Monthly Archives : August 2014

Eligible Wartime Periods for V.A. Pension Benefits

ELIGIBLE WARTIME PERIODS FOR V.A. PENSION BENEFITS

If you, or your deceased spouse, served during wartime you may be eligible to receive V.A. pension benefits or Spousal benefits. The V.A. recognizes the following wartime periods to determine eligibility for VA Pension benefits:

  • World War I (April 6, 1916 – November 11, 1918)
  • World War II (December 7, 1941 – December 31, 1946)
  • Korean conflict (June 27, 1950 – January 31, 1955)
  • Vietnam era (February 28, 1961 – May 7, 1975 for Veterans who served in the Republic of Vietnam during that period, otherwise August 5, 1964 –  May 7, 1975)
  • Gulf War (August 2, 1990 – through a future date to be set by law or Presidential Proclamation)
Senate Bill to Reduce LLC Filing Fees in Illinois House for Consideration

SENATE BILL TO REDUCE LLC FILING FEES IN ILLINOIS HOUSE FOR CONSIDERATION

Currently Illinois LLC fees are among the highest in the nation. To address this, the Senate, on April 1, 2014 passed SB 2776 (the bill) with bi-partisan support and without opposition. The bill would amend the filing fees currently charged to LLCs pursuant to 805 ILCS 180/50-10.  The bill calls for a reduction in the filing fee of an LLC from the current charge of $500.00 to $39.00, and a reduction in series LLCs from $750.00 to $59.00.    If approved, LLCs may be encouraged to form in Illinois rather than form in another state. The bill remains in the House for consideration.

Clark Et UX v. Rameker, Trustee, et al., U.S. no. 13-299

CLARK ET UX v. RAMEKER, TRUSTEE, ET AL., U.S. no. 13-299

In January 2014, we reported that the U.S. Supreme Court had granted certiorari to the United States Court of Appeals for the Seventh Circuit (the Circuit in which Illinois is located). In, Clark v. Rameker, U.S. no. 13- 99, the U.S. Supreme Court decided to resolve a conflict among the District Courts regarding whether an inherited IRA is subject to receiving protection from creditors – specifically to be addressed in Clark was whether an inherited IRA was to be considered “retirement funds” pursuant to 11 USC §522(b)(3)(C) and thus exempt from consideration as individual assets during bankruptcy proceedings.

The Supreme Court, with Justice Sotomayor delivering the opinion of a unanimous Court, settled the matter on June 12, 2014, when it held that funds contained in an Inherited IRA are not “retirement funds” within the meaning of 11 USC §522(b)(3)(C) and therefore, not exempt from consideration in bankruptcy proceedings. The rationale for the Court’s decision was based on the fact that the purpose of the exemptions, specifically the “retirement funds” exemption in the bankruptcy code, is to balance the creditor’s interest in receiving payment with the debtors need to provide for himself during retirement years. The Court looked to the plain meaning of the term “retirement funds” and determined the definition could be properly understood as “…sums of money set aside for the day when the individual stops working.” The Court applied an objective analysis to determine whether the legal characteristic of the account in which the funds are held is one in which the account is of the type that the funds are set aside for the day when an individual stops working.

In its analysis the Court pointed out the differences between an Inherited IRA, and a traditional and Roth IRA, classified as “retirement funds” within the meaning of §522(b)(3)(C). The first distinction the Court identified was that the holder of an inherited IRA is unable to contribute additional money to that account, whereas there are incentives to regularly contribute to a traditional IRA or a Roth IRA account. In addition, holders of inherited IRAs are required to withdraw all money from the account within five years of the original owner’s death, or take mandatory minimum distributions annually, no matter how close or far they are from retirement. In fact, a beneficiary of an inherited IRA could withdraw the entire amount of the account at anytime without penalty. In comparison, a holder of a traditional or Roth IRA cannot withdraw funds from the account prior to age 59 1/2 without incurring a tax penalty; a rule that was designed to encourage holders of such accounts to leave the funds untouched until retirement. These fundamental differences led the Court to conclude that the legal characteristic of an inherited IRA did not match the characteristics of a retirement fund within the meaning of 11 USC §522(b)(3)(C). The Court noted that to hold otherwise would be to transform the “Fresh Start” bankruptcy provides into “Free Pass” as nothing could prevent the beneficiary of an inherited IRA from withdrawing all the funds and going on vacation after declaring bankruptcy.