Tag Archives: DuPage County estate planning lawyer

Charitable Trusts in the Time of Giving

charitable trust IMAGEWith taxpayers owing such a high percentage of taxes on almost any type of long-term gain, in addition to other taxes –such as the Medicare surtax – those in the top tax brackets might consider establishing charitable remainder trusts for donations of highly-appreciated assets. A charitable trust is a trust established for some charitable purpose. Charitable trusts are limited in what they can do; they must fit into a certain category established by the law.

 Setting up a Charitable Trust

In order to establish a charitable trust, you must first create the trust and donate the property to the trust that will eventually pass to a charity that is approved by the IRS. The trustee will manage or invest the property to produce an income. A charitable trust can pay the person who established the trust a certain percentage of the income that was made from the trust over an agreed upon payment timeline.  After the person that established the trust passes away, the charity becomes the owner of the property.

 Why establish a charitable trust?

An income tax deduction may be available for the value of the property given to the charitable trust. The IRS will consider the value of the property and the amount of income you may receive from the trust in determining your deduction.

In addition to receiving tax benefits, remember that you are also doing something beneficial for an organization that works to put a little extra good in the world.  Current laws make charitable trusts irrevocable. Hence, while you may be able to obtain a cash flow from the property for the remainder of your life, the property cannot be sold later or given to an heir. The administration and management costs associated with charitable trusts should be carefully considered.

Charitable trusts are a great way to give back to your community, and gain a benefit for you as well. If you have any questions regarding charitable trusts, or any other estate planning questions, reach out to an experienced Illinois attorney today.

 

Problems with Deathbed Planning

End-of-life preparations are not easy, even when an experienced estate planning attorney is involved. Things become even more complicated when one makes said preparations later in life. In these cases, the probability of disputes from the beneficiaries increases because of the suspicion that elderly people are prone to undue influence.

 Thus, litigation may follow whenever a person makes drastic changes to their will shortly before dying, especially when they disinherit family members for the benefit of non-family members.

Even high-worth individuals may encounter difficulties with their estate plans. Take the case of the copper mining heiress Hugguette Clark, who left behind an estate worth nearly $300 million.

Ms. Clark died at the ripe old age of 104.

She spent the last two decades of her life in a hospital, where she was cared for at $400,000 per year. In 2005, she executed a new will that disinherited most of her distant relatives, and gave significant sums to people involved in her everyday care, including her lawyer, doctors, hospital, goddaughter and her nurse (who received several millions dollars).

However, another will that was in existence only six weeks prior to the new will had left her distant relatives nearly $30 million. Needless to say, the sudden and significant change would cause even the most trusting of minds to be suspicious.

The relatives, who were disinherited in the second will, filed suit to void the second will. They argued that the non-family beneficiaries took advantage of their close position with Ms. Clark to exert undue influence on the elderly person. The beneficiaries of the new will, on the other hand, argued that Ms. Clark seldom spoke to her distant relatives and that her decision to execute the new will reflected her appreciation for the care and dedication that her caregivers had shown toward her.

The dispute ended in a tentative deal that included the distant relatives in the distribution scheme and excluded her lawyer and nurse (the doctor relinquished his portion of the inheritance).

An experienced Illinois estate planning attorney can assist clients with addressing these types of issues. If you have questions regarding your estate plan, or the will or trust of a recently departed family member, contact an attorney today.