Monthly Archives : April 2010

Passing on Passwords: Your Online Legacy

If you manage your financial assets online, pay bills online, bank online, use photo sites, participate in virtual communities or simply use email, it is important that you consider how your family will access those accounts should you become incapacitated or upon death.   Many popular Internet services have policies barring access, short of a court order, unless someone has the password.

Your estate plan is not complete unless you begin to think about what happens to all your online data.    Legacy Locker is one of many companies that offer a secure way to pass online accounts to loved ones.  As an alternative consider keeping a portable flash drive with usernames and passwords and let a family member or friend know its whereabouts.

Are Inherited IRAs Protected from Creditors?

Illinois as well as Federal Bankruptcy Law protects IRAs from creditors.  With the advent of inherited IRAs, whether creditor protection extends to these assets is far from clear.  There continue to be conflicting cases throughout the nation.  In a recent Texas case, the bankruptcy court determined that the IRA inherited by the debtor from his mother was not the equivalent of an IRA and consequently not creditor protected. In re Chilton, No. 08-43414 (Bankr. E. D. Tax. Mar. 5, 2010)    A Minnesota bankruptcy court found the opposite-that inherited IRAs were protected from the debtor’s creditors.   In re Nessa, No. BKY 09-60081 (Bankr. D. Minn. Jan 11, 2010)

Proposed SB3613 creates “Presumed Consent” for Organ Donation

 Illinois Senator Dale Risinger has introduced a bill that would reverse the current approach to organ donation.  SB3613 would amend the Illinois Anatomical Gift Act to provide that each competent resident of Illinois over age 18 would be presumed, by operation of law… “to have given all of his or her body for any for organ donation purposes”… without the need for consent of any survivor.  Under current practices, an Illinois resident can exhibit his or her consent for organ donation a number of ways: (a) by joining the Illinois First-Person Consent Organ/Tissue Donor Registry ( or 1-800-210-2106) maintained by the Illinois Secretary of State, (b) by so indicating on a valid Illinois Durable Power of Attorney for Health Care form; (c) by otherwise affirmatively complying with the Illinois Anatomical Gift Act.  If the resident has not indicated his or her consent or disagreement regarding organ donation, organ donation could still occur with family consent.  Under the proposed bill, an individual would have to affirmatively opt out of the statutory presumed consent for organ donation.  SB 3613, if passed, would be effective on or after July 1, 2012.  To check on the bill’s status, go to

Charitable Gift Annuities

A charitable gift annuity (CGA) is a contract between you and your designated charity.  For some clients, the CGA can increase retirement income while also supporting a favorite charity.  Simply, you make an irrevocable gift of cash or stock to the charity, and in return, the charity makes regular fixed payments, often at fairly attractive rates, to you, you and your spouse, or someone you name, for life.   Among other benefits, the donor receives a tax deduction in the year of the gift and there can be capital gain savings on appreciated donated property.   The charity receives what is left of the gift after lifetime.

Proposed Changes to SSI Asset Test

On March 24, 2010 the SSI Savers Act of 2010 (H.R. 4937) was introduced to reform the asset test in the Supplemental Security Income (SSI) program.  SSI provides monthly cash payments to people with disabilities, among others.  Currently, to be eligible for SSI, the applicant must have assets of $2,000 or less ($3,000 or less for a couple).  SSI counts all resources available to the applicant, including retirement accounts, such as 401(k)s and IRAs.   H.R. 4937 is intended to provide savings incentives in SSI in a number of ways, among them, by raising the asset limit to $5,000 for an individual and $7,500 for a couple and excluding retirement savings for non-institutionalized individuals under age 65.

Durable Powers of Attorney for Health Care and Property Pending Legislation

HB6477, which is making its way through the General Assembly, makes numerous substantive changes to the Illinois Durable Power of Attorney Act.  Among them, provisions relating to an agent’s record keeping and disclosures, and remedies when agents abuse his or her duties.  In addition, more and more institutions require a certification that the document is in effect. The pending legislation provides an agent  certification form for that purpose.  The changes would also confirm that the agent under the Health Care Power of Attorney, as an authorized representative under HIPAA, would be authorized to disclose confidential health information.

Tenants by the Entirety Pending Legislation

Tenants by the entirety is a form of ownership available to spouses on their primary residence.  Holding title as tenants by the entirety provides spouses greater creditor protection for their home.  This creditor protection is lost when spouses convey their primary residence into revocable living trusts for estate planning purposes.  HB5282, if passed, would continue the creditor protection when the primary residence is conveyed to a revocable living trust where both the husband and wife are the primary beneficiaries of the trust(s) and the document specifically states that the interests of the husband and in the primary residence is held as tenants by the entirety.