Illinois Estate Planning & Elder Law Blog

Authority to appoint the property of an original trust to a second trust is commonly referred to as decanting authority. The Federal Taxpayer Certainty and Relief Act of 2009 would provide this authority to a trustee and allow him to adapt the terms of a trust on account of unforeseen circumstances or drafting errors.

Statutory decanting authority allows for modification of undesirable terms of an irrevocable trust when doing so would be in the best interests of the beneficiaries. Some examples of these modifications including changing the situs of a trust to a state with more favorable law; relocating trust assets to a state with no income tax imposed; combining multiple trusts to reduce administrative costs and dividing trusts to resolve conflicts among beneficiaries; correcting errors in drafting; and conforming the distribution provisions of a trust to the requirements of a special needs trust.

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Under current law, any estate tax exemption amount that a spouse does not use by the time of his death cannot be used by a surviving spouse and expires upon the first spouse’s death.

Portability, as proposed in the Taxpayer Certainty and Relief Act of 2009, would allow the surviving spouse to be credited with the deceased spouse’s unused exclusion amount.

The Act includes safeguards including provisions which limit the unused exclusion amounts which a surviving spouse of multiple deceased spouses can use. The entire exclusion available to the surviving spouse would be the applicable exclusion amount otherwise available to a decedent.

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The Illinois Living Will Act has been in effect since 1984. It is based on the common law doctrine of informed consent. This right gives individuals the authority to refuse medical treatment. It also gives individuals the ability to record directions about future medical care should they become terminally ill and unable to communicate their choices. A Living Will can authorize the withdrawal or withholding of medical procedures which delay death for terminally ill patients.

A Living Will is often executed by an individual at the same time he executes a Power of Attorney for Health Care. A Living Will can provide a clear indication of the individual’s wishes to family members who are reluctant to withhold or withdraw medical procedures. In the case where the provisions of a Living Will conflict with a Power of Attorney for Health Care, the Power of Attorney supersedes the Living Will.

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