2024 Year-End Estate Planning: Illinois Updates

The following is a summary of some of the key legislative and judicial updates from Illinois in 2024.

Control and Protection of Trust Property

On August 9, 2024, Senate Bill 3343 (SB 3343) was signed into law, which amends Sections 809 and 810 of the Illinois Trust Code.

Section 809 of the Illinois Trust Code, titled "Control and Protection of Trust Property," currently requires that a trustee take reasonable steps to take control of and protect trust property. SB 3343 amends Section 809 of the Illinois Trust Code to specify that the trustee's duty includes "searching for and claiming any unclaimed or presumptively abandoned property."

SB 3343 further amends Section 810 of the Illinois Trust Code, titled "Recordkeeping and Identification of Trust Property," to create additional duties for trustees terminating a trust. SB 3343 adds Section 810(e) of the Illinois Trust Code which will mandate that "[a] trustee shall maintain or cause to be maintained trust records for a minimum of seven years after the dissolution of the trust," and Section 810(f) of the Illinois Trust Code which will require that "[p]rior to the destruction of trust records, a trustee shall conduct a reasonable search for any trust property that is presumptively abandoned or that has been reported and remitted to a state unclaimed property administrator."

A similar amendment was initially proposed in January 2024 in HB 4320 but faced broad opposition and failed to proceed through the legislative process. Sections 809 and 810 of the Illinois Trust Code are now, however, amended through SB 3343. Other than these updates to the Illinois Trust Code, SB 3343 primarily amends the Revised Uniform Unclaimed Property Act. Early criticisms of SB 3343 include that the terms "trust records" and "reasonable search" are not defined, creating uncertainty. This amendment will have implications for, among others, corporate and individual trustees, including their legal, tax and other advisers. This amendment will take effect on January 1, 2025.

Illinois Power of Attorney Act

An amendment (Senate Bill 3421) to the Illinois Power of Attorney Act was signed by Illinois Governor J. B. Pritzker on August 9, 2024, and will take effect on January 1, 2025. This amendment states that it is unlawful for a third party to unreasonably refuse to accept an individual's Illinois statutory short form power of attorney for property which was executed in accordance with the laws in effect at the time of such power of attorney's execution. The amendment provides clarification for what "unreasonable" means by providing examples of when it is unreasonable for a third party to reject a properly executed Illinois statutory short-form power of attorney for property. The amendment also lists examples of reasonable causes to refuse to honor such power of attorney.

Notably, it is unreasonable to refuse an Illinois statutory short form power of attorney for property because such power of attorney is not on a form the third party receiving such power prescribes or because of a lapse of time since the execution of the power of attorney. The amendment also lists 14 reasonable causes to refuse to honor an Illinois statutory short form power of attorney for property. Reasonable causes include actual knowledge or a reasonable basis for believing the agent is engaged in fraud or abuse of the principal as well as the refusal of the principal's attorney to provide a certificate that the power of attorney is valid.

Illinois Notary Public Act

Senate Bill 3513 (SB 3513) has been signed into law and amends the Illinois Notary Public Act to streamline the renewal process for notary publics who are attorneys, judges or their employees. This amendment states that licensed attorneys, judges or employees of attorneys or the court, may renew their appointments as notaries public (or electronic notaries public) without completing the course of study or passing the examination required for initial applicants. To take advantage of this streamlined renewal process, said individuals must instead submit a signed statement certifying that said person is a licensed attorney, judge, or employee of a licensed attorney or the court and that said individual has read and understands the Illinois Notary Public Act. This amendment seeks to ease burdens on legal professionals renewing their notary licenses. This amendment will take effect on January 1, 2025.

Electronic Wills, Electronic Estate Planning Documents, and Remote Witnesses Act

House Bill 2269 (HB 2269) went into effect on January 1, 2024. HB 2269 amends the Electronic Wills, Electronic Estate Planning Documents and Remote Witnesses Act, which governs electronic signature and electronic notarization procedures for "nontestamentary estate planning documents." Nontestamentary estate planning documents are broadly defined in the statute as records "relating to estate planning that [are] readable as text at the time of signing and [are] not a will or contained in a will." The statute provides a non-exhaustive list of examples of nontestamentary estate planning documents, including, but not limited to documents that create, exercise, modify, release or revoke (i) a trust, (ii) a trust power, (iii) a certification of trust, (iv) a power of attorney, (v) a power of appointment, (vi) an advanced directive, or (vii) a nomination of a guardian for the signing individual. HB 2269 explicitly overrides existing Illinois law to the contrary by providing that, even if other Illinois law "requires a nontestamentary estate planning document to be in writing, an electronic record of the document satisfies the requirement." However, practitioners may draft nontestamentary estate planning documents to preclude the use of electronic signatures or notarization on a document. These restrictions are valid and will void the electronic signature or notarization of such documents. It is important to be cognizant of and review for such restrictions before electronically signing a document.

Under HB 2269, an electronic signature is attributable to a person if "it was the act of the person." This is a fact-intensive inquiry and may be shown "in any manner, including by showing the efficacy of a security procedure." A security procedure is defined as a procedure that can verify that the electronic signature is that of a specific person, including using an identifying word, number or code.

Existing notary requirements remain in effect, but nontestamentary estate planning documents can be notarized remotely. If notarization is required, the notary must "associate the individual's electronic signature on the document together with all other information required to be included under other law." Witnesses may also remotely witness an individual's signature under this law. The requirement for witnesses is "electronic presence," which means that two or more people (i.e., the witness(es) and the individual signing the document) are able to communicate (i) in real-time and (ii) to the same extent as if they were in the same physical location. A live videoconference may satisfy these requirements.

The language of HB 2269 was adopted from the Uniform Electronic Estate Planning Documents Act (the UEEPDA) which was recommended to the states by the Uniform Law Commission. Illinois is the first state to enact a version of the UEEPDA. The UEEPDA is ultimately intended to increase flexibility for the execution of nontestamentary estate planning documents and broaden the scope of prior legislation which allowed for remote signatures of wills.

In re Estate of Stinnette, 2024 IL App (2d) 230174 (May 3, 2024)

In Stinnette, the mother of the decedent, Zharvellis Holmes (Decedent's Mother), filed a petition for appointment as administrator of the decedent's estate. In such petition, Decedent's Mother filed an affidavit of heirship referring to a minor child, Marcellis Jr. (Potential Son), as the decedent's "potential son." Potential Son's mother, Tafara Williams (Potential Son's Mother), filed a counterpetition for appointment as administrator of the decedent's estate. The trial court granted Decedent's Mother's petition and denied Potential Son's Mother's counterpetition without conducting an evidentiary hearing regarding whether Potential Son was the decedent's biological son. Potential Son's Mother appealed the trial court's ruling, claiming that (i) Decedent's Mother lacked standing for the appointment as administrator since Decedent's Mother did not have an interest in the decedent's estate (arguing the testator died intestate leaving Potential Son as the decedent's sole heir), and (ii) the trial court failed to conduct an evidentiary hearing before appointing Decedent's Mother as the administrator.

The appellate court first addressed the issue of whether, in an intestate matter, an individual must be interested in a decedent's estate to qualify as an administrator. The appellate court quickly dismissed this argument. The appellate court stated the administration of a decedent's estate is a creature of statute and that nothing in Illinois law, including the Probate Act of 1975 (the Illinois Probate Act), requires that an individual be interested in the decedent's estate to assume the duty of administrator. Section 9-1 of the Illinois Probate Act instead requires that such person has (i) attained the age of 18, (ii) is a resident of the United States, (iii) is not of unsound mind, (iv) is not an adjudged person with a disability (as defined in the Illinois Probate Act), and (v) has not been convicted of a felony.

The appellate court next visited Potential Son's Mother's argument that the trial court failed to conduct an evidentiary hearing. Critical to the analysis of who should be appointed as administrator of an intestate estate is the order of preference listed in Section 9-3 of the Illinois Probate Act. Orders of preference rank the priority of individuals seeking to become the administrator of an individual's estate. Such order of preference in the Illinois Probate Act lists the children of a decedent prior to the parents of a decedent. Despite Decedent's Mother qualifying as a potential administrator under the Illinois Probate Act, Potential Son takes preference if it is proved that he is the decedent's biological son. The trial court granted Decedent's Mother's petition without conducting an evidentiary hearing as to whether Potential Son was the decedent's biological son, and thus, whether Potential Son had preference over Decedent's Mother under Section 9-3 of the Illinois Probate Act.

The appellate court vacated the trial court's judgment and remanded for further proceedings. The appellate court held that the trial court erred by granting Decedent's Mother's petition before ruling on Potential Son's Mother's petition that Potential Son's Mother be appointed guardian of the decedent's estate and by failing to conduct an evidentiary hearing as to whether Potential Son was the decedent's biological son.

In re Estate of McDonald, 2024 IL App (2d) 230195 (Apr. 15, 2024)

In McDonald, the appellate court clarified whether putative-spouse claims are barred by the limitations provisions of Section 18-12(b) of the Illinois Probate Act. The appellate court also analyzed the "good faith belief" requirement of the putative-spouse doctrine, which had not previously been examined in great detail by an Illinois court.

McDonald involves a decedent, John W. McDonald III (Decedent), who was disabled and in need of guardianship. In May 2017, Decedent's brother, Shawn McDonald (Decedent's Brother), was appointed as Decedent's plenary guardian of Decedent's person and estate. Decedent unsuccessfully moved to vacate the guardianship order. Decedent and his alleged putative spouse, Ellizzette McDonald (Putative Spouse) participated in a marriage ceremony approximately six weeks after Decedent's Brother was appointed plenary guardian. Deposition transcripts revealed that Putative Spouse knew, prior to the marriage ceremony, that Decedent was declared a ward of the court and that Decedent's Brother had been appointed as Decedent's plenary guardian. Decedent died intestate, and Decedent's Brother successfully filed a petition for letters of administration and an affidavit of heirship (in such pleadings, claiming that Decedent's marriage with Putative Spouse was void because Decedent, as a ward of the court, lacked the capacity to consent to the marriage). Putative Spouse moved to vacate the court's order appointing Decedent's Brother as administrator and asserted she was Decedent's surviving spouse and sole heir.

The appellate court first addressed whether putative-spouse claims are barred by the limitations provisions of Section 18-12(b) of the Illinois Probate Act. Section 18-12(b) of the Illinois Probate Act provides that "… all claims which could have been barred under this Section are … barred two years after decedent's death, whether or not letters of office are issued upon the estate of the decedent…." Putative Spouse argued that the word "claims" denotes claims against a decedent's estate which reduce the assets of the decedent's estate. Decedent's Brother countered that Section 18-12(b) of the Illinois Probate Act requires all claims against a decedent's estate be made within two years of the decedent's death. The appellate court decided with Decedent's Brother. The Illinois Probate Act broadly defines a "claim" as "any cause of action." As such, the two-year limitations provision applies to any claim regardless of its legal basis. The appellate court noted that the policy of strictly applying this limitations period facilitates the timely settlement of estates.

The appellate court next addressed Putative Spouse's "good faith belief" argument under the putative-spouse doctrine. "[T]he rights of a putative spouse are conferred upon anyone who has gone through a marriage ceremony and cohabitated with another in the good-faith belief that he or she was married to the other individual." The appellate court does not explicitly adopt the standard of "good faith belief" set forth in Williams v. Williams, 97 P.3d 1124 (Nev. 2004) (a Nevada Supreme Court case) but does apply such standard. The standard in Williams is that when an alleged putative spouse receives "reliable information that an impendent [to a valid marriage] exists, the individual cannot ignore the information, but instead has a duty to investigate further. Persons cannot act 'blindly or without reasonable precaution.'" The appellate court held that even if Putative Spouse's claims were not barred under Section 18-12(b) of the Illinois Probate Act, her claims would fail under Williams. The appellate court took note that prior to the marriage ceremony, Putative Spouse was aware Decedent was a ward of the court and that Decedent's Brother had been appointed plenary guardian. Further, following the marriage ceremony, Putative Spouse was aware that an independent counsel had been appointed to represent Decedent and that said independent counsel had cautioned Decedent and Putative Spouse that potential impediments to marriage existed. The appellate court thus affirmed the lower court's ruling that Putative Spouse failed to present a prima facie case establishing the validity of her marriage to Decedent.