January 30, 2009

Cook County's "Norris" Rule

For the most part, closing a probate estate is pretty easy. The executor or administrator signs a document called a final report, and this document -- along with receipts from each beneficiary -- is submitted to the court. That being said, one of the Cook County Rules of Court (this one -- 12.13(c)(iii)) can throw a wrench into the works. Let's look at it:


If a part or all of the estate is distributable to the trustee or trustees of a trust of which each trustee is also a representative of the estate, in addition to the requirements of the Probate Act and unless notice is waived by the person entitled thereto, notice of the hearing on an account under Section 24-2 [755 ILCS 5/24-2] or notice of the filing of a final report under Section 28-11 [755 ILCS 5/28-11], as the case may be, shall be given to each beneficiary then entitled to receive or eligible to have the benefit of the income from the trust. In the case of a beneficiary of the trust who is a minor or disabled person, notice shall also be given to the guardian of the estate of the beneficiary or, if no guardian of the estate has been appointed, to the personal fiduciary for the beneficiary under Section 28-3 [755 ILCS 5/28-3] or, if none, to the spouse, parent, adult child or guardian of the person of the beneficiary. The court in its discretion may waive notice to a beneficiary who is a minor or disabled person if notice has been waived and the account or report has been approved by another beneficiary whose interest is substantially the same as the interest of the minor or disabled beneficiary and who has no conflict of interest.

The key here is the first sentence, which sets out when the Rule (which takes its name from a court case) applies. It's only in situations where (a) a part or all of the estate is distributable to a trust AND (b) the trustee of the trust is also the executor or administrator. In that case, the court wants to make sure that the trust beneficiaries are apprised of any and all actions taken by the trustee in the probate context. After all, this scenario presents a possibility for self-dealing by the fiduciary. So, the trust beneficiaries (actually, just the INCOME beneficiaries) must also receive notice of the closing of the probate estate, and have the right to make sure the probate was handled correctly.

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January 29, 2009

Boot Camp for Executors and Trustees

I'll have more details about this later, but I will be presenting a day-long (six-hour) seminar entitled "Boot Camp for Executors and Trustees" on Friday, April 17 from 9:00 a.m. to 4:00 p.m. (with a one-hour break for lunch, which is included in the seminar price.) This seminar is open to the general public, and may be of interest to anyone who is named as an executor or trustee in someone else's estate planning documents (or anyone who just wants to know more about the probate process). The seminar will be held at my office in Westchester, Illinois, located at 1 Westbrook Corporate Center, Suite 300.

The cost of the seminar is $299, and space is limited to 8 individuals. I will post more information soon, or you can call me at (708) 358-1282 with questions or to sign up.

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January 28, 2009

Scott Boras and Ethics in Negotiation

As regular readers know, I'm a huge baseball fan (go White Sox!). I even enjoy reading about "behind the scenes" stuff, like player negotiations, roster construction, free agency, etc. (I sometimes think I enjoy the hot stove league more than I enjoy the regular one.)

One person at the epicenter of the business side of baseball is Scott Boras, an agent who represents many of baseball's best players. Lots of fans hate Mr. Boras, for reasons that have always seemed very strange to me. That being said, I have occasionally been bothered by some of his behavior for reasons I couldn't articulate. Until now. This article by Jack Marshall does a great job of explaining the huge conflicts of interest that Mr. Boras, or any successful lawyer/agent, encounters in representing his clients.

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January 16, 2009

The Residential Real Property Disclosure Act and Fiduciaries

Illinois typically requires the seller of real estate to furnish a disclosure, pursuant to this statute, regarding the condition of the property being sold. That makes sense, doesn't it? However, when the property in question is part of a decedent's estate, disclosure is more difficult (if not impossible). Let's say that I'm handling my aunt's estate. She lives in Chicago, I live in Florida, and I fly in a couple of times after her death to work on my duties as executor. I go to sell the house -- am I really in a position to opine on the condition of the property? No, of course not. Luckily, the legislature agrees; as a result, the Residential Real Property Disclosure Act is not applicable in the following situations:

(1) Transfers pursuant to court order, including, but not limited to, transfers ordered by a probate court in administration of an estate....

(3) Transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust.

See 765 ILCS 77/15.

January 15, 2009

If I Ran the Cook County Probate Court, Part 2

I blogged here about how I would simplify the court process if I ran the Cook County Probate Court. Sitting in court this morning -- for an HOUR -- made me think of one other idea: computer scheduling. The judges could use a Google Calendar-like application to allow attorneys to schedule routine court hearings online. This would save judge and attorney time as well as client money -- you would not believe how many cases get called only so that the attorney can set another date in 1 or 3 or 6 months.

The application could be set so that only a given number of cases are heard on a judge's daily call. (Maybe 15-20 at the regular 10:00 a.m. call.) If the limit has been reached, you can't schedule on that day.

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January 14, 2009

Details on Formal Proof of Will

I blogged here about the basics involved in a formal proof of Will. Just a couple of practice notes:

-Formal Proof of Will usually means hauling the witnesses to the Will into court, to testify about the following (each of which relates to a specific technical requirement for validity of a Will):

1. Were you present when the testator sign his/her Will?

2. Was another witness present when the testator signed his/her Will?

3. Did you sign the Will as witness in the presence of the testator?

4. Did the other witness sign the Will as witness in the present of the testator?

5. Did you believe the testator to be of sound mind and memory at the time of signing?

This should cover most everything, although there are some different questions to ask if the testator didn't sign the Will but instead directed another person to sign on his/her behalf (which is allowable in some cases). That's obviously a pretty rare occurrence, though.

-What if a witness can't make it to court? Maybe the witness is out of state/country, or is too sick to appear. In that case, section 6-5 of the Illinois Probate Act allows a petition for the court to issue what's called a commission. This allows for the deposition of the witness outside of court. Cook County has PDF forms for this:

1. Petition for Deposition of Witness

2. Commission

3. Deposition

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January 13, 2009

Obama and the Estate Tax

If you haven't read it, today's Wall Street Journal leads off with an article about Obama and the estate tax. Actually, it's about more than just what the President-elect plans to do regarding the tax -- there's also some interesting history about the rise and fall of the anti-estate tax forces, and the battle between the rich anti-estate tax folks and the REALLY rich anti-estate tax folks. The article is here.

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January 12, 2009

Fiduciaries and Power of Attorney

Last Friday I handled a real estate deal -- my client (an estate) sold the decedent's house. The administrator lives out of state and couldn't attend, so I (at the administrator's request) prepared a power of attorney in favor of myself. This is typically done when one/both sellers can't be at the closing, but note that there's an additional wrinkle when a fiduciary is involved. The title company and I had to make sure that my duties as agent didn't amount to a my acting in the administrator's place AS administrator (making important estate decisions and the like). I drafted the power of attorney with specificity, allowing myself only the power to fulfill ministerial functions (really, just signing the closing docs). As a result, the POA was accepted by the title company, and the closing went off without a hitch. The only additional cost to the client was the $54 fee to record the POA (far cheaper than a plane ticket!).

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