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Estate Planning & Probate Law FLASHPOINTS March 2020

March 13, 2020Print This Post Print This Post

Elizabeth A. Garlovsky, Lesser Lutrey Pasquesi & Howe LLP, Lake Forest
847-235-6745 | E-mail Elizabeth A. Garlovsky

Presumption of Revocation Does Apply to Stolen Wills, But Evidence Showing Proof Will Was Stolen Can Rebut Presumption

In In re Estate of Frakes, 2020 IL App (3d) 180649, the decedent executed a will in October 2011. The 2011 will was prepared by the decedent’s longtime attorney who also, according to the opinion, had prepared prior wills for the decedent. The 2011 will was executed at the decedent’s workplace. The decedent’s attorney brought the will, along with an employee from his office, to the workplace so that the attorney and the employee could act as witnesses to the execution of the will. Following the execution, the attorney left the original will with the decedent and prepared, back at the attorney’s office, only a conformed copy. There were no actual photocopies made of the executed 2011 will. Two years later, in 2013, the decedent reported that his home had been robbed. Specifically, according to the police report, the decedent reported that items were stolen from his home safe. One of the stolen items was the 2011 will. The decedent died four years later in 2017. Walter Doyle Frakes, one of the decedent’s sons, petitioned to have the conformed copy of the 2011 will admitted to probate in April 2018. The respondents were three of the decedent’s grandchildren from a predeceased daughter. The respondents filed a motion for summary judgment with the court asking that the petition to admit the copy of the 2011 will to probate be denied based on their assertion that the decedent’s 2011 will be presumed revoked as a “lost or missing will” under Illinois common law. The petitioner filed a cross-motion for summary judgment, and the trial court ultimately ruled in favor of the petitioner, including that the presumption of revocation did not apply to stolen wills. On appeal, the court found that the presumption does apply to stolen wills because stolen wills fall in the category of “all missing wills, even those claimed stolen.” 2020 IL App (3d) 180649 at ¶48. The respondents also argued for a finding that the presumption was not overcome because by not taking steps to create a new will following the theft, the decedent had revoked the 2011 will by “acquiescence.” The court rejected this argument and went on to explain that to accept this argument would reward the thief and punish the victim of the crime. The court found that while the presumption of revocation applied to the stolen 2011 will, the petitioner provided sufficient evidence to rebut the presumption and the decedent’s 2011 will was not revoked.

Surviving Spouse’s State Law (Retroactive) Disclaimer of Limited Power of Appointment Three Years after Death of Husband Is Deemed Valid, Allowing Trust To Qualify as Illinois QTIP Trust

In In re Estate of Dunston, 2020 IL App (5th) 190017, the decedent, James R. Dunston, died in May 2014, survived by his spouse, Judith Dunston, and his two children. Mrs. Dunston and both of the children were named as cotrustees of the James R. Dunston Trust, which was originally established in 2007. Upon the decedent’s death, the trust was divided into a typical marital trust and family trust and appeared to have been created to minimize and defer payment of both federal and Illinois estate taxes to the extent possible under current law at the time. The decedent’s spouse filed an Illinois estate tax return that included an Illinois qualified terminable interest property (QTIP) election over part of the family trust to account for the difference between the Illinois and federal estate tax exemptions in effect at the time. After the return was filed, the Illinois estate tax return became the subject of an audit. As a result of the audit, the Illinois QTIP election was denied and the unpaid Illinois estate tax was assessed against the decedent’s estate. The Attorney General filed a complaint alleging that the reason the tax was being imposed on the estate was because the Illinois QTIP election made by the decedent’s spouse over a portion of the family trust was invalid because the decedent’s spouse possessed a limited power of appointment that violated the QTIP rules. In response to this claim, the decedent’s spouse signed a disclaimer of the power of appointment over the family trust; the disclaimer was retroactive to the decedent’s date of death. Following the execution of the disclaimer, the cotrustees of the family trust filed a motion to dismiss the Attorney General’s complaint for assessment of unpaid Illinois estate tax, claiming that the disclaimer served to fix the QTIP issue as of the decedent’s death. The Attorney General argued that the disclaimer was invalid because it was not executed within nine months of death — a timing requirement for federal purposes under the Internal Revenue Code. See 26 U.S.C. §2158(b)(2). However, the same requirement does not exist for disclaimers under the Illinois Probate Act, 755 ILCS 5/1-1, et seq. See 755 ILCS 5/2-7. The decedent’s spouse’s disclaimer was held to be valid and, therefore, successfully eliminated the power of appointment to “fix” the family trust, and thereby making it eligible for the Illinois QTIP election. No Illinois estate tax was found to be due as a result of the decedent’s death; his original intent to defer any such tax until the death of his spouse was preserved.

For more information about estate planning and probate, see ASSET PROTECTION PLANNING — 2018 EDITION. Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

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