Serving North Central Illinois,

La Salle, Bureau, Putnam, Marshall,

              Grundy and Livingston Counties

REPUTATION

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James T. Reilly

Jennifer Bunker Skerston

gavel, books, and scales of justice

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By Reilly Law Office, Nov 2 2018 09:41PM

Three ‘horror stories’ to convince you how important this is

Regardless of your income or net worth, there’s one estate planning move you should probably make right now: check the beneficiary designations.

With today’s relatively generous $11.18 million federal estate tax exemption, estate planning is only a concern for the rich. Right? Wrong! In fact, regardless of your income or net worth, there’s one estate planning move you should probably make right now: check the beneficiary designations for your life insurance policies, bank accounts, brokerage firm accounts, retirement accounts, and so forth. If you’ve not yet turned in the proper forms to designate beneficiaries, do it now. If your forms are out of date, refresh them.

The consequences of failing to take these simple steps can be dire. If you don’t believe it, consider the following trifecta of real-life horror stories.

Horror story No. 1

A 2012 Fifth Circuit Court of Appeals decision reversed an early District Court decision by finding that a pension plan administrator didn’t abuse her discretion in determining that a deceased plan participant’s stepsons weren’t considered his “children” under the terms of the plan. Therefore, the deceased participant’s siblings, rather than the stepsons, were entitled to inherit the plan benefits. Source: Herring v. Campbell, 5th Circuit 2012.

Factually, John Wayne Hunter died in October of 2005. He had retired from Marathon Oil Company, where he was a participant in the company pension plan. The plan allowed Hunter to designate a primary and secondary beneficiary. Hunter designated his wife as the primary beneficiary but failed to designate any secondary (contingent) beneficiary. After his wife died, he failed to designate a new primary beneficiary. Under the plan’s terms, when a participant died without designating a valid beneficiary, the deceased participant’s benefits were distributed in the following order of priority: (1) surviving spouse, (2) surviving children, (3) surviving parents, (4) surviving brothers and sisters (siblings), and finally (5) participant’s estate.

After Hunter died, the plan administrator considered, and rejected, the possibility that Hunter’s two stepsons might qualify as “children” who would therefore be entitled to all of Hunter’s benefits. Instead, the plan administrator distributed the benefits, which totaled more than $300,000, to Hunter’s six siblings.

The stepsons sued, claiming they should have inherited the benefits. Evidence presented in the resulting Texas District Court proceeding showed they had a close relationship with Hunter. His estate had been left to them, and Hunter referred to them as his “beloved sons” in his will. The stepsons claimed they were in fact Hunter’s children because, by his actions, he had “equitably adopted” them.

The evidence seemed to indicate that Hunter probably did intend to leave his benefits to the stepsons, and the District Court took their side by concluding that the plan administrator had abused her discretion by failing to consider the stepsons’ equitable adoption claim. However, the plan administrator wasn’t ready to give up the fight. She appealed to the Fifth Circuit.

The Fifth Circuit found no error in the administrator’s interpretation that the term “children” for purposes of the plan meant biological or legally adopted children as opposed to un-adopted stepchildren. As to the stepson’s claim that they had been equitably adopted by Hunter, the Fifth Circuit found that nothing required the plan administrator to incorporate the theory of equitable adoption into the plan’s definition of “children.”

Therefore, the District Court’s decision was reversed, and all of Hunter’s pension benefits went to his six siblings.

Horror story No. 2

How would you feel if you died and your ex, who you intended to get nothing further after your recent divorce, was allowed to collect all your company pension benefits and the proceeds from your company-provided life insurance? Probably not very good if you wanted your son and daughter from an earlier marriage to get the money. Unfortunately, the dad in this case failed to change the beneficiary designations for his pension benefits and life insurance after the divorce, so his ex-wife remained the named beneficiary. Two months later, dad was killed in a car crash. The Supreme Court ruled that the beneficiary designations trumped state law that would have automatically disinherited the ex. So the ex got the money, and the kids got the bills for an expensive and unsuccessful legal fight. Source: Egelhoff v. Egelhoff, Supreme Court 2001.

Horror story No. 3

In yet another real-life case, an ex-wife collected $400,000 from her ex-husband’s company savings and investment plan even though the ex-wife had specifically waived any interest in the plan under the divorce agreement. Believing the divorce agreement was the last word on the subject, the ex-husband failed to turn in the form required to officially change the plan beneficiary from his ex-wife to his daughter. He died seven years after the divorce. The plan document stipulated that beneficiaries could only be changed by submitting the form. The Supreme Court ruled that the hideously out-of-date beneficiary designation trumped the divorce agreement. So the ex-wife got the $400,000 and the daughter got stiffed. Source: Kennedy Estate v. Plan Administrator for the DuPont Saving and Investment Plan, Supreme Court 2008.

The moral

Of course, beloved stepchildren and divorces aren’t the only scenarios where failing to turn in or update beneficiary designation forms can cause big problems for someone’s intended heirs. You face the same basic issue if you’ve become disgusted with one of your offspring because he has decided to become a professional Frisbee golfer. Or you might want to leave more of your life insurance benefits to an adult child who just had triplets and a bit less to your childless heirs. Bottom line: when your circumstances change, your beneficiary designations may need to change too.

Warning: Don’t depend on your will or living trust document to override outdated beneficiary designations. As a general rule, whoever is named on the most-recent beneficiary form will get the money automatically if you die — regardless of what your will or living trust papers might say.

Special advice if you’re married

If you’re married and have accounts set up with you and your spouse named as joint owners with right of survivorship, the surviving spouse will automatically take over sole ownership when the first spouse dies. If that’s what you intend, great. Still, you may want to name some secondary beneficiaries to cover the possibility that your spouse dies before you do. Note that in the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), you will usually need your spouse’s consent to make beneficiary changes because assets accumulated during your marriage are generally considered to be owned 50/50.

Turning in beneficiary forms can also help you avoid probate

Beyond just ensuring that your money goes where you want it to go, another advantage of designating individual beneficiaries is that it can help you avoid probate — because the money goes directly to the named beneficiaries by “operation of law.” In contrast, if you name your estate as your beneficiary and then depend on your will to parcel out assets to your intended heirs, your estate must go through the potentially time-consuming and expensive process of court-supervised probate.

The last word

If you don’t have any minor children, keeping your beneficiary designations up-to-date can sometimes eliminate the need for a will (if you do have kids, you need a will to designate a guardian for them). The key words here are up-to-date. So it’s a really good idea to check your designations at least once a year or whenever significant life changes occur. For example, when grandchildren arrive, you may want to name them as secondary (contingent) beneficiaries if their parents (your adult children) pass away.

In any event, you can usually conduct a beneficiary checkup and make needed changes in just a few minutes. Even better, beneficiary forms can often be accessed and submitted online. But if you wait, it could be too late — as the unlucky folks in the aforementioned horror stories can attest.

Sidebar: Beneficiary to-do list

Life insurance policies, annuities, IRAs and other tax-favored retirement accounts, employer-sponsored benefit plans: Fill out and turn in beneficiary designation forms to establish or change beneficiaries.

Bank and brokerage firm accounts: Fill out and turn in transfer on death (TOD) or payable on death (POD) form to establish or change beneficiaries.

529 college saving accounts: Fill out and turn in beneficiary change form if you want to change the account beneficiary.

Name secondary beneficiaries: Naming a primary beneficiary isn’t enough. Name one or more secondary (contingent) beneficiaries to inherit your money if the primary beneficiary dies before you do. Sadly, this is a common occurrence that must be taken into account.

From: https://www.marketwatch.com/

By Reilly Law Office, Aug 29 2018 03:53PM

Illinois’ police forces may not give out the most speeding tickets but when they do, state laws make them some of the most expensive in the nation.

A new report by financial service company WalletHub found that Illinois comes down the harder on speeders than nearly any other state but it has some of the harshest penalties in the nation. It was tied with three other states for eighth-strictest overall and fourth in terms of speeding enforcement, behind only Virginia, Arizona and New Mexico. It ranked fourth in the nation in terms of WalletHub’s “speeding enforcement” rankings. That’s based on threshold for an automatic reckless driving ticket, average hike in insurance premium after a ticket, and how much a speeding ticket counts toward a suspension.

WalletHub Analyst Jill Gonzalez said one ticket in Illinois gets a speeder much closer to a license suspension than other states.

“It has about 45 percent in terms of how much a speeding ticket counts toward a suspension,” she said. “Usually, a ticket is 15 percent counted toward a suspension.”

Illinois also ranked high on the list because of the long jail sentences and costly fines for reckless driving.

“Illinois has some of the highest days in jail after a first conviction at ten days and 20 for a second and the fines are some of the most expensive in the country as well,” Gonzalez said.

Illinois isn’t a leader in doling out tickets. A February report by Insurify found Iowa as the most tickets issued per capita in 2017.

From: Illinois News Network

By Reilly Law Office, Aug 29 2018 03:34PM

At all levels, our court systems and legal service providers are struggling. Providers have fewer resources to deliver adequate civil and criminal legal services necessary to address the unmet legal needs of our nation’s poor, near-poor, and those of moderate means. Large corporations and others who can afford the cost of litigation often turn away from the courts because of delays, inefficiencies and legal costs. The inadequate funding of our co-equal, third branch of government has contributed to an erosion of public confidence in our courts.

However, the challenges in both the civil and criminal justice arenas are not only due to inadequate funding. Rather, they are greatly exacerbated—if not partly caused—by the hesitancy of many in the legal profession and the business community to acknowledge and seek correction of the shortcomings of the justice system. Whether those deficiencies are rooted in a lack of cultural and language awareness, racism or sexism, bias, power inequities, or even professional self-interest, they have made justice unobtainable for many in our nation. We have failed to recognize the criticality of access to justice for not just some, but for all. This is the very essence of the American rule of law, and it is our duty to ensure that it never falters.

To achieve justice for all in our country, we must work collectively to assure that our court system is strong and that our judiciary remains independent. It must be not only for and when our own interests or those of our clients are at stake. Rather, it must be so each time we see injustice, lack of access, attacks on the judiciary, or services rendered by the justice system that fall short of what Americans are guaranteed by our Constitution. We cannot stand silent and turn a blind eye. There are concrete ways that individual lawyers and judges immediately can contribute to rekindling trust and confidence in our American justice system.

LAWYERS, BUSINESS COMMUNITY, POLITICIANS, MEDIA AND LAYPERSONS: SHOW AND DEMAND RESPECT FOR THE JUDICIARY

Our country’s state and federal judiciaries face vitriolic attacks. We have heard politicians assail judicial integrity and competence and others stand silent when they do. Left- and right-leaning social media outlets selectively push out stories of too-light or too-heavy sentences; verdicts that are too large or too small; and seemingly aberrant results, without context, to undermine public confidence in our legal system. Legitimate criticism of the jurist who fails to honor the rule of law should never be suppressed, yet, too often lay colleagues and some within the legal profession find it far too easy to attack the presiding judge rather than to simply disagree with the merits of a court decision. We must never tear down the integrity of a jurist simply because the outcome of the case was other than that which was sought. The cumulative damage to our justice institutions resulting from judge-bashing, even if only shared in a whisper to a client by a lawyer, cannot be measured by simply totaling these individual acts of criticism. Collectively, those acts blend and combine over time to undermine the public’s confidence in our justice system. Simply put, we lawyers need to lead—and lead by our acts and words—if we expect our clients and the public to have respect for the justice system.

JUDGES AND LAWYERS: WE MUST EACH REMEMBER, IT IS THE PEOPLE’S COURT

Each of us who plays a role in the justice system must go about our daily work with recognition that the hallowed halls of justice belong to the people. We must do all we can to assure that courts are places of fairness and equality; we must give life to the notion that they are “the people’s courts.” In my state of Louisiana, we had a federal district court jurist who had a “welcome” mat at the door of her federal courtroom. Each hearing day, she would come into the courtroom and introduce herself to all present. She was known to have said that she was always striving for a “user-friendly legal system.” Whether you agreed with her ruling or not, you had a sense that the process was fair and that, whether lawyer or litigant, juror or witness, you had been treated with respect and dignity.

Certainly, our judges on the state bench do not have the luxury of time to introduce themselves to the scores of self-represented litigants or overworked appointed counsel who crowd courtrooms every day. Yet, in both the civil and criminal arenas, even in the face of overwhelming dockets, there are inspiring examples of jurists who make a difference by small acts of patience and understanding that lend assurance to both intimidated first-time litigants and habitual users of the system. They do so with empathy as they look at the hardened face of addiction and seemingly incorrigible crime. They explain their rulings so that those who come before them see the court as an institution of civility and accountability. They sense what it feels like when you walk into a courtroom and no one is of your race or gender, and they undertake efforts to assure that staff and jurists reflect their community. They remain steadfast and calm in the face of disrespect when there is simply no one else to save a broken life. And, they recognize the fear that a self-represented litigant may experience as she stands to tell intimate details of a relationship that deteriorated to sexual violence. By demonstrating respect and fairness, they are building trust and confidence in our justice system.

Similarly, lawyers can do their part to help build trust and confidence in our justice system by educating those whom they represent about the rule of law in our society and the court’s role in upholding same. Helping them understand that justice ultimately is defined by fairness of process, integrity in purpose, and ethical means in adherence to the rule of law, and is not always found in victory, can be one of the most important lawyer-client conversations to be had, and it will go far in building trust in the justice system.

LAWYERS AND JUDGES AS COMMUNITY LEADERS

We also know that serving our communities is an important way to instill confidence in our justice system. In Louisiana, we are fortunate. Although our justice system is woefully under-resourced in almost every aspect that matters—from understaffed police departments, prosecutors, and public defenders, to our antiquated and inadequate courthouses and technology systems, to our overworked court personnel—a bright spot is our judiciary, the majority of whom understand that their role as jurists, as leaders in the law, does not start and end with the sound of a gavel. They serve as community leaders throughout their careers on the bench. They step up to serve as presidents of local bar associations, contribute to the state bar and bar associations of color, lead the local chapter of the federal bar, and serve in leadership within the American Bar Association. They serve regularly in soup kitchens. They go out into their communities—whether at synagogue, school, or neighborhood center—to speak and, mostly, listen. They donate their time to causes for access to justice and beyond. They don’t do it for recognition. They do it because they care.

Our judges know, as urged by Jesse Rutledge of the National Center for State Courts in an earlier article in this series, that they need to do their share, each day, to earn the trust and confidence of the public which they serve. Understanding the challenges faced by their fellow community members through listening and outreach before community members seek justice in the courts is an important first step for those judges who want to earn the trust that leads to sustained judicial independence.

INNOVATE TO SERVE

But what more is needed to instill public trust and confidence in our courts? Lawyers, judges, and court administrators must take even greater steps to innovate the way that justice is dispensed. However, to innovate, we need to better understand the public’s expectations regarding access points to justice and how we can address their legal needs. We need to make rendering justice less about how we always have done it and more about how it makes sense to do it now. We need to think collaboratively with those within and outside the legal profession about why our courts are seen by some in the public as a place for judges and lawyers to work and earn a living rather than as a place for the public to have their life problems resolved. We need to innovate through technology and smart justice system improvements. We need to examine everything from court rules to regular court hours; financial forms to fines and fees. We need to determine if our assumptions, biases, practices, procedures, and traditions degrade justice-seekers, or worse yet, deny justice. The bottom line: We need a justice system transformation in which the best building blocks of the system survive and the vestiges that no longer lend value are abandoned. That transformation will instill a renewed sense of trust and confidence.

CONCLUSION

The legal profession of lawyers and judges and all those who have the privilege of delivering legal services to the public cannot leave it to those in future years to restore trust in our justice system. It will be too late. We must do our part, individually and collectively, to make the concept of justice a reality for all. This is our moment to get it right. To get it right for those whom we serve.

From: ABA Journal

By Reilly Law Office, Aug 9 2018 10:16PM

The U.S. Supreme Court has ruled that a person doesn’t hand over their right to privacy just because they use a mobile phone.

In the opinion released last month, the high court ruled that a man convicted of a string of robberies was wrongly tracked by the government that got his mobile phone data from the carrier.

The court essentially said law enforcement must get a warrant to track someone using their phone data.

The initial rules had been put in place in the 1970s, before cell phones became so common. Justice John Roberts said in the opinion that getting this type of data from a person’s cell phone provider “provides an intimate window into a person’s life, revealing not only his particular movements, but through them his familial, political, professional, religious, and sexual associations.”

“They now have to have probable cause to believe that person is committing a crime and demonstrate that probable cause to a judge before they go demanding location data,” said Ben Ruddell, staff attorney with the American Civil Liberties Union of Illinois.

There was little to nothing stopping a law enforcement agency from demanding personal data before this ruling, Ruddell said.

“All it would have to do is go to the person’s cell phone company and demand that information,” he said.

Prosecutors argue this ruling will makes catching criminals harder.

Technology has become so advanced that an agency is able to operate a device that mimics a cell tower. Once a phone connects to the device, thinking it’s a point of connection, the controller can extract data from, control, or even contact other devices using the linked phone. All this happens without the user’s knowledge. Illinois requires a warrant before such devices can be used.

From: Illinois News Network

By Reilly Law Office, Jun 25 2018 02:52PM

Saying the law is essentially antiquated and violates the equal protection rights of divorced parents, a DuPage County judge has found a state law requiring divorced couples to fund their children’s college education to be unconstitutional.

Saying the law is essentially antiquated and violates the equal protection rights of divorced parents, a DuPage County judge has found a state law requiring divorced couples to fund their children’s college education to be unconstitutional.

On May 4, DuPage County Circuit Court Judge Thomas A. Else ruled the 40-year-old Illinois law cannot be used to force a divorced father to pay against his will for his daughter to attend what he believes to be a Florida “party school,” rather than a school elsewhere which offers the academic coursework he believes his daughter should be taking to pursue her purported chosen major.

According to the court decision, Charles D. Yakich and Rosemary A. Aulds are the divorced parents of a daughter, Dylan; Yakich had primary custody. Dylan and her mother allegedly determined she would attend Florida Gulf Coast University, although it does not offer a degree in her chosen field of marine biology. Yakich, who detailed the ways in which he encouraged and supported Dylan’s interest in marine biology, said he would fully pay for college if Dylan transferred to Scripps Institute of Oceanography in San Diego or the University of Hawaii, but his offer was refused.

On July 22, 2016, when Dylan was 21, a DuPage County Circuit Court heard Aulds’ petition under a state law seeking to require a financial contribution from Yakich for Dylan’s college expenses. The court ordered both parents to contribute 40 percent each and Dylan to cover the remaining 20 percent through grants, scholarships, work study or employment. However, Dylan did not apply for grants or scholarships or get a job, and Aulds paid her portion.

Yakich filed a motion Sept. 23, 2016, seeking to have the state law under which he had been ordered to pay for his daughter’s college tuition declared unconstitutional. On Oct. 6, the Illinois Attorney General’s Office gave notice it wouldn’t intervene in the dispute.

On Jan. 11, 2017, Yakich filed another motion, seeking to have his obligation of support terminated or modified based on Dylan’s noncompliance with the earlier order. The court denied that motion based in part on a determination Yakich wasn’t damaged monetarily by his daughter’s actions. Yakich filed another motion seeking to have the law struck down Aug. 1, 2017, the motion upon which Else has now ruled.

According to Yakich’s motion, the educational expenses law doesn’t contain provisions for input of either parent as to choice of school. Further, he said the law requires divorced parents to fund college expenses while not requiring the same of married couples, thus creating two classes of children, meaning he is denied rights enjoyed by married or single parents to make decisions about his children’s education.

Else explained that, while a 1978 Supreme Court of Illinois decision in Kujawinski v. Kujawinski upheld the relevant section of the Illinois Marriage and Dissolution of Marriage Act, there has been a cultural evolution in the ensuing 40 years. In 2018, fewer than half of families have two parents in one home.

“The rational basis standard utilized in Kujawinski presumes that never married or divorced couples are less normal, and less likely to provide post-secondary education for their offspring than couples who are married, or single parents. While this may have been true in 1978, there is no basis for such a conclusion today,” the judge wrote.

Among the cases he cited in support was the 2000 U.S. Supreme Court opinion in Troxel v. Granville, in which Justice Sandra Day O’Connor wrote “the demographic changes of the past century make it difficult to speak of an average American family.”

Else further clarified that Yakich’s argument is not that he shouldn’t pay for college — which he offered to do in full — but that he was forced to do so without any input on where she enrolled. Were he and Aulds married, “and if his daughter wished to attend what is colloquially described as a ‘party’ school, she would do so on her own,” Else wrote.

In determining Yakich was denied equal protection rights, Else also said the law “cannot reasonably be construed in a manner that would preserve its validity in this case.” He formally vacated the July 16, 2016, order and ruled the law unconstitutional.

Yakich is represented in the case by attorney Vincent DiTomasso, of the firm of DiTomasso Lubin Austermuehle P.C., of Oakbrook Terrace.

From: Cook County Record

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