NEW RIGHTS TO DIGITAL ASSETS AFTER DEATH
Now that we live in a “digital age”, electronics are a major part of our lives, even after one dies. A substantial issue is how to handle a person’s electronic accounts after death. In addition to common social media accounts, many people do much of their banking and investment activities online. There are strict laws on both the state and federal level which restrict unauthorized persons from accessing a person’s electronic accounts.
Effective August 12, 2016, the Illinois legislature passed the Revised Uniform Fiduciary Access to Digital Assets Act (2015). The law grants certain rights to an executor or administrator of an estate, a trustee of a trust, or a guardian or agent of a person (a “fiduciary”) to access another person’s electronic accounts in specific situations. It also provides that a person in such a role can produce certain documentation to request a provider of electronic services to terminate an electronic account. Using the procedures set out in the new law, a personal representative can pursue enforcement of the new law in a court action.
The law is intended to better define the circumstances under which, for example, the executor of an estate may access and terminate the digital accounts of an individual after their death. The terms of the Act are detailed and should be complied with in their entirety. There are federal and state laws which provide significant penalties for the unauthorized access to electronic accounts.
The Act provides that the rights of the fiduciary are subject to the terms of service of each account provider. At this time, the extent to which existing federal laws will interfere with the application of the Illinois Act in particular situations is unknown.
You should give consideration to your digital assets when reviewing your estate plan with your attorney. Provisions for the disposition of digital assets and rights to access digital accounts should be included in your estate planning documents.
WELCOME BENJAMIN SERVATIUS!
Bridget Trainor Servatius and her husband, Pete, welcomed their son, Benjamin Servatius, into this world on May 5, 2016! Bridget and Pete have been enjoying the newest addition to their family and look forward to creating new memories with Ben.
IL SUPREME COURT RESTATES THAT PROPERTY RIGHTS OF UNMARRIED PARTNERS ARE NOT TO BE ENFORCED
Unmarried live-in relationships between romantic partners are increasingly common in our society. Many people may be unaware that there is a state statute which prohibits common law marriage in Illinois. The Illinois Supreme Court ruled in a 1979 case that this statute precludes unmarried cohabitants from bringing claims against one another to enforce mutual property rights, where these rights are rooted in a marriage-like relationship between the parties.
In an Illinois Supreme Court case entered in August of 2016, the Court ruled that an unmarried cohabitant could not request the Court to, in effect, equalize the assets of the parties by granting her a share of her partner’s assets once the relationship had ended. The Court rejected a number of legal claims asserted in the case, finding that those claims were based on the parties’ marriage-like relationship. The Court appeared to leave the door open for property claims that had an independent economic basis apart from the parties’ marriage-like relationship. However, the Court appeared to broadly construe claims between persons in an unmarried live-in relationship as unenforceable. The Court did not give concrete guidance as to what types of property claims between unmarried persons that might be granted.
The Court acknowledged that the Illinois legislature had granted rights relating to unmarried persons in a number of different situations, such as child support, and that many other states support property rights between unmarried persons. The Court also recognized that the legislature had recently approved same-sex marriage. However, the Court stated that the legislature had not repealed the statutory prohibition on common law marriage. Since current law prohibits common law marriage, the Court indicated that it would not enforce property claims between unmarried persons based on their marriage-like relationship.
This recent decision reaffirms the point that unmarried persons in live-in relationships cannot expect that Illinois courts will hear their claims for division of property upon separation the same as if they were married. It is anticipated that many persons in this situation will try to claim that they have property rights separate from their marriage-like relationship. However, it is not at all certain that such claims will in all or many cases be successful based on the broad statements made by the Court. This situation can lead to hardship for the party with the lesser assets who may contribute to the long term relationship with an expectation of sharing the assets in the event the relationship ends. It is recommended that persons interested in maintaining property rights in an unmarried relationship seek legal counsel, and it is better if they do so before they enter into a live-in relationship.
A TRIP TO THE RECORDER CAN AVOID LOSING AN INTEREST IN REAL ESTATE
A new statute and a recent court case dealing with different areas of the law illustrate the importance of properly transferring interests in real property including transfers for the purpose of estate planning. A person should sign, deliver and record a proper deed with the local county office of the Recorder of Deeds in order to effectively transfer an interest in real estate.
The Illinois legislature passed Public Act 99-0743, effective January 1, 2017, which requires that a written and properly signed deed be accepted by the trustee in order to transfer real estate to a trust. Additionally, if the transferor is the trustee of the trust, the deed must be recorded in the county in which the property is located. This principle is commonly used with a living revocable trust, which is an instrument that is intended to avoid a formal court ordered probate proceeding by transferring all of the individual’s property into a trust. Usually the individual is the primary trustee during his/her life with full rights to control the trust. The first step of the procedure is that the trust is created and signed. The next step is to fund the trust. Funding of the trust is completed when the individual’s assets are transferred into the name of the trust. For real estate, the property is transferred to the trust by properly signing a deed in favor of the trust, having the trustee accept it, and filing it with the offices of the local county Recorder of Deeds.
This new law was enacted in response to a recent decision of an Illinois Appellate Court which found that just listing the property in a trust alone could transfer the interest into the trust. The court decision was based on a complex fact situation and the ruling was later overruled by the same court. Apparently, in light of the confusion created by these decisions, the legislature passed the rule requiring a proper deed be accepted by the trustee and formally recorded. Some commentators had raised concerns of the possible situation in which property is transferred to a third party after the trust is signed as a result of the transfer to the trust not being part of the public record. The new law establishes a standard for determining whether the trust controls a parcel of real estate.
While this law only deals with real property being transferred to a trust, the same considerations relate to personal property, such as a bank account or investment account. Once a trust is completed, it is important to properly retitle such bank account or investment account into the name of the trust. If the accounts comprise retirement accounts, life insurance, or annuities which have beneficiary designations, then consideration should be made whether to name the trust as a primary or secondary beneficiary, depending upon the circumstances.
Another Illinois Appellate Court decision rendered on September 7, 2016, involved a situation in which a child was named as purchaser in a contract for purchase of real estate. However, her name was not listed as the recipient of the property (the “grantee”) on the deed once it was recorded. The court found that it is necessary to include the name of the person to receive an interest in the real estate in a deed recorded in the office of the local county Recorder of Deeds. The fact that a parent had merely listed the child as a purchaser in a contract for sale of the property did not make a gift of the real estate to her effective and did not entitle her to an interest in the property.
When engaging in estate planning, it is important that the proper steps be completed so that your wishes are carried out. Not only were some of the family members disappointed in the outcome of these cases, but they also were subject to a trial court case which was appealed. Proper estate planning principles can not only make sure that your property goes to those you intend after your death, but can circumvent the potential for family disputes and costly litigation. See your attorney for any questions you may have or for assistance with your estate plan.
GUN OWNERSHIP PROHIBITED FOR PERSONS WITH RESTRAINING ORDERS
Effective January 1, 2017, new Illinois legislation will restrict gun ownership for residents who have restraining orders filed against them. The Illinois Department of State Police are now authorized to deny new gun permit applications or revoke previously issued permits if the Department of State Police finds that the new applicant or current gun owner is or was at the time of issuance subject to an existing restraining order.
The law also includes a provision to disqualify gun ownership if the restraining order was filed in another state. The county sheriff may issue a revocation order due to a restraining order, and gun owners may be required to surrender their firearms if they receive the revocation order. The law specifies the procedures to turn over the firearms and the Firearm Owner’s Identification (FOID) Card to the local law enforcement agency.
Restraining orders, also known as orders of protection, are filed by the individual fearing for the safety of himself or herself, and then upheld or denied, and possibly extended, by court order. There are three types of orders of protection, Emergency orders (can last 14-21 days), Interim orders (lasts up to 30 days), and a Plenary order (may last up to 2 years), which can provide for either short-term or long-term protection. It is important to note that the restriction on gun ownership is only for the duration of the order of protection. Proper legal procedures must be followed after the order expires to regain gun ownership rights.
Current and prospective FOID cardholders should be aware of the specific laws that allow and restrict gun ownership in the State of Illinois, and speaking with an attorney can assist in clarifying these regulations.
HUNTING LAW UPDATES AFFECT BOBCATS, GAME BIRDS, & YOUTH
It is that time of year again, where camouflage and orange-clad hunters occupy the area in the cold of the early morning hours. Hunters will need to pay attention to some of the recent changes to the Illinois Wildlife Code.
It is now legal to hunt or trap bobcats in designated areas in the State of Illinois, with the season limit set at one bobcat per permit. A person must first obtain the required “Bobcat Hunting and Trapping” permit and pay the respective fee. The number of Bobcat Hunting and Trapping permits issued will be determined by the Department of Natural Resources.
Effective January 1, 2017, bobwhite quails, chukar partridges, and gray partridges will be included with pheasants as game birds which may be hunted on public hunting grounds. The Department of Natural Resources will determine the specific dates for the season and authorize the daily fee for accessing the Public Hunting Grounds for Game Birds.
1. Youth hunters are now required to maintain a Youth Hunting License until they reach the age of 19, at which time they are eligible to apply for a full hunting license. Previously, minors were able to apply for the full hunting license at the age of 17. The full hunting license allows an individual to hunt alone after the completion of the required hunting safety course. The Youth Hunting License requires the individual to hunt with a parent, grandparent, or guardian who is at least 21 years old and holds a valid Illinois hunting license.
2. Individuals that hold a Youth Hunting License were granted the ability to hunt with a crossbow during the first half of the regular deer archery season, as long as they remain under the direct supervision of an adult age 21 or older who possesses a valid deer archery permit.
3. Beginning in 2017, the Department of Natural Resources is authorized to establish a youth-only spring wild turkey season which will include two consecutive weekends.
While there are more technicalities that apply with the revised laws, being aware of hunting and trapping rules and regulations can save a person from any violations of the law and the respective fines and/or citations. Consult with your attorney if you need assistance interpreting the Illinois Wildlife Code to ensure you are in accordance with the law.
PROVISIONS OF LIVING TRUST MUST BE FOLLOWED EVEN AFTER SECOND MARRIAGE
On August 15, 2016, the Illinois Appellate court ruled that the assets of a first wife’s trust could not be used to make a gift to a second wife after the death of the first wife. The court recited facts where a woman signed a living revocable trust in favor of her husband during his life. Income was to be paid to the husband and principal was to be used at the discretion of the husband, as trustee, as necessary or advisable for his health, support and education. Upon the death of the husband, the assets were to be divided among the children of the first marriage. The wife died and the husband remarried a couple of years later. The children brought suit after the husband made a gift from the principal of the first wife’s trust to build a house out-of-state for the second wife. The court referred to this as an “extraordinary gift.” The court found that the gift to the second wife was in violation of the trust standards by which the first husband could use the principal of the trust for his “health, support and education.”
One who is named as a trustee of a trust has a special duty or a “fiduciary duty” to administer the assets of the trust under the terms of the trust. Even though the trust of a spouse may have been funded with assets of the marriage, the surviving spouse cannot use the assets of the trust for just any purpose, but has a duty to use the assets of the trust according to its terms. In this case, the apparent concern was for the needs of the husband during his life first and foremost, and then after his death, the needs of the children of first marriage. This is often times the intent of a husband and wife who engage in estate planning. It is important that a trustee administer a trust after death according to its terms to fulfill the wishes of the deceased. A trustee should work with an attorney with experience in estate planning to comply with the terms of a trust and avoid unintended legal consequences.
Katherine Baker has been with the firm as a paralegal since March of 2014. After graduating from Orangeville High School, she received her Associate of Arts from Highland Community College in 2008. In 2011, she graduated from the University of Illinois at Chicago, double majoring in History and Political Science with a minor in Criminal Justice. She received her Paralegal Certificate with honors from Roosevelt University in downtown Chicago in 2013, where she studied paralegal courses such as Intellectual Property, Commercial Law, Civil Law, Ethics and Professionalism, Pre-Trial and Post-Trial Litigation, and Legal Research and Writing.
She is a member of the paralegal national honor society, Lambda Epsilon Chi, the Illinois Paralegal Association, and the National Federation of Paralegal Associations. Katherine received the Illinois Accredited Paralegal (ILAP) distinction in July of 2015, which requires the completion of twelve hours of Continuing Legal Education every two years. She attends the bi-annual Education Conferences held in Chicago and hosted by the Illinois Paralegal Association to comply with these requirements. She has previously attended seminars that cover the following topics: Legal Research and Writing, Issuing Citations to Discover Assets, Discovery for the Indispensible Paralegal, Federal and State Citations, Powers of Attorney, Digital Forensics, and Legal Ethics.
Katherine is currently studying to take the Paralegal CORE Competency Exam (PCCE) in order to receive the accreditation of a CORE Registered Paralegal (CRP). Katherine assists with a variety of tasks at the firm, including drafting legal documents and correspondence, generating financial spreadsheets, and organizing files and records.
NEW BIKING LAW PROVIDES FOR RIGHT-OF-WAY TO BICYCLISTS
As bicycles become a more popular transportation alternative, motorists need to be aware of their presence on the road and all traffic laws involving bicycles. Commencing in 2017, all rights are extended to every bicyclist on highways, “including, but not limited to” the specific rights relating to the right-of-way. The new law now specifies that motor vehicles and bicycles will be treated the same under Illinois’ rules of the road.
The law was prompted after the 2015 death of a bicyclist at an intersection where those traveling north and southbound have stop signs, but east and westbound drivers do not. The driver of the vehicle was cited for failure to yield to the bicyclist. The circuit court judge ruled that there were conflicting decisions in cases involving bicyclists holding the same rights as vehicles under Illinois law. After the judge dismissed the traffic ticket issued to the motorist who struck the bicyclist, the family of the bicyclist assisted in creating and lobbying for the new law. Although the new law does not necessarily alter the original law, it does clarify it for future litigation that may arise.
Whether you chose to travel with two wheels, or four (or more), it is important to understand the rules of the road and pay attention to the new traffic laws that are passed while traveling in the State of Illinois.
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LAW NOTES is a publication of Elliott & Trainor, P.C., which is distributed free of charge to our clients and local business friends to provide news about developments in the law which may be of use. Nothing contained in this publication shall be construed as creating an attorney-client relationship with Elliott & Trainor, P.C., nor shall the content of this publication be considered as legal advice.