Monthly Archives : April 2011

Illinois And Civil Unions
April 26, 2011 no comments in Elder Law, Estate Planning, General Information, Health Care Decision Making by

Illinois And Civil Unions

Effective June 1, 2011, pursuant to P.A. 96-1513, Illinois will join several other states that permit registration of a civil union between two consenting adults of the same gender.   The law specifically states that a party to a civil union shall be included in any definition of the term “spouse”, “family”, “immediate family”, “dependent” and the like that denote a spousal relationship.    In addition, Illinois will recognize as civil unions similar relationships entered in other jurisdictions (other than common law marriage).  For example, some states recognize “same sex” marriage” or “domestic partnerships.”

From an estate planning perspective, partners in a civil union will receive the same protection as a spouse under the Illinois Probate Act, meaning that a partner will have priority to act as in matters related to intestate death administrations, the same rights as a surviving spouse to inherit intestate property and to claim against the will.

Tax issues will remain in flux.  The Illinois Civil Union Act stands in contrast to the 1996 federal Defense of Marriage Act.  For the time being, there will be continuing issues in connection with the different tax treatment afforded spouses at the federal level than will be available to partners in a civil union registered under Illinois law.

What and When to Shred
April 22, 2011 no comments in Elder Law, General Information by

What and When to Shred

Certain documents should be shredded now, such as credit card applications or expired documents, including credit cards, passports, visas, and identification cards.

Tax returns and the supporting documentation i.e. cancelled checks/ receipts; charitable contributions, mortgage interest, retirement plan contributions, and records of tax deductions taken, should be kept at least 7 years.     The IRS has 3 years from your filing date to audit your return for good faith errors and 6 years to challenge a return for under-reported income.

For seniors, retaining these records will be critical if a loved one ever needs long term nursing care.  Medicaid can require five years of canceled checks, bank and brokerage statements, and other financial documents.

If you have made nondeductible IRA contributions, those records should be kept for as long as necessary to establish that you have already paid tax on the money when it comes time to withdraw.

Brokerage statements and other documentation such as purchase or sales slips from your brokerage or mutual fund should be retained until the security is sold so you can establish capital gain or loss.

REVERSE MORTGAGES
April 8, 2011 no comments in Creditor Protection, Elder Law, Estate Planning, General Information by

REVERSE MORTGAGES

On April 4, HUD published Mortgagee Letter 2011-16 which reinstates its original non-recourse policy for the Home Equity Conversion Mortgage (HECM) reverse mortgage program. Now the HECM borrower, as well as the Estate of a deceased borrower, are protected by the non-recourse provision of the program no matter who purchases the home at the time of repayment, even if that homebuyer is a surviving spouse, family member or relative. This is a very important change.     Non-recourse means that the lender cannot seek a deficiency judgment against the borrower, his or her estate, or a family member who might purchase the home from the estate. Mortgagee Letter 2008-38 (issued in 2008) limited this non-recourse feature to arms-length purchases.