Covid-19 Executive Order and Estate Planning

                In an unprecedented action, Governor Pritzker signed Executive Order 2020-14 changing the way lawyers can offer assistance to those most vulnerable to Coronavirus. The virus is making in person “Execution Ceremonies” (signing the document) counter productive to the CDC’s recommendation of social distancing. The Executive Order states that during the Gubernatorial Disaster Proclamation, remote notarization and witnessing shall be allowed with the following stipulations:

1. The witnesses and notary must have audio and visual communication throughout the entire ceremony. 
2. The signatory must attest that they are physically located in Illinois. 
3. The video interaction must be recorded and the record must be preserved for three years. 
4. The signatory must transmit the document to the notary the same day (within 24 hours).
5. Witnesses may sign original within 30 days of the execution of the document.

If you have not completed your estate planning documents, most especially your powers of attorney, please contact The Law Office of Jonathan W. Cole at (708) 529-7794 to ensure you are protected.

Your bank won’t honor your Power of Attorney…Now What?

Over the years, I have some clients tell me that their bank didn’t honor their Power of Attorney and they don’t know what to do. The stories are consistent, an adult child was named the primary agent for their elderly Mom, since Dad had recently passed. Mom has become immobile so that the adult child must manage mom’s financial affairs and fulfil their agent role under the provisions of Mom’s Power of Attorney. This scenario is exactly what the Illinois Legislature had in mind when they drafted the Illinois Power of Attorney Act.

            The purpose of the act is to recognize that everyone has the right to appoint an agent to make property, financial, and personal decisions throughout the principal’s lifetime, including during periods of disability. It provides a principal with confidence that a third party, like a bank, would honor the agent’s authority at all times. Lawmakers wanted to give principals peace of mind knowing that their affairs would be efficiently handled, despite any present or future infirmity. However, banks, in their desire to limit their own liability, frequently refuse to honor a validly executed power of attorney. This defeats the desires of a principal, who is unable to manage their personal matters. How will the adult child in the above scenario, help their mother pay bills? How will the adult child convince the bank to honor their elderly mother’s power of attorney? This is where an experienced attorney can help.

            The Illinois Power of Attorney Act gives the mother and adult child the ability to use an attorney to put some teeth into the banks refusal to act upon a validly executed document. The best method to take a bite out of the bank is by utilizing an attorney to enforce the Illinois Power of Attorney Act, specifically, 755 ILCS45/2-8(d). The statute states:

(d) each person to whom a direction by the named agent in accordance with the terms of the copy of the document purporting to establish an agency is communicated shall comply with that direction, and any person who fails to comply arbitrarily or without reasonable cause shall be subject civil liability for any damages resulting from noncompliance.

            The financial institution and even the banker personally may be liable to the agent and principal for any losses or damages resulting from the bank refusal to comply with the directions of a validly executed Power of Attorney. Once a client has contacted our office, we will work quickly to ensure the bank’s compliance with the Illinois Power of Attorney Act and ensure that the adult child in the above scenario can act on their mother’s behalf in the most effective  manner available. The Law Office of Jonathan W. Cole has the knowledge and the power to ensure the bank’s compliance, either through a simple communication, or by litigation, if necessary. Give us a call at (708) 529-7794. We can resolve this issue. 

Oak Lawn Estate Planning | It may be time to review your Trust

 Effective January 1^st of this year, the Illinois Legislature enacted new Trust laws. These laws will mostly relate to newly drafted trusts but if you already have an existing trust, this would be a good time to go back to your lawyer’s office to ensure your existing trust is still in compliance with existing law and determine if these new provisions could provide additional opportunities to further your estate planning goals.  

 One important change is that trustees are now allowed to change the place of administration of the trust after providing notice to beneficiaries. This can be helpful to ease the administration of your trust, especially if your beneficiaries and successor trustee live in another state.

The new trust law, Section 760 § 414(a-b) also allows for the modification or termination of a trust if the burden of administering the trust outweighs the purpose of the trust. Your successor trustee may terminate your trust if the value of the trust property is under $100,000.00 and the costs of continuing the trust will substantially impair accomplishing the purpose of the trust. The court could also modify or terminate a trust or remove a trustee and appoint a different trustee if it determines that the value of the assets in the trust are insufficient to justify the cost of its administration. Pet lovers take note, this will not apply to trusts for domestic or pet animals. You should ensure your attorney adds these provisions into your trust to ensure the best financial care for your pet.

Another new provision of the code is that the trustees will now have up to 120 days to determine if they want the role. If your trust outlines a method for a successor trustee to accept trusteeship, that method will be honored. If the trust does not provide a method of accepting trusteeship, the potential successor trustee has up to 120 days to accept that position. If he or she does not accept that position within the prescribed time frame, they are deemed to have declined the trusteeship. Additionally, any potential successor trustee may inspect the trust property to determine if there are any potential liabilities under environmental, or other laws. He or she may choose to act to preserve trust assets without accepting the trusteeship if the successor trustee acts within the 120 days and in good faith. These provisions are outlined in Section 760 § 701 of the act.  

Finally, the trust code now creates additional duties to inform and account to beneficiaries of an irrevocable trust. The trustee shall notify each qualified beneficiary of the trust’s existence, the right to receive a complete copy of the trust instrument, and whether the beneficiary has a right to receive or request trust accounting. The trustee must also inform qualified beneficiaries within 90 days of their name, address, phone number, or later any change in their contact information. The trustee must notify the beneficiaries in advance regarding a change in their compensation or of their anticipated resignation. A trustee must send a trust accounting “at least annually” to all current beneficiaries.

These changes could create pitfalls and landmines for any trustees managing the assets held within a trust. For help with creating, administrating, or reviewing your trusts, please don’t hesitate to call my office at (708) 529-7794 or check out my website at www.jwcolelaw.com.