the beneficial ownership is held as tenants by the entirety, then the TBE protection will be lost.
> If the Estate Planning Attorney created a living, revocable trust for one or both of the spouses, and deeded the marital home into the trust, but failed to express in the Deed into Trust that the ownership will be treated as tenancy by the entirety, or if the transfer otherwise fails to comply with the Illinois law (765 ILCS 1005/1c), then again the TBE protection will be lost.
Important Action Steps:
> Discuss TBE ownership with your real estate attorney at the time of your purchase.
> Review your Estate Planning Documents and your title ownership for your real estate interests regularly; particularly if there are significant changes that have occurred or about to occur.
Your attorney can help you to create a good plan and can assist you by reviewing your existing Estate Planning Documents and your asset and liability picture.
If I had a dollar for every time someone told me that they don’t need to worry about a Will or a Living Trust because they have made their children joint owners of their home or other assets, it would be a tidy sum!
While it often makes sense for spouses to hold their marital home in joint tenancy, naming your children as joint owners of your assets is almost always asking for trouble – in many ways.
“Oops, I didn’t realize that I was giving my child’s creditors access to my money or property.”
That’s right. When you add someone to your real estate title or to your account or other asset as a joint owner, you are giving that person a present interest in the property. This means that the person, for this example your child, is immediately entitled to their interest in the asset. Your child will not likely take what is not at that time intended for them to have. But if the child is sued, or has to file a bankruptcy, or has a tax lien, the law says that the creditor or bankruptcy trustee or taxman CAN get at the child’s interest in your property. And there is little that you can do at that point to stop them.
It doesn’t matter how highly you regard your child and how very responsible you believe them to be. All you have to do is consider that the child may have an uninsured or underinsured motorist claim, or sign a personal guaranty of a business debt that goes bad, or fail to pay their taxes, or a myriad of other situations.
A better option? Discuss with your Estate Planning Attorney if one of the following is a better fit for you: Naming your child your power of attorney, so that they can take actions for you in the event that you cannot do so yourself; add the child as a payable-on-death beneficiary to your account; use a Transfer On Death Instrument to pass real property interests to your child or other beneficiaries; or, put your assets into a living, revocable trust and make the child the successor trustee.
Good intentions just won’t cut it. There is no “good intention” exception under the law when a child’s creditor comes knocking at your door to collect the child’s interest in your property.
And if that isn’t scary, consider that even if the child’s creditor doesn’t come after your asset, the use of the wrong method to pass your property could result in a serious tax hit. That’s right. Ask your accountant. They will tell you that there are certain advantages of passing property via correctly created estate planning tools, and that the lifetime transfer to a child of a joint ownership interest in your property may limit or destroy these positive tax attributes.
The team at Marc D Sherman & Colleagues PC is available for your questions. Reach out to set up a consultation.
It’s remarkable that we are ready to talk about Spring (and feeling Spring-like weather in Chicago) already! Besides working at our recent personal resolutions, here’s what the attorneys will be watching in 2024:
Illinois Paid Leave for All Workers Act
Many Illinois Employers will become aware that their employees will be entitled to 40 hours of paid time off for any reason as the Illinois Paid Leave for All Workers Act makes a new change to local law. Only seven days notice to the Employer, in most instances, is required. Employers are unable to require or ask the employee to find a replacement to work for them if time off is requested, and Employers may not discriminate against an employee who takes time off, as for example by reducing the employee’s hours or by limiting opportunities for advancement.
In many instances, employers with current paid leave policies will only need to tweak their existing policies.
Vaping Now Subject To Smoking-Related Restrictions
Illinois has expanded the laws to keep public spaces smoke free by making the same prohibition applicable to cigarettes in public places and within 15 fee of building entrances applicable to the use of electronic cigarettes, or vapes, as well.
Illinois Freelance Worker Protection Act (FWPA)
Almost everyone hired or retained as an independent contractor in Illinois for compensation of at least $500 will have increased rights. Beginning in July 2024, hiring or retaining a freelance worker will require that: (1) The agreement for work must be memorialized in a written contract; (2) Payment to a freelance worker is required within 30 days following completion of the services or product; and (3) Companies or contracted entities cannot engage in any discriminatory, retaliatory, or otherwise harassing behavior toward freelance workers.
Importantly, under the law a freelance worker does NOT include someone hired to perform construction services.
Aggrieved persons may seek relief in Illinois state courts or by filing a claim with the Illinois Department of Labor.
Illinois Personnel Records Review Act Amendment
Beginning January 2024, the Illinois Personnel Records Review Act (IPRRA) amendment is making it easier for employees to obtain copies of their personnel records. Employers must email or mail a copy of the employee’s records to the employee upon their written request, without consideration whether the employee is able to inspect the records in person prior to receiving a copy. Employers can still charge for any actual cost of copying the requested materials.
Illinois Transportation Benefits Program Act
The Illinois Transportation Benefits Program Act, beginning January 2024, has added a benefit for employees working for employers with 50 or more employees in Chicago or other specified nearby locations, and that are at an address that is located within a mile of fixed-route transit service. The Employers must now allow employees to use pre-tax dollars for the purchase of a transit pass through payroll deductions. The benefit must be offered to all employees, beginning on the employees’ first full pay period after 120 days of employment. Searchable maps should be available on-line from the Regional Transportation Authority, showing addresses located within one mile of fixed-route transit service.
The Electronic Vehicle Charging Act
New single-family homes and newly constructed or renovated multi-unit residential buildings that have parking spaces will have to provide at least one electric vehicle-capable parking space for each residential unit. The law does not require developers or builders to install or run wire or cable for such charging stations, but requires them to construct buildings in a such a way as to allow for the installation of charging stations.
Illinois Landlord And Tenant Act Change
Effective January 2024, it will be a violation of the Consumer Fraud And Deceptive Practices Act for any residential landlord to require a tenant or prospective tenant to remit any amount due to the landlord by means of an electronic funds transfer, including, but not limited to, an electronic funds transfer system that automatically transfers funds on a regular, periodic, and recurring basis.
Effective January 2024, all estate-planning documents must be able to be prepared electronically. Previously, only wills were included. A nontestamentary estate planning document or a signature on a nontestamentary estate planning document may not be denied legal effect or enforceability solely because it is in electronic form.
“Nontestamentary estate planning document” means a record relating to estate planning that is readable as text at the time of signing and is not a will or contained in a will. These include documents that create, exercise, modify, release, or revoke: a trust instrument or a trust power that under the terms of the trust requires a signed record; a certification of a trust under Section 1013 of the Illinois Trust Code; a durable power of attorney; (5) an agent’s certification under the Illinois Power of Attorney Act of the validity of a power of attorney and the agent’s authority; an advance directive, including a health care power of attorney, directive to physicians, natural death statement, living will, and medical or physician order for life-sustaining treatment; and any other record intended to carry out an individual’s intent regarding property or health care while incapacitated or on death (but not a deed of real property or a certificate of title for a vehicle, boat or the like).
Reliable public polls continue to confirm that less than 20% of young adults under the age of 30 have made a Will. The percentage makes some sense, since this age group is likely to just be starting their careers and may not yet have considered having children.
More concerning? The percentage of young adults between 30 and 45 years of age who have created a Will is not significantly higher. Only about a third of this important age group has considered preparing a Will. And, of course, this is the age when committing to a long-term relationship, starting a family, purchasing a first home or condo, and inheriting assets from parents or grandparents is more likely.
Mistake #1: I don’t need a Will or other Estate Planning documents.
Without a Last Will And Testament, the State directs how your property is passed on when you pass on. Accounts and assets that have a beneficiary designation will hopefully go as you have planned. But in all other cases, if you live in Illinois and you are unmarried and have no children, your property will go to one or both of your parents if they survive you (even if they don’t need your money and property). If your parents do not survive you, your property will most likely be divided between your siblings (and how many of us probably do not want ALL of our brothers and sisters to inherit our money and property?).
The point is, you can decide how and even when you want those who are important to you to receive your money and property if you depart this life. Sure, you can have a beneficiary on your accounts and take other steps, but there is no reason not to review this with an attorney to confirm that your expectations will be met.
Mistake #2: This is only for those who have a lot of money.
The value of your personal assets is not the only good reason to talk to your Lawyer (see Mistake #1). The Estate Planning Lawyer can help you to be sure that other important materials are prepared for you:
A Power of Attorney (POA) for Healthcare is important, so that you can be sure that the person YOU want to be making healthcare and medical decisions for you is able to act on your behalf, if necessary. Without a POA for Healthcare purposes, it is often necessary for a court to appoint a guardian to act for you, even in temporary situations when you cannot direct your physicians and other healthcare professionals on your own. Going to court for a guardianship is costly.
A POA for financial and property matters is equally important. This is how you select an agent who will assist you by making decisions and handling a multitude of matters for you, when you cannot do so. File a tax return, communicate with your employer, access bank and other accounts, pay your bills, and more.
They don’t teach you this in school. But they should!
Mistake #3: I can take care of this later.
This is one area that you don’t want to put off. Can’t take off work? Find an attorney who will meet with you on Zoom or in person in the evening, or early morning, or on a weekend. You don’t want to be hurrying up to see the attorney when there is an emergency. Your options and planning, if necessary, can be tougher or more limited.
Mistake #4: Lawyers are too expensive; I can’t afford to do this.
You can’t afford not to.
What is the price that you put on having your property and money given to someone that YOU didn’t choose? Should you take the chance that there must be a court petition to appoint a guardian for you in the event that you are unable to make healthcare or financial decisions on your own (which usually costs more than what the attorneys charge for for a Will and Powers of Attorney preparation)?
Having a simple Will, Powers of Attorney and getting solid direction concerning related Estate Planning considerations will usually cost far less than you think.
And, please, avoid the late night commercials offering to have you prepare a Will for $100 with a few keystrokes. There are a multitude of considerations that your attorney is able to discuss with you, that the on-line Will creators often miss.
The team at Marc D. Sherman & Colleagues, P.C. is available to speak with you, discuss your needs and arrange a reasonable fee structure for you.
A new decision from the Illinois Appellate Court reminds both attorneys and clients alike that attention to all aspects of business contract drafting should be a priority.
In the case of Nord v. Residential Alternatives of Illinois, Inc., 2023 IL App (4th) 220669, published on November 3, 2023, the Court was presented with a case asserting negligent nursing home care against Manor Court of Freeport Illinois. Naomi, a former resident of the nursing home passed away, and her Executor sought damages for the nursing home’s alleged treatment that the Executor insisted was the cause of or a contributing factor in Naomi’s death.
Manor Court moved to dismiss the case, directing the Judge’s attention to an arbitration agreement in the Manor Court contract materials. Businesses with potentially significant exposure to lawsuits will frequently include arbitration clauses in their contracts. These clauses require that claims be brought by disgruntled clients in an arbitration setting that is often less public and sometimes more favorable than state or federal court. There is a significant body of law outlining when and how those arbitration clauses can be enforced.
Considering Manor Court’s motion, the trial court held that the arbitration clause was unfair and unconscionable because it was buried in some 27 pages of documents included with the Manor Court resident admission materials. Also, reviewing the agreement to arbitrate, the court found that its terms essentially shifted all of the costs (potentially thousands of dollars) of the arbitration expenses to the resident. The trial court denied Manor Court’s motion to dismiss.
When the nursing home appealed, the Illinois Appellate Court considered another important aspect of the Resident Admission Agreement: Naomi’s Executor argued that all of the language of the resident contract should be read together, and here the agreement stated that the “term” of the contract terminates on the day that the resident is discharged from the facility. As a result, the resident contract, including the arbitration provision, terminated on the date of the resident’s death. The arbitration clause, Naomi’s Executor urged, was no longer enforceable. The Appellate Court agreed and the Court permitted the claim by Naomi’s Estate to continue in the Illinois court.
What should attorneys and business owners take away from the Court’s decision?
Choose the language of your contracts carefully. The Appellate Court pointed to the fact that the arbitration clause did not state that it applied to claims filed after the termination of the resident contract. The Manor Court nursing home and its attorneys could have clarified the concept of termination, the definition of the “term” of the contract, and what provisions were intended by the parties to survive the conclusion of the contract — all important considerations that could have significant impact upon the enforcement of the contract. Eyes on the contract language can support the client’s enforcement of the contract later, both in and out of court.If you are concerned about the enforceability of your contracts, or are preparing for new or revised agreements for your business, Marc D. Sherman & Colleagues P.C. can help.
With near universal access to social media and online connectivity, younger clients in particular frequently ask if they can make a Last Will And Testament by video. While this seems like a reasonable approach, Illinois law does not recognize a video Will as an enforceable tool for estate planning.
To be sure, a video or other recording of your wishes may be thoughtful for your family or friends. It may even help to be descriptive of the expressions stated in your Will. But Illinois law requires that to be enforceable a Last Will and Testament should be memorialized in a written or typed document. And your Will must be signed by you in the presence of two witnesses who also sign the Will and state their opinion that at the time of signing they believe that you are of sound mind and memory.
If your Will is prepared in a document, as required in Illinois, it is now possible however for the Will to be executed and witnesses remotely by electronic means. The Illinois Electronic Wills And Remote Witnesses Act recognizes the validity of an electronic Will that is executed by the Will’s maker (the testator) or executed on the testator’s behalf in the testator’s presence and at the testator’s direction, provided that the Will is also attested to in the testator’s presence by 2 or more credible witnesses.
Specific restrictions and requirements apply. Talk with your attorney about available options and the other important considerations that you should review.
Putting a Power of Attorney for Healthcare and a Power of Attorney for Property in place as part of your Estate Planning preparation, no matter how simple you feel that your Estate needs may be, is an essential piece of your planning. Many attorneys encourage you to use the statutory Illinois Short Form Powers of Attorney (POAs), which in most cases are sufficient. But whether you are creating POAs for use with your own Estate plan or you are asked to become an Agent under POAs for a parent or another person, learn about them and take your role seriously.
A recent decision from the First District Illinois Appellate Court highlights the importance of understanding the POA Agent’s role and the need for attention by both the Agent and the Principal for whom the POA is created. The case of In re Estate of Jackson, 2022 IL App (1st) 211132, brings into focus the need for record-keeping, the need for understanding the POA Agent’s role, and the importance of the selection of your POA Agent.
In this case, Ms. Jackson appointed her friend Mr. Thomas to handle her financial, medical, and real estate affairs, and other personal and business affairs. She had POAs prepared, she signed them, and ultimately Mr. Thomas was granted access to Ms. Jackson’s brokerage account statements and to other important aspects of Ms. Jackson’s financial information and health records.
Fast forward several years when Ms. Jackson was found to be incapable of handling her own financial and personal decisions. Her Sister was appointed as guardian, and Mr. Thomas resigned and revoked his POAs. The probate court ordered Mr. Thomas to provide an accounting of Ms. Jackson’s assets for a four-year period. Money had earlier been disbursed from the brokerage account for which Mr. Thomas could not account. Those funds may have been disbursed by Ms. Jackson when she was competent, or they may have been improperly taken by others. Mr. Thomas, the Agent, could not explain.
It would be interesting to learn what actually happened. But the importance of this case for our clients is not what happened to the money. It is what the Court insisted was Mr. Thomas’s responsibility as Ms. Jackson’s POA Agent in the face of his inability to explain where the funds went and for what purpose. The Court explained that Mr. Thomas had a duty as a fiduciary to explain disbursements and distributions made. A POA creates a fiduciary duty as a matter of law. Such a role requires the agent to keep records and to provide a copy of these records when requested. The transactions may indeed have been innocent, but the award to Ms. Jackson’s guardianship estate, requiring Mr. Thomas to replace the funds when he could not explain where they went, was surely a surprise to Mr. Thomas.
The takeaway? If you are creating new or revised Estate Planning Materials, reach out for proper preparation of all of your Estate Documents and understand how they are intended to work for you and protect you. Legal Zoom or other on-line document preparation tools may look appealing because they offer to provide a simple and inexpensive legal document. But there is no substitute for the time and meaningful explanation that a seasoned attorney can provide to you during the Estate Planning process.
If you are being asked to take on the role of Agent under Powers of Attorney for another person, no matter how close your relationship may be with that other person, do not simply accept the Agency appointment without knowing all of the responsibilities to be expected of you. Do we think that Mr. Thomas wished he had paid for an hour of an attorney’s time to save him from the need to come up with BIG bucks later? You bet! You should have your own guidance, so that you can be prepared for the situations that lie ahead.
If you would like assistance, reach out to schedule time with one of the Attorneys at the Sherman Law Team.
Effective January 1, 2023 The Illinois legislature has adopted changes to the former Child Bereavement Leave Act that expand the scope of the law for Illinois workers at companies with over 50 employees.
Availability of Unpaid Leave
Employees may use up to 10 days of unpaid bereavement leave to do the following:
– Attend the funeral of a covered family member
– Make arrangements necessitated by the death of a covered family member
– Grieve the death of a covered family member.
– Be absent from work due to one of the following event [Employers may not require employees to identify which category of event the leave pertains to as a condition of obtaining leave under the FBLA]:
– An unsuccessful round of intrauterine insemination or of an assisted reproductive technology procedure.
– A failed adoption match or an adoption that is not finalized because it is contested by another party.
– A failed surrogacy agreement.
– A diagnosis that negatively affects pregnancy or fertility.
– A stillbirth.
A covered family member includes an employee’s child, stepchild, spouse, domestic partner, sibling, parent, mother-in-law, father-in-law, grandchild, grandparent, or a stepparent.
Bereavement leave must be completed within 60 days after the date on which the employee receives notice of the qualifying event listed above. The employee must provide the Company with at least 48 hours advance notice of their intention to take bereavement leave unless providing notice is not reasonable and practicable.
Reasonable Documentation for Bereavement Leave Requests
An employee seeking a bereavement leave of absence is required to provide reasonable documentation when requesting leave. In the event of a death of a covered family member, reasonable documentation includes a death certificate, published obituary, or written verification of death, burial, or memorial services. Reasonable documentation for covered events related to pregnancy, adoption, surrogacy, and fertility includes a form provided by the Illinois Department of Labor (IDOL) to be filled out by a healthcare practitioner. https://labor.illinois.gov/contact/dam/soi/en/web/idol/laws-rules/conmed/documents/family-bereavement-leave-act-form.pdf
There are a variety of areas that we will be watching in 2023, from law practice considerations to employment, estate planning, real estate and other areas:
Will the U.S. Dept. of Labor implement a 2022 proposal that could make it more difficult for employers to classify their workers as Independent Contractors? Right now, Illinois employers are typically applying a three-pronged test when considering whether a worker can be classified as an Independent Contractor or an employee: Is the worker generally free from the control and direction of the employer, is the worker performing work/services outside of the employer’s regular business, and is the worker typically engaged in an independently established trade, occupation or business. The USDOL’s proposed rule would require examination of six factors, such as the worker’s opportunity for profit or loss; the skill required for the work; the degree of permanence of the working relationship; the investment in equipment or materials required for the task and whether supplied by the employer or the worker; the nature and degree of control over the worker’s time and work; and, how integral the worker’s services are to the employer’s business. The Society For Human Resource Management suggests that the proposed new rule is likely to affect employers who rely on gig workers in the most substantial way and will be watching for further DOL guidance and legal challenges. We believe that this is yet another reminder that all of our employer clients should review their pay practices to determine whether workers are properly classified as employees or independent contractors. The risk of misclassification, particularly for employers who rely without support on independent contractor identification and pay practices, is the risk of minimum wage, overtime and other benefit violations.
Chicago Employers’ compliance with, and effect of, the 2022 enhancements to the City’s law prohibiting sexual harassment. Chicago employers must provide Supervisors with 1 hour bystander intervention training, and 2 hours sexual harassment prevention training, and must provide Non-Supervisors with 1 hour bystander training, and 1 hour sexual harassment prevention training every year. The training requirements went into effect July 1, 2022 for all employers with 1 or more workers. The Chicago Commission On Human Relations enforces the City’s sexual harassment prevention training requirements and the other aspects of the law. The State of Illinois already requires sexual harassment prevention training, which may meet some of the City’s training requirements. Clients are advised to check out the information available at http://www.chicago.gov or reach out to us for recommendations for training compliance and Human Resources assistance, or to review worker complaints and assist with investigation.
Execution of Estate Planning and other documents using electronic signatures and remote notarization. The use of electronic signatures to accomplish a variety of legal, commercial activities is not new. Illinois law is also permitting execution of a Last Will And Testament by electronic signature by someone in the testator’s presence, at the testator’s direction, and attested to in the testator’s presence by two or more credible witnesses, can all be done electronically. An electronic Will is a digital asset and any person or business in possession of an electronic Will is a ‘custodian’ to whom safeguard measures apply, and provisions for certified copies of an electronic Will are available. Specific requirements for the remote witnessing, via audio visual communication, apply. These remote witnessing features are not just for Wills, but for almost any document executed in Illinois. In 2023 we will be watching to see how the verification of an electronically signed Last Will And Testament is handled and whether Illinois courts are becoming comfortable with petitions to have an electronically signed Will admitted to probate. We also expect that in 2023 we will introduce clients to our own opportunities to apply these important new changes for the creation of Estate Planning documents of all kinds.
Continuing consideration of new real estate tools and requirements:
Transfer On Death Instruments: We will continue to watch how the changes made by Illinois Real Property Transfer on Death Instrument Act will affect the use of a transfer on death instrument (TODI), which now allows a propertyowner to identify real or commercial property that they wish to be subject to a TODI. Upon the owner’s death the real property identified in the TODI is to automatically pass to the designated beneficiary(ies) named therein, intending to avoid the need to deal with the real property in the Probate Court. If you are not sure how your family may benefit by the use of a TODI, reach out to discuss your plans and questions.
Changes to the Illinois Residential Real Property Disclosure Act, applicable to all parties to residential real estate transactions on or after May 13, 2022. These changes expanded the definition of a “Seller”, removing prior exemptions for some actors. The new requirements also include modifications to the Seller’s duty to include information about whether the real estate is insured against flooding, and include an ongoing Seller duty to update the Disclosure Report until the time of closing, including any errors, inaccuracies, or omissions of which the Seller becomes aware. In fact, even if the Seller makes a supplemental disclosure, the changes to the law allow a buyer to terminate the contract if the Seller knew about the issue but failed to disclose it in the original Disclosure Report, or if the defect cannot be repaired prior to closing, or if the Seller refuses to repair the defect. A Seller can not just fill out the Disclosure Report at the time of the property listing and then stand on that disclosure with no obligation to provide updates. We are pleased to assist real estate Sellers and their brokers with questions about the transaction and questions about compliance.
With Over 180 New or Amended Illinois Laws There Is Insufficient Room To Discuss Each One. If you have an interest in the many new laws or new changes to existing laws, some of which are arcane and some of which may impact you or your business, reach out to us.
The Illinois State Bar Association Real Property Law Section suggest that attorneys remind their clients who now own or who are purchasing a Chicago home or two-flat that they may be able to apply to have the lead service lines (water pipes) removed from their property for free.
In May 2022, WTTW reported that “lead service lines connect more Chicago homes to water mains than in any other American city, in large part because officials required that lead pipes be used to funnel water to single-family homes and small apartment buildings for nearly a century.”
Lead piping is a significant concern for homeowners, because as federal officials report, there is no safe level of lead in drinking water. Lead is a neurotoxin. It has harmful effects, especially for children and pregnant women.
Mayor Lightfoot rolled out a September 2020 plan to start replacing lead service lines, using federal grant money to remove lead service lines in homes owned by low- and moderate-income Chicagoans. Lightfoot said that would be enough money to replace 650 lead service lines. Originally, eligibility was limited to households that earned less than 80% of the area’s median income and had tap water in their single-family home or two-flat with more than 15 parts per billion of lead. The Chicago program was expanded in July 2021, to include any household with children younger than 18 that earned less than less than 80% of the area’s median income, regardless of whether their home had an elevated level of lead in its drinking water.
Chicago officials have received at least 886 applications for the program, but as of the WTTW May 2022 reporting only 262 applications were approved, and recently WTTW reported that only a little more than 150 homes had the lead service pipes removed/replaced.
If you are interested in applying for program benefits, start here:
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business.
If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
The Illinois State Bar Association Real Property Law Section suggests that our clients be reminded of the opportunity available under The Illinois Family Relief Plan, in effect since this Summer 2022, that provides eligible homeowners an opportunity to receive a rebate in an amount equal to the property tax credit shown on their 2021 Illinois income tax return, up to a maximum of $300.00. For more information, see
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business.
If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
Effective January 1, 2022, Fannie Mae and Freddie Mac announced that they will not purchase loans on condominium units in projects with significant deferred maintenance or unsafe conditions, where there is a failure to obtain a certificate of occupancy, where there is a failure to pass a regulatory inspection, where there has been an issuance of large special assessments, or where there is a failure to reserve 10% of the annual budget for maintenance and repairs. Residential condominium purchasers and their attorneys should be aware, so that additional information beyond the traditional information required by Section 22.1 of the Illinois Condominium Property Act can be obtained in order to allow the buyer’s lender to have the information needed by Fannie Mae and Freddie Mac. For Condominium Associations, this may also mean that the Association may need to review available information and conditions, and be prepared to generate the additional information.
A reminder from the Chair of the Illinois State Bar Association’s Senior Lawyers Section, Don Mateer, in the February 2022 newsletter, is important for us all. Check fraud, including the instances of electronic checks submitted to our bank and financial institutions, is on the rise. Since it has become commonplace for most of us to be using electronic transactions for payment for goods and services, financial institutions will often clear e-checks even if they do not have a signature.
What to do? The first line of defense, Attorney Mateer suggests, is to be vigilant. Review your bank account activity often, and question even small amounts that do not appear to have come from transactions that you initiated or approved. Mateer warns that a missed small amount transaction may tip off a fraudster that you are not checking your account and if they see that is the case, then “the next check could be a lot larger.” Another useful suggestion, he advises, in addition to checking your credit report and putting a freeze there, is considering reaching out to ChexSystems (www.chexsystems.com) as tool to prevent someone from opening a bogus account in your name.
While these suggestions are certainly useful for our senior clients (or their children helping to keep an eye on parents’ accounts and finances), they are good considerations for us all.
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business.
If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
A family operating a collection of companies building single-family homes from their Indiana location found itself on the receiving end of a lawsuit by a court-described intellectual property troll called Design Basics, LLC. The Seventh Circuit Federal Appellate Court explained that Design Basics has filed numerous suits seeking to enforce copyrights in single-family home floor plans – over 100 such infringement suits against home builders in recent years. The goal, however, was not entirely to protect expression but to extract payments through litigation.
In Design Basics LLC, et al. vs Kerstiens Homes & Designs, Inc., et al., decided June 16, 2021, the Court explained that the home design companies license their plans through Design Basics, who acts as a sort of plan broker intermediary between home builders and design firms. Design Basics promotes the copyright designs through publications and materials placed in home improvement stores and other means.
At the heart of the appeal was the two-issue question in this copyright infringement case: whether the builder copied the protected work and whether the copying constituted an improper appropriation (whether the degree to which the design similarity was an unlawful appropriation of Design Basic’s copyright). Continuing a line of cases declining to enforce infringement actions brought by Design Basics, the Court pointed out that the similarities in the home floor plan design asserted by Design Basics were in fact bound up in standard features and functions found in many homes. Design Basics tried to argue that the Kerstiens’ placement of a garage or a laundry room off of the garage, and three standard bedrooms on the second floor of the home, were protectible layouts.
As the Court explained: “Pick any ordinary neighborhood in the Chicagoland area…. The industry standard suburban single-family home is rife with common features for many reasons, but copyright infringement is not among them….’There are only so many ways to arrange a few bedrooms, a kitchen, some common areas, and an attached garage, so not every nook and cranny of an architectural floor plan enjoys copyright protection.’”
The take-away? While the Builders/Developers won an important victory, homebuilders and others are still cautioned to keep an eye out for potential infringement issues. Simply copying another’s distinct layout and design features in toto may result in an expensive lawsuit and potential liability. The award of attorney fees and costs was more than $518,000, and the suit took more than 5 years to the Seventh Circuit’s decision. How many builder/developers are willing or able to defend such a case?
Helpful hints, tools and strategies for our Clients:
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business. If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
June 2021 began a new chapter for Residential Landlords with properties in Cook County.
The new Tenant and Landlord Ordinance has a host of changes imposing additional or modified requirements for leases and lease enforcement.
Landlords are cautioned to review their lease forms, to review security deposit and move-in deposit practices, and to update themselves on new rules concerning actions against defaulting tenants.
Tenants are learning about enhanced rights concerning lease provisions and limitations on landlord activities in and concerning the tenancy.
Helpful hints, tools and strategies for our Clients:
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business.
If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
The Society For Human Resource Management and a recent article by SmithAmundsen LLC in the Illinois State Bar Association’s Illinois Lawyer NOW magazine, highlight for employers the newest and most restrictive and cumbersome law for use of an applicant’s or employee’s criminal conviction history. The modifications to The Illinois Human Rights Act made by this new law permit employers to consider an individual’s criminal conviction history only if there is a substantial relationship between the criminal history and the position sought or held, or if the employer can show that the individual’s employment raises an unreasonable risk to property or to the safety or welfare of specific individuals or the general public, or if otherwise permitted by law. Criminal background checks can still be done, but both reports caution that employers review the significant issues that should be addressed before using the information for employment decisions.
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business.
If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
Expecting trouble with mortgage payments? Are you considering mortgage Forbearance or Deferment as a tool to help?
If employment issues or other concerns are causing pressure for you with your mortgage payments, you may be wondering about the frequent media discussion concerning Forbearance or Deferment as a means of obtaining relief. But they are different mechanisms and homeowners should proceed cautiously.
Forbearance is traditionally different from deferment based upon interest accrual and repayment.
In a mortgage forbearance the interest almost always accrues during the forbearance period, and repayment of the amount is usually in a lump sum at the end of the forbearance period.
Example 1: The loan servicer allows you to stop making principal and interest payments for six months, which gives you a breather. But you have to pay everything back all at once when your payments are due again (and continue to make your regular monthly payments then, going forward).
Example 2: The mortgage servicer lets you reduce the mortgage payments for three months by ½ of the regular payment. After the period of time is over you have one year to pay back the amount of that reduction, including the interest that has accrued, on top of your regular monthly payments during that year.
Deferment, on the other hand,is typically where the lender will agree to defer prior missed payments or to defer some of the homeowner’s future mortgage payments. Interest sometimes but usually does not accrue during the deferment period, and repayment is usually made over time.
Example: The loan servicer agrees to pause your mortgage payments for six months, and that amount is repaid by either adding it to the end of your mortgage loan or by you taking out a separate, second loan.
The benefits? You bring your mortgage current immediately, and you keep your monthly principal and interest payment the same. The deferred amount does not accrue interest until it becomes due at the later time. This can be a better option than foreclosure.
The Take-Away? There is no “one-size-fits-all.” Get as much information as possible from the mortgage servicer before making an arrangement. Start early.
If you make your payments on time prior to commencement of a Forbearance or Deferment, the lender or servicer will still be required to report to the credit agencies that you are not delinquent with your payments. But, if you become delinquent before you start a relief program the lender or servicer may properly continue to advise the credit agencies that you are delinquent with your payments.
Consider all of your options. What are your expectations for your home? Do you intend to remain there? When do you anticipate re-starting your mortgage payments again? Have you considered all other options that may be available to you?
Most importantly, get all of the terms and be sure to review them with a mortgage professional or with your attorney before signing an agreement. And, if you do not expect to stay in your home for much longer, reach out to a real estate broker for input on selling your home.
The Illinois State Bar Association Real Property Law Attorney Section reminds us of two useful hints and strategies:
– Update: Cook County property owners are alerted that the first installment Cook County real property taxes for 2020 are due on March 2, 2021. Keep in mind, though, that the Cook County Board will allow payment through May 3, 2021 of that first installment bill without a late charge being assessed. Other counties may extend the non-penalty date as well.
More information? Reach out to us with your real estate and real property law questions. And for more information about the manner in which your property taxes are determined, billed and paid, contact the Cook County Treasurer’s Office at www.cookcountytreasurer.com or (312) 443-5100.
Helpful hints, tools and strategies for our Clients:
Our blog posts are designed to help you follow up on items that can save you time, save you money and protect many aspects of your life and your business.
If you hear of other hints and helpful strategies that our clients and colleagues may benefit from, please send a note or a link to: mshermanlawoffice@icloud.com
What will life be like for the child or beneficiary to whom you are planning to leave gifts through your Will or Trust? It is sometimes an uneasy discussion. Your Attorney is being realistic, however, not morbid.
Costs Of Medical Care For A Child Or Beneficiary Is An Important Topic
The CDC data from the last several years points to more than half of young adults ages 18 to 34 already having at least one chronic condition. By ages 45 to 54, over half of adults manage multiple chronic conditions, such as obesity, heart issues, arthritis and others. In many situations, these can be managed; but these can often result in the need for substantial care and treatment. The science is catching up. But the cost of medicines, treatments, inpatient care and caregivers is substantial, as we often see with family and friends.
Planning for your own eligibility for Medicaid or other long-term payment sources is essential to protect your life savings and assets from being exhausted by the high costs of long-term care. Planning for the potential long-term needs of your children or other beneficiaries is equally important.
Medicaid and other programs have strict income and asset requirements, and after you are gone the gifts that you leave to a child or beneficiary may affect their eligibility and may require that they use up the inheritance before qualifying. Waiting until after the gift is made can be a poor planning decision.
Debt Issues Facing A Child Or Other Beneficiary Are Equally Important
Often overlooked in the Estate Planning discussion is the potential that a child or other beneficiary may be facing a serious debt issue at the time that they inherit property or assets from you.
Consider that creating a Transfer On Death Instrument (TODI) or identifying the child as a beneficiary for a life insurance policy, an account or in a land trust creates an immediate right and interest in that child or other beneficiary at the time you pass.
If the beneficiary is then dealing with a judgment or potential claim against them (for example, an uninsured claim, or a debt arising from their spending habits or the loss of a job, or other circumstances, whether or not requiring bankruptcy assistance), the judgment creditor or bankruptcy trustee has a direct line to the inheritance. This is obviously NOT a part of your plan.
A frequent misconception about inheriting retirement accounts often avoids discussion, as well. Know that being the beneficiary of an IRA or 401k is NOT going to protect those assets, much to the disappointment of clients who have saved their entire lives to leave a child or other beneficiary the balance of their retirement savings. Since 2014 federal law and most state laws do not protect an inherited IRA or 401k, whether a traditional or Roth product, and whether inherited by a child or other beneficiary, because the proceeds in that person’s hands are not considered ‘retirement funds’.
Today, your retirement accounts may be the largest source of your funds available for the objects of your bounty, But they are rarely part of the discussion when planning for or updating your Estate Planning.
For non-retirement assets, the situation is the same. The tools used to bypass probate court administration and expense do not protect the assets from the reach of a beneficiary’s creditors.
Some clients boast about relying on jointly owned property with right of survivorship, so that when they pass away their beneficiary automatically receives full ownership. Some clients commonly rely on payable-on-death (POD) accounts and beneficiary designations for bank or investment accounts, where named beneficiaries directly receive the property or funds when they pass. Life insurance proceeds are also typically structured so that they are paid directly to the designated beneficiary.
Literature available to the public and social media praise efficiency and probate avoidance as the stated goal. Yet forgetting that these tools are not a shield from the beneficiary’s creditors is forgetting to address an important consideration.
Planning To Fail Or Failing To Plan?
Leaving the consideration of these important topics to your beneficiaries is not a plan. Reducing family stress with reasonable planning to relieve family members of the burden of managing these issues during a critical time is an important consideration.
The thought that a child or beneficiary may face significant life issues at the time they inherit your property and assets is unpleasant. But it is very real, and very important to consider. Asset Protection is a valuable topic both for yourself and for your children and other beneficiaries.
Start the conversation with your Estate Planning Attorney or, if you don’t have one or if you want a second opinion, reach out to Marc Sherman or Maureen Meersman for that discussion. https://mshermanlaw.com/contact/
We are excited to have represented you for the closing of the home sale.
You have signed the Seller documents, including the Deed, Bill of Sale, and other materials, and completed the closing. What’s next?
Our office will send to you a scan of the closing documents for safekeeping, and we will provide you with any “hard” copies that you wish to have.
You will contact utilities (other than water department) to advise them that the property is sold and that as of midnight on the date of closing the utility account should be removed from your name, and tell them where to send your final billing (or perhaps you already have).
You will reach out to the property insurance company to advise them that you have sold the property and closed the sale. This way, if your insurance for the property has been prepaid for any period beyond the closing date, you will be able to request a refund of premiums for the insurance policy (your insurance agent should be able to do that without a concern).
You will put in a change of address with the US Postal Service and contact anyone who you know may be sending important packages or mail, so that they have the new or forwarding address.
You will confirm that any contracts for service (landscaping, snow removal, water softener supplies, HVAC maintenance) that have been in place for the property address are canceled (or perhaps transferred to the new owner).
You will review, once more, the handling of the County real estate taxes post-closing. This includes taxes that will come due in the year or more following the closing for dates of your ownership pre-Closing. If the tax bill comes to you, as the Seller, it is not your bill to pay. Notify our office that you received this.
Finally, you will reach out to your accountant/tax preparer to find out what information they would like to see (usually only the Settlement Statement from the Closing). In this way, they can discuss with you the need to pay any capital gains taxes relating to the sale, or confirm with you that there will be no taxes to be paid.
The Homestead Exemption in Illinois has been a small but useful part of the many exemptions an Illinois resident may assert in the face of enforcement of a judgment or in a bankruptcy. In January 2026 the exemption was increased in a big way.
An Illinois homeowner facing a judgment creditor or a bankruptcy may be threatened with the loss of the equity in their home. Even if the debt or the bankruptcy involves only one of the married homeowners, this can be scary and financially crippling. Under the law, when the homeowner living in their Illinois personal residence has equity in the home, they can in most instances retain the Homestead Exemption amount created by Illinois law if the home is subject to sale to pay a debt or in a bankruptcy.
Most recently, the amount of the exemption was $15,000, and each owner on title that is living in the home gets the same exemption. So spouses were able to claim a $30,000 exemption together.
Beginning January 1, 2026, the Homestead Exemption for Illinois was modified to increase the exemption to $50,000 for each title owner living in the home. Spouses on title are now able to claim an exemption of $100,000, which is a huge difference for those needing to protect equity in their Illinois home.
Who should be thinking about this change in the law?
Estate planners who focus on the intersection of asset protection planning and estate planning will consider the new exemption limits as well.
Estate planning clients often engage in their own planning. Looking to avoid probate costs by putting their children or others on title, or transferring their ownership altogether, is a private strategy often concerning to the estate planning attorney. This may seem useful to the client, but the strategy can backfire and considering the entire picture is essential — especially now with the enhanced Illinois Homestead Exemption.
Lenders and others making loans to homeowners and entering into contracts with homeowners will do well to consider the new exemption when determining whether to do business with a homeowner.
If you have questions about the change in the law, whether for debtor/creditor considerations or estate planning, the Attorneys at Marc D. Sherman & Colleagues PC can set up a consultation. Reach out here for contact information: https://mshermanlaw.com/contact/
Most of us need only basic estate planning. Those with larger estates or unique assets or situations usually need to focus not only on the basic tools, but also on integrating steps in and out of the estate planning documents.
This article is not intended to review all estate planning tools that can be helpful. Instead, it is a call to action — a call to the all-important first meeting or updating review with an Attorney who is experienced in this important area. There is indeed value in discussion, and paying a small fee for attorney consultation can pay dividends!
The basics almost always focus on Powers of Attorney, a Last Will and Testament, and the interplay between life insurance and your accounts that you wish to keep as they are, and a focus on avoiding probate court time and expense. This is fine, but still worth the attorney-client consultation. Add a few other considerations in to the mix, and the discussion may blossom into why a simple, but effective living trust, and other considerations for planning, provide advantages.
These considerations include:
> The amount of money in your estate when you pass (think: estate tax considerations, how the beneficiaries will receive the value and your desire to control how they receive your bequest);
> Issues that you may experience now (consider long-term care needs for yourself or your significant other, asset protection needs arising from your business or other activities);
> Concerns for your beneficiaries, now and later (think: beneficiary special needs due to illness, beneficiary asset protection because of judgments, divorce expected, or other concerns);
> How your traditional IRA and other plans are treated after you have passed away (consider that IRAs and other plans are protected from creditors in most cases during your life, but inherited IRAs and other plans do not afford your beneficiary the same protection after you have passed away); and
> Having real estate interests in more than one State or in another country (consider the need to possibly have a probate court case opened in more than one jurisdiction, and how trust planning or other tools can avoid this concern and expense; and consider that some countries do not recognize U.S. estate planning documents).
These are just a few of the considerations. Every person and every situation is slightly different. Creating a plan is smart planning!
Your financial planner and your accountant are important persons to offer their input. But if they are not also attorneys, then blindly following the recommendations made to you, no matter how well-intentioned, is not smart.
If you would like to have an attorney review your current documents and discuss your personal considerations and expectations, reach out to the Attorneys at Marc D Sherman & Colleagues, PC here: https://mshermanlaw.com/contact/
The Charitable Trust is not for everyone. Our recommendation is not to use Artificial Intelligence or a late-night-television-sponsored company to direct you in this important project. It’s a reasonable place to start gathering ideas, but consult an Attorney for guidance.
Financial planners call the Charitable Trust a “split-interest vehicle” because it typically divides the gift into two parts. There is an income benefit and there is a remainder benefit.
Creating the Charitable Trust in this was allows the person creating the trust, the donor, to provide for provide income for themselves or their heirs now, or by leaving a legacy to heirs, and benefiting charity by interim or final gifts of money or property. There are several considerations, including practical concerns and gifting considerations, and there is no one, all-inclusive trust that fits all situations. Read on:
Technically, the two most often used types of charitable split-interest trusts are called the Charitable Remainder Trust (CRT) and the Charitable Lead Trust (CLT).
The CRT is used if you want income today while maintaining charitable gifting intent. You transfer cash, mutual funds or appreciated securities into the CRT. You arrange to receive income during your lifetime and avoid immediate capital gains taxes. The CRT is a contract, as is any other trust, and when you pass away the remaining assets go to the charity that you direct under the terms of the CRT.
The CLT, or Charitable Lead Trust, directs charitable giving at the time that the CLT is created and leaves a legacy for your family later. The CLT charity receives income first — typically for 10, 15 or 20 years — and then your heirs inherit the remainder. CLTs can also help reduce gift and estate taxes. There are different types of CLTs and the selection is based upon tax, financial and other considerations. Your accountant/tax consultant is an important contributor to this process.
Your goals initially drive the decision-making: Do you need or want steady income, the opportunity to maximize charitable giving, or to preserve wealth for future generations.
This is not for everyone. Individuals and families with significant assets will look to use Charitable Trust to combine philanthropic interests and tax planning. Most people will consider donating directly to their charity of choice. But Charitable Trusts offer additional benefits beyond simply the charitable deduction.
Start with a discussion with your Attorney. If you have questions, it would be our pleasure to discuss the Charitable Trust concept with you. Reach out here: https://mshermanlaw.com/contact/
