New Illinois Laws for 2016, Part 1: Probate, Trusts & Estate Planning
Happy New Year!
As I did for 2015, I want to update readers on select new laws that took affect either 1/1/16 or earlier in 2015. A total of 237 new laws went into affect at the start of the year.
This week I will highlight 6 noteworthy laws in the areas of probate, trusts and estate planning. Part 2 next week will highlight several new laws relating to guardianships, family and health.
New Illinois Laws for 2016: Probate, Trusts & Estate Planning
1. Illinois Power of Attorney for Health Care Tweaked for 2016. Public Act 099-0328 (eff. 01/01/16) makes several adjustments to the Illinois statutory power of attorney for health care form that originally went into effect January 2015. My December 16 blog post covered these changes in detail.
2. Certification of Trust Form. Public Act 099-0337 (eff. 08/10/15) creates a new statutory form that can be provided to third parties instead of giving a full copy of the trust instrument. The certification form need not include the dispositive terms and third parties are entitled to rely on the statutory certification. We have been using this — clients enjoy being able to provide a 2-page summary to financial institutions containing only necessary information rather than a full copy of their (25 to 30 page) trust.
3. Will Created by Disabled Testator Presumed Void. Public Act 099-0302 (eff. 01/01/16) amends the definition for testator capacity found in 755 ILCS 5/4-1. There is a new rebuttable presumption that a will or codicil is void if the testator has been adjudicated disabled and either a plenary guardian has been appointed, or a limited guardian has been appointed along with a court finding that the disabled person lacks testamentary capacity. The rebuttable presumption does not apply if the court has entered an order authorizing creation of the will or codicil. If the rebuttable presumption applies, it may be overcome only with clear and convincing evidence that the testator possessed testamentary capacity.
4. Probate Rights of Posthumous Children. Public Act 099-0085 (eff. 01/01/16) is the Illinois Parentage Act of 2015, which is a complete rewrite of the statute that determines parentage and parental rights. One portion of the new Parentage Act makes a change to the Probate Act at 755 ILCS 5/2-3 relating to posthumous children of a decedent. With advances in technology, it became necessary to clarify when posthumously born and/or conceived children are considered children of a decedent for probate inheritance purposes. Different states have addressed this in a variety of ways. Illinois chose to draw a bright line providing that a posthumous child is a child of the decedent, but only if that child was in utero at the decedent’s death. Thus, a child born from frozen embryos or sperm implanted after decedent’s death would not be included under the Probate Act (although one could provide different terms in a will or trust).
5. Procedure to Foreclose on Deceased Mortgagor. Public Act 099-0024 (eff. 01/01/16) reduces the situations in which a special representative must be appointed for a deceased mortgagor. 735 ILCS 5/15-1501(h) is amended to eliminate the need for a special representative when: (a) there is a beneficiary under a transfer on death instrument, (b) title was conveyed prior to death to a person(s) or entity, (c) title has already been transferred through a probate estate, or (d) title was conveyed to a trust prior to death.
6. Illinois Enables ABLE Accounts for Disabled Individuals. Public Act 099-0145 (eff. 01/01/16) is the Illinois statute enabling the creation of ABLE (Achieving a Better Life Experience) accounts — savings accounts for disabled individuals that are akin to Section 529 plans for education savings. This is based on the federal statute passed by Congress in 2014. ABLE Accounts are intended to allow disabled individuals to save up to $100,000 in a tax-free fund to pay for qualified disability expenses without disqualifying the individual from public benefits such as Medicaid and SSI. As far as I know, these accounts are not yet available in Illinois, but should be within the year. There are a number of important caveats and limitations such that, while these accounts can be useful for disabled individuals in certain situations, it is not a substitute for comprehensive planning with special needs trusts. For summary and explanation, I recommend reading:
- Will Section 529A ABLE Accounts Replace The Need For Disabled Beneficiary Special Needs Trusts? — by Michael Kitces
- Achieving a Better Life Experience (ABLE) Act — by National Down Syndrome Society
- Achieving a Better Life Experience (ABLE) Act Division B of Public Law 113 -295, December 19, 2014 — by The Arc
Next Week: New Laws — Guardianships, Family & Health
Next week I will highlight several new laws in these related practice areas. For some local media articles highlighting select new laws, check out:
- 25 New Illinois Laws in 2016 That May Change Your Life — by Joliet Patch
- 10 new Illinois laws for 2016— by Pantagraph
- New 2016 Illinois laws: Police body camera fee, gay conversion therapy ban — by Chicago Tribune
For a good chart summary of all new laws, read here.