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November 05, 2015

New Illinois Statute Creates Presumption of Invalidity as to Transfers to Caregivers Over $20,000

 in Trusts & Estates

A new section in the Illinois Probate Act, 755 ILCS 5/4-a, et seq., titled "Presumptively Void Transfers," which  took effect January 1, 2015, creates a rebuttable presumption that a document that transfers assets upon a person's death, referred to as a "transfer instrument," that transfers $20,000 or more to a caregiver is invalid. The intent of the new law is to deter caregivers from using their influence improperly. The new legislation shifts the burden to caregivers to prove by clear and convincing evidence that such a transfer was not the result of undue influence.
 
The statute has broad application since "caregiver" is defined as someone who, whether paid or unpaid, assumes responsibility for the care of another who needs assistance with activities of daily living. The definition also extends to the caregiver's spouse, cohabitant, child, or employee. The definition specifically excludes family members of the decedent.
 
Once a transfer instrument is challenged, the caregiver may overcome the presumption in two ways: (i) by showing that the amount left to the caregiver in the transfer instrument is not more than the amount that was left to her before she became the decedent's caregiver; or (ii) by proving by clear and convincing evidence that the transfer to the caregiver was not the product of fraud, duress, or undue influence. If the caregiver attempts and fails to overcome the challenge to the transfer instrument, the caregiver may then be held responsible for the costs of the proceedings, including reasonable attorney's fees.

In light of the new law, careful estate planning is essential to memorialize the true intentions of the transferor to be able to rebut the presumption.  For more information or to discuss specific questions or recommendations please contact the author of this alert or another of the attorneys listed below.
 
Horwood Marcus & Berk Chartered has a group of experienced estate planners and litigators that focus on trust and estate litigation. They represent trustees and beneficiaries in controversies relating to trusts and estates such as trust contests, will contests, accounting actions, petitions for instruction, undue influence claims, breach of fiduciary duty actions, as well as a wide range of other fiduciary litigation.
312-606-3233
jzaluda@hmblaw.com
312-242-3305
jwiktor@hmblaw.com
312-242-3302
ascott@hmblaw.com
312-606-3214
sgiannoulias@hmblaw.com
312-606-3221
bkatris@hmblaw.com
312-606-3239
dberek@hmblaw.com

This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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Welcome to HMB's SALT & Pepper blog. As the title suggests, this blog tracks important and emerging issues, trends and developments that affect our clients not only in State and Local Tax (SALT) but also in other disciplines and industries. This blog is designed to be a helpful resource. We hope our readers will find it practical, insightful and valuable.

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