Happy New Year! Now that 2020 is upon us, we write with an update about changes in Illinois and federal law
and to share some news about Wochner Law Firm happenings.
Illinois Trust Code
The Illinois Trust Code (“Code”) became effective on January 1, 2020. This new law brings with it several significant changes from previous Illinois law. One of the most important changes applies to all trusts that become irrevocable on or after the effective date of the law. The change expands the class of beneficiaries to whom a trustee must provide trust accountings, and now includes presumptive remainder beneficiaries, as well as the current income beneficiaries. It also creates a trustee’s duty to provide notice to all such beneficiaries under certain circumstances.
How does this change impact you?
As you know, a living trust is a revocable trust provided that the owner (grantor) is living and is competent to make changes. A living trust becomes irrevocable upon the death of the owner, or when the owner is no longer competent to make changes. So, all living trusts will become irrevocable at some point in time. When that happens, the new Illinois law will apply, and it will result in the trustee having to provide accountings and notice to this expanded class of beneficiaries. If your preference is to limit the trustee’s
duty to so account and inform, the law allows the trust grantor (you) to draft the trust so as to avoid these requirements in all but one circumstance. And, while you cannot eliminate the trustee’s duty to provide an accounting to all current income beneficiaries, you may, in some circumstances, provide that the accounting be delivered to a beneficiary’s representative of your choosing.
We encourage you to schedule a review to learn more about how this new law may impact your personal estate planning objectives.
Setting Every Community Up for Retirement Enhancement Act of 2019 or SECURE Act
Effective January 1, 2020, the SECURE Act is a new federal law which encompasses wide-ranging changes to the retirement savings playfield. The law now permits individuals with IRAs or other retirement plan account
balances to delay taking mandatory distributions until age 72. The old law required distributions to begin at age 70 1/2. Under the Act, individuals earning income at any age may contribute to traditional IRAs, and individuals whose spouses have earned income can also take advantage of spousal IRA contributions. Under the old law, contributions had to stop at age 70 1/2. Another significant change is to the “stretch” provisions that now apply to inherited IRA’s and other qualified plans. Before January 1, 2020, an individual who inherited an IRA or certain other qualified plan could “stretch” that account’s required minimum distributions over his or her own remaining lifetime. Now, with limited exceptions (notably, the surviving spouse) the law requires that such accounts be
fully distributed within a ten-year period of time.
For those of you who have purposely named much younger beneficiaries on your IRA’s or other qualified plans, the change in the stretch provisions could have significant impact.
Again, we would be happy to review your file in light of the new law.
Exciting Office News
We are excited to report that our office is being updated, with construction slated to begin late March 2020 and conclude the first week of April. The office will remain “open” in temporary space across the hall and, of course,
you will be able to contact all of us by telephone and email. In our efforts to digitize our client data base, please make sure that we have your current email address.
You can call or email Dylan, Mimi, Corinne or John with your email and other contact information updates.
Finally, look for an invitation from the firm for all college-bound students who are 18 years of age or older to sign a health care power of attorney. One of our attorneys will review the document with your student and explain its importance. The opportunity is tentatively scheduled for July 2020.
As always, we invite you to schedule a free file review at the office. Best wishes for a healthy and prosperous year.
Thank you for allowing us to serve you.
The Wochner Law Firm LLC