Thursday, October 20, 2011
An interesting story on electronic assets and estate planning
The article comes from the BBC in England, but reinforces the points I have made on this blog about the need to consider digital assets in an estate plan.
Monday, August 1, 2011
Are attorneys 24/7?
As some of my readers may know, my office was the victim of the extreme flooding that has happened in the northwest suburbs over the past few weeks. Our office itself was unharmed (we're on the 4th floor!), but the basement of the building we are located in was flooded and is without power for at least the next week.
What to do? Well, we went into emergency action mode. We got everything up and running. Faxes are forwarded to Mr. Reda's house. Our computer server was hosted remotely so we can all access the office from home. We all communicate via email and text. Last, but probably most important, our phones were forwarded to the home of our paralegal. She has been dutifully answering the phones without the benefit of our voicemail system.
She remarked that she took one call over the weekend from a caller looking for an attorney. She explained to them that the office was closed - after all, it was the weekend. The caller, irritated, said "I thought attorneys were 24/7". How far we have come from the days when attorneys got off work at noon on a Friday or took a week to respond to a letter.
These days, everything is immediate. Fax, email, phone. Its all fast. And it takes away from an attorney's real ability to help a client... by THINKING. A monkey can whip up a form. Heck, Legalzoom can give you a form. Is it the form you need? Maybe. Maybe not.
As for attorneys, we have lives outside of work. Yes, we strive to make our client's problems our own and to help our clients. We respond to calls quickly (usually within one business day). But no, we are not 24/7. For that, go to Wal-Mart.
What to do? Well, we went into emergency action mode. We got everything up and running. Faxes are forwarded to Mr. Reda's house. Our computer server was hosted remotely so we can all access the office from home. We all communicate via email and text. Last, but probably most important, our phones were forwarded to the home of our paralegal. She has been dutifully answering the phones without the benefit of our voicemail system.
She remarked that she took one call over the weekend from a caller looking for an attorney. She explained to them that the office was closed - after all, it was the weekend. The caller, irritated, said "I thought attorneys were 24/7". How far we have come from the days when attorneys got off work at noon on a Friday or took a week to respond to a letter.
These days, everything is immediate. Fax, email, phone. Its all fast. And it takes away from an attorney's real ability to help a client... by THINKING. A monkey can whip up a form. Heck, Legalzoom can give you a form. Is it the form you need? Maybe. Maybe not.
As for attorneys, we have lives outside of work. Yes, we strive to make our client's problems our own and to help our clients. We respond to calls quickly (usually within one business day). But no, we are not 24/7. For that, go to Wal-Mart.
Wednesday, July 20, 2011
Hooray! Private residential loans are now allowed again!
Last year, the Illinois Residential Mortgage License Act of 1987 was amended to, among other things, remove the exemption from mortgage licensing from private persons or entities who originate less than three residential mortgage loans in any given year. The law effectively made it illegal for a dad to give a 5% home mortgage loan to his son. The law also made it illegal to sell a property by way of articles of agreement for deed.
Good news! The State of Illinois has once again amended the Illinois Residential Mortgage License Act of 1987 and as of July 14, 2011, the exemption allowing limited private residential loans has been re-added as follows:
This should help out with private transactions on hard to move properties and opens up one additional area of possibility - the articles of agreement for deed aka installment land contract - for sellers looking to move a parcel of real property.
Good news! The State of Illinois has once again amended the Illinois Residential Mortgage License Act of 1987 and as of July 14, 2011, the exemption allowing limited private residential loans has been re-added as follows:
205 ILCS 635/1-4(d)(1.8) Any person or entity that does not originate mortgage loans in the ordinary course of business, but makes or acquires residential mortgage loans with his or her own funds for his or her or its own investment without intent to make, acquire, or resell more than 3 residential mortgage loans in any one calendar year.
This should help out with private transactions on hard to move properties and opens up one additional area of possibility - the articles of agreement for deed aka installment land contract - for sellers looking to move a parcel of real property.
Friday, June 3, 2011
What's the rush when it comes to probate?
My partner, Ed Reda, provides some thoughts on probate and post-death activity:
We often get calls from people whose loved one has just passed away. And by “just passed away” I mean only hours earlier. Frequently they are very concerned about what steps must be taken - immediately - now that their loved one has died. My standard answer is that the only thing that needs to be done immediately is to call the undertaker.
This perception that something needs to be done almost immediately is a vestige of the old Illinois Inheritance Tax, which was repealed in 1981. In the days of the Illinois Inheritance Tax, all assets of a decedent were automatically frozen until a written release could be obtained from the Illinois Attorney General. It wasn’t an onerous or time consuming task to obtain the release, but, people did not want their loved one’s assets tied up - for even a few days. So, some attorneys would counsel their clients to get to the bank right away and close all of grandma’s bank accounts before her obituary appeared in the paper or the news of her death had become public.
The Illinois Probate Code does require that all original copies of a decedent's will be filed with the Clerk of the Circuit Court within thirty days after the date of death. This requirement does not mean a probate estate must be filed, but only that the will itself be brought to the court and turned over to its repository of Last Wills for safekeeping.
The son of one of my oldest clients reminded me of the day his father died. Notwithstanding the fact that I never counseled people to rush to the bank, his mother insisted that they go to the bank and close her husband’s bank accounts, even though her husband had died just minutes earlier. Upon entering the bank that morning, the son told me that the bank guard greeted his mother with “Good morning Mrs. Clay. How’s Mr. Clay today?” Her answer was a classic – “Not good. He’s not feeling well at all today.”
So, when someone close to you dies, take your time to plan their funeral and mourn your loss. There seldom is anything of a legal nature that can’t wait until after the funeral.
We often get calls from people whose loved one has just passed away. And by “just passed away” I mean only hours earlier. Frequently they are very concerned about what steps must be taken - immediately - now that their loved one has died. My standard answer is that the only thing that needs to be done immediately is to call the undertaker.
This perception that something needs to be done almost immediately is a vestige of the old Illinois Inheritance Tax, which was repealed in 1981. In the days of the Illinois Inheritance Tax, all assets of a decedent were automatically frozen until a written release could be obtained from the Illinois Attorney General. It wasn’t an onerous or time consuming task to obtain the release, but, people did not want their loved one’s assets tied up - for even a few days. So, some attorneys would counsel their clients to get to the bank right away and close all of grandma’s bank accounts before her obituary appeared in the paper or the news of her death had become public.
The Illinois Probate Code does require that all original copies of a decedent's will be filed with the Clerk of the Circuit Court within thirty days after the date of death. This requirement does not mean a probate estate must be filed, but only that the will itself be brought to the court and turned over to its repository of Last Wills for safekeeping.
The son of one of my oldest clients reminded me of the day his father died. Notwithstanding the fact that I never counseled people to rush to the bank, his mother insisted that they go to the bank and close her husband’s bank accounts, even though her husband had died just minutes earlier. Upon entering the bank that morning, the son told me that the bank guard greeted his mother with “Good morning Mrs. Clay. How’s Mr. Clay today?” Her answer was a classic – “Not good. He’s not feeling well at all today.”
So, when someone close to you dies, take your time to plan their funeral and mourn your loss. There seldom is anything of a legal nature that can’t wait until after the funeral.
Thursday, May 5, 2011
Facebook posts lead to criminal charges
If you follow this blog, you may have seen my articles about estate planning and the internet. In those posts, I have indicated that we are at an interesting time where law and technology are intersecting and the law is adjusting, albeit slowly, to new technology. The Chicago Tribune published a May 4, 2011 story about a woman who was charged with aggravated battery after getting into a bar fight. This is just one more example of how the legal world is reacting to the online world. Users of social media need to be cautious about what they say and who they say it to. Understanding privacy controls is of extreme importance.
This advice does not extend only to criminal law. I have heard anecdotal evidence of employers who scan thier employee's facebook pages to determine what they are doing on their "sick days". Mortgage lenders have reportedly reviewed social media sites to determine if a borrower's "hard luck" story is true or false. Personal Injury defense attorneys even check social media sites to see if people who claim injuries are, in fact, actually injured. Social media is a double edged sword. It opens up the world to the user and, at the same time, it tracks the user's every word... or admission.
This advice does not extend only to criminal law. I have heard anecdotal evidence of employers who scan thier employee's facebook pages to determine what they are doing on their "sick days". Mortgage lenders have reportedly reviewed social media sites to determine if a borrower's "hard luck" story is true or false. Personal Injury defense attorneys even check social media sites to see if people who claim injuries are, in fact, actually injured. Social media is a double edged sword. It opens up the world to the user and, at the same time, it tracks the user's every word... or admission.
Wednesday, April 27, 2011
Interesting times for Illinois lawyers
The Rules Committee of the Illinois Supreme Court is seeking comments on a proposal to allow jurors to question witnesses in civil trials. The Supreme Court of Illinois in a news release today indicated that anyone wanting to testify at a public hearing needs to let the Committee know in writing by May 13, 2011 and anyone wanting to offer written comments needs to do so by May 6, 2011.
Such a proposal is a sea-change in the way litigation would be done in Illinois. Currently, jurors are not allowed to question a witness. The Supreme Court release indicates that about half of the states in the US allow jurors to question witnesses.
A hearing will be held on the topic on May 20, 2011 at 10am in Room C-500 at 160 N. LaSalle, Chicago.
The proposed amendment can be found here
Such a proposal is a sea-change in the way litigation would be done in Illinois. Currently, jurors are not allowed to question a witness. The Supreme Court release indicates that about half of the states in the US allow jurors to question witnesses.
A hearing will be held on the topic on May 20, 2011 at 10am in Room C-500 at 160 N. LaSalle, Chicago.
The proposed amendment can be found here
Monday, April 25, 2011
Time to Make a Will?
My partner, and the smartest attorney I know, Ed Reda, penned today's blog post about the "right time" to make an estate plan. Is it ever too late to make a will?
At various times in our life, most of us have thoughts about the need to make a will. Most of us put that task off by telling ourselves we will get to it later. But is there a time when it is too late to make a will? Surprisingly, the answer is a resounding “Yes.” Here is an actual fact pattern that happened to me today.
I received a call from a fellow we will call Ralph indicating that his friend, Dave, was in Resurrection Hospital and wanted to make a will. I asked Ralph what was Dave’s medical condition and he replied that Dave had Stage IV lung cancer and was receiving hospice care. I asked Ralph why he was calling me instead of Dave. He replied “Dave is really weak and can’t hold the phone. He asked that I get an attorney for him.”
The red flags popped up all over. First, any time someone other than the client calls to engage your services, an attorney should proceed with caution. Does this person have an ulterior motive? Why isn’t the client calling? Ralph’s response to my question didn’t put me at ease. Any time an attorney is called to a hospital to do a will, there is a stronger than normal chance that some heir or relative, disappointed in the terms of the will, can challenge the competence or capacity of the client after his or her death. The reason is obvious–people in hospitals are not well, and therefore, oftentimes not thinking clearly or in charge of their emotions.
Finally, wills prepared and signed shortly before a person’s death are also often subject to challenge. Once again, a person days from their death is likely very sick and oftentimes, because of either their medical condition or the medications they are receiving, not completely lucid. When the client is in hospice care, suffering with Stage IV cancer and too weak to hold a phone, the risks of the will being challenged, and the attorney being criticized for preparing it (or worse, being sucked into litigation) increase exponentially.
For all of the above reasons, I declined to accept this assignment. I feel somewhat badly for Ralph’s friend, since he may die without a will, or without a will that expresses his current feelings. But, he has brought that problem on to himself. A person truly can wait too long to make a will.
At various times in our life, most of us have thoughts about the need to make a will. Most of us put that task off by telling ourselves we will get to it later. But is there a time when it is too late to make a will? Surprisingly, the answer is a resounding “Yes.” Here is an actual fact pattern that happened to me today.
I received a call from a fellow we will call Ralph indicating that his friend, Dave, was in Resurrection Hospital and wanted to make a will. I asked Ralph what was Dave’s medical condition and he replied that Dave had Stage IV lung cancer and was receiving hospice care. I asked Ralph why he was calling me instead of Dave. He replied “Dave is really weak and can’t hold the phone. He asked that I get an attorney for him.”
The red flags popped up all over. First, any time someone other than the client calls to engage your services, an attorney should proceed with caution. Does this person have an ulterior motive? Why isn’t the client calling? Ralph’s response to my question didn’t put me at ease. Any time an attorney is called to a hospital to do a will, there is a stronger than normal chance that some heir or relative, disappointed in the terms of the will, can challenge the competence or capacity of the client after his or her death. The reason is obvious–people in hospitals are not well, and therefore, oftentimes not thinking clearly or in charge of their emotions.
Finally, wills prepared and signed shortly before a person’s death are also often subject to challenge. Once again, a person days from their death is likely very sick and oftentimes, because of either their medical condition or the medications they are receiving, not completely lucid. When the client is in hospice care, suffering with Stage IV cancer and too weak to hold a phone, the risks of the will being challenged, and the attorney being criticized for preparing it (or worse, being sucked into litigation) increase exponentially.
For all of the above reasons, I declined to accept this assignment. I feel somewhat badly for Ralph’s friend, since he may die without a will, or without a will that expresses his current feelings. But, he has brought that problem on to himself. A person truly can wait too long to make a will.
Thursday, March 31, 2011
Reminder on Capital Gain Tax Law Change for Primary Residence
A change in the Housing Assistance Tax Act of 2008 changed the rules regarding capital gains on the sale of a primary residence. Under the prior system, homeowners were able to exclude up to $250,000 ($500,000 for married couples) worth of capital gains on the sale of a primary residence. One of the rules in order to qualify for the capital gain exclusion was that a property owner had to use the real estate as a principal residence for at least two of the previous five years. As such, homeowners with rental and vacation property began to sell their primary residence without capital gain and then moved into their second home or rental property so that they could avoid capital gain upon sale of that property also.
The Housing Assistance Act of 2008 sought to close that loophole. The new law will allow the exclusion of a portion of the capital gain based upon a new formula that seeks to take into account years that the real estate was not used as a primary residence. Use of the real estate as a primary residence has been termed "qualifying use" and use of the real estate for other purposes is called a "non-qualifying use".
Beginning on January 1, 2009, capital gains are determined based upon the following formula:
(Time of non-qualifying use after 1-1-09) divided by (time of total ownership) = % of exclusion
One benefit here is that non-qualifying use for periods before January 1, 2009 do not count for purposes of making the calculation. Obviously, properties that have been used exclusively as a primary residence will be eligible to exclude the entire gain up to $250,000 ($500,000 for married couples).
As a result, property owners who have held non-primary residence real estate for long periods of time can still take advantage of major tax savings by converting non-qualified property into qualified property (because all non-qualifying time prior to 1-1-09 is not included). It makes sense to evaluate capital gains strategy based on this law.
Friday, March 11, 2011
A small timeout to protest
Governor Quinn imposes internet sales tax. Really?
No, Gov. Quinn, really?
No, Gov. Quinn, really?
Thursday, January 20, 2011
For you doctor's, dentists, and other service professionals out there... time to register your LLC
As of January 14, 2011, the Illinois Department of Financial and Professional Regulation (IDFPR) is requiring Limited Liability Companies formed by dentists, doctors, social workers, clinical professional counselors, social workers, veterinarians, clinical psycologists, marriage and family therapists, or any other profession licensed by the IDFPR to register with the Department's Division of Professional Regulation.
Tuesday, January 18, 2011
Other Digital Assets and Estate Planning
Here is part seven in my series on digital assets and estate planning. Interestingly, the rest of the world is picking up on this topic. Here is a recent article from the new york times on digital assets.
There are a number of other types of digital assets that deserve consideration when planning an estate. These can be web site accounts or actual assets in digital form. Here is a brief general survey.
There are a number of other types of digital assets that deserve consideration when planning an estate. These can be web site accounts or actual assets in digital form. Here is a brief general survey.
Thursday, January 6, 2011
State of Illinois Security Deposit Rate Set
Okay folks, the interest rate for security deposits on properties covered by the State of Illinois Security Deposit Interest Act (generally, 25 or more units) for 2011 is 0.195%.
Once again, this rate is greater than the Chicago rate, so Chicago landlords governed by both the Illinois Security Deposit Interest Act and the Chicago Residential Landlord Tenant Ordinance should use the Illinois rate for 2011 rentals.
Once again, this rate is greater than the Chicago rate, so Chicago landlords governed by both the Illinois Security Deposit Interest Act and the Chicago Residential Landlord Tenant Ordinance should use the Illinois rate for 2011 rentals.
Monday, January 3, 2011
City of Chicago Sets 2011 Security Deposit Interest Rate
The City of Chicago City Comptroller, Steven J. Lux, has released the security deposit interest rate for the coming year. The rate is determined by the City Comptroller based upon the average rates of interest as of 12-31-10 of a number of types of Chase Bank accounts.
The rate to be applied pursuant to 5-12-080 of the Chicago Residential Landlord Tenant Ordinance for leases governed by the periods from January 1, 2011 through December 31, 2011 is 0.073 percent.
I will publish the State of Illinois rate as soon as I learn it. Keep in mind, last year the State of Illinois rate was higher than the City of Chicago rate, so landlords governed by both the City of Chicago and State of Illinois law should have used the State of Illinois rate.
The rate to be applied pursuant to 5-12-080 of the Chicago Residential Landlord Tenant Ordinance for leases governed by the periods from January 1, 2011 through December 31, 2011 is 0.073 percent.
I will publish the State of Illinois rate as soon as I learn it. Keep in mind, last year the State of Illinois rate was higher than the City of Chicago rate, so landlords governed by both the City of Chicago and State of Illinois law should have used the State of Illinois rate.
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