Revised Uniform Fiduciary Access to Digital Assets Act

The Revised Uniform Fiduciary Access to Digital Assets Act (755 ILCS 70) (hereinafter “Act”), that took effect on August 12, 2016, “permits individuals to expressly consent to disclosure by third parties of the individual’s online accounts and grants individuals the right to delegate authority to others to access those online accounts and digital records” (The Docket Vol. 25 No. 9, pp. 18).  Further, the Act dictates how and in what manner authorized fiduciaries are to obtain lawful consent and manage password-protected online accounts.  Concurrently with the revision of this legislation, the Illinois Criminal Code was also updated to reflect the changes.  Authorized fiduciaries will no longer be guilty of computer tampering by accessing digital property, and can legally obtain access to digital assets and electronic communication, so long as the procedures in the Act are followed. 

The Act works in conjunction with the Computer Fraud and Abuse Act (which prohibits the unauthorized access of computers and their contents), the Stored Communications Act (which criminalizes unauthorized access to electronic communications) and the Computer Crime Prevention Act (which makes it a crime to access computer records without permission) to protect the digital assets of decedents and/or disabled persons.   A “digital asset” is defined by the Act as “an electronic record in which an individual has a right or interest…[but] excludes assets or liabilities,” (IBJ Vol. 104 No. 11, pp. 29) such as the actual funds in an online account.  The term can be used to refer to anything that has to do with digital property (e.g. computers, cell phones, tablets, cameras, music players, etc.), as well as any content or communications stored on the device.  It is considered federally criminal if any digital property (physical electronic hardware) is accessed in an unauthorized manner.  Computers, tablets and cell phones used in interstate and foreign commerce are federally “protected computers.”  Custodians of digital assets (online account service providers) are federally prohibited from disclosing any electronic communications to anyone but their originators unless lawful consent is given, or unless the information is publicly accessible.  Any custodian or person who accesses or discloses digital communications without proper lawful consent is “subject to fines, imprisonment, and in some cases, civil liability” (IBJ Vol. 104 No. 11, pp. 29).  

The Act’s main purpose is to give fiduciaries that fall under any of the listed categories below “the legal authority to manage digital assets and electronic communications in the same way as they manage tangible assets and financial accounts” (IBJ Vol. 104 No. 11, pp. 29) with specific lawful consent.  Conversely, it gives to custodians of digital assets and electronic communications the “legal authority to deal with the fiduciaries of their users, while respecting the user’s reasonable expectation of privacy for personal communication” (IBJ Vol. 104 No. 11, pp. 29).  A “fiduciary” may fall under any of the following categories: (1) a personal representative of an estate (executor or administrator); (2) an agent under power of attorney; (3) the trustee of an estate (successor trustees included); or (4) a court appointed guardian of an estate (IBJ Vol. 104 No. 11, pp. 29).  Family and friends of a decedent or disabled person are not considered fiduciaries, and thus not covered in the Act, unless they are named or assume the role of a fiduciary in estate administration documents the same way as a fiduciary does, or unless they are considered “designated recipients.”  

One major exception to the Act is for any digital assets of an employer used by an employee during the usual course of business.  Custodians may disclose without lawful consent any electronic records and the content of electronic communications if they were used by an employee during the usual course of business.  

Many custodians provide online tools for the designation of recipients of digital assets.  For example, Facebook now allows you to designate a “legacy contact.”  A person designated by a user in this manner will take precedence over “any other direction by the user as to that specific account” (IBJ Vol. 104 No. 11, pp. 31). However, most custodians do not provide this tool.  

     When considering whether to give broad authority to access digital accounts to fiduciaries, the client should address privacy considerations.  Broad authority means that the fiduciary could access email and other personal communication.  Some of these communications may not have ever intended by the client to be accessed by anyone but the sender and recipient.  Thus, the client should exercise caution in choosing how broad of authority and to whom that authority should be granted.  Also, it should be ensured that the fiduciary being named is technologically savvy.  It could be difficult for anyone with little technological experience to access the desired accounts, let alone make distributions or complete complex online account management actions.  

Homestead Improvement Exemptions

      Pursuant to 35 ILCS 200/15-180, homestead property that has been improved may qualify for a homestead improvement exemption.  For homes in Lake County that have been improved, this exemption “defers, for four years, any increase in the assessment of the property due to an addition or other improvement to the home for which the Township Assessor would add value.” Lake County Assessment Office Website, “Homestead Improvement Exemption” (Retrieved April 18, 2018). In order to qualify for this exemption, the property must be owned and used exclusively for a residential purpose. It must be demonstrable that a proposed increase in assessed value is attributable solely to a new improvement on the existing structure. 35 ILCS 200/15-180.  The maximum deduction has been capped at $25,000 of the home’s equalized assessed value for Lake County.  

      The Illinois State Legislature also allowed for the inclusion in exemption eligibility homestead properties that have been rebuilt following a catastrophic event.  In order to qualify, the home must not only be homestead property, and owned and used exclusively for a residential purpose, but also must demonstrate that “an increase in assessed value is attributable solely to….the rebuilding of a residential structure following a catastrophic event.” Id.  It is also required that the structure must have been rebuilt within two (2) years of a catastrophic event.  In terms of the value of the exemption, it shall be applied to the increase in value of the rebuilt structure rather than the value of the structure before said catastrophic event.  

      In counties with 3 million or fewer inhabitants, it is the burden of the local Township Assessor’s Office to either automatically grant or notify taxpayers who may be eligible for the homestead improvement exemption for properties rebuild following a catastrophic event. Id. In counties with 3 million or more inhabitants, any properties that have been rebuilt following a catastrophic event must file an application and valuation complaint with the local Township Assessor’s Office.  Additional documentation may be required from the applicant. Id.

Cook County Notarial Requirements

      Due to incidences of real estate related fraud, additional recordkeeping precautions have been imposed for documents that transfer, or purport to transfer, title to residential real estate in Cook County. 5 ILCS 312/3-102.  These additional recordkeeping requirements follow:

      1.  The notary public must maintain a Notarial Record in connection with each document of conveyance. The record must contain information such as the date, type of document, PIN, signature and address of signors, description of the satisfactory evidence for identification of signors, a certification that the property is Residential Real Property as defined in the Act and the notary’s phone number, address, commission expiration date, name of employer, and employer’s address. 5 ILCS 312/3-102 (c) (1-5).  A sample Notarial Record for Cook County property transfers can be found in 5 ILCS 312/3-102 (f).  

      2.   The notary public shall “require the person signing the document of conveyance…to place his or her right thumbprint on the Notarial Record.” 5 ILCS 312/3-102 (c)(6). The law also accounts for situations where a right thumbprint may not be available. In such cases, a left thumb, or any other available finger must be used.  Further, if no thumbprint or fingerprint is available, it shall be so indicated on the Notarial Record, and an explanation of the physical condition impeding the availability of a fingerprint should also be included. All prints may be obtained by any means which “reliably captures the image of the finger in a physical or electronic medium.” Id. 

      3.   If the notary is a principal, employee or agent of a Title Insurance Company, Title Insurance Agent, Financial Institution, or attorney at law, “the notary shall deliver the original Notarial Record to the to the notary’s employer or principal within fourteen (14) days after the performance…for retention for a period of seven years as part of the employer’s or principal’s business records” 5 ILCS 312/3-102 (d). In the case that a sale or merger occurs with the business entity or person employing the notary, the successor or assignee entity or person will assume responsibility for the seven (7) year retention requirement. In the case of liquidation or other cessation, the records should be delivered to the Cook County Recorder of Deeds for retention. 

      4.   If the notary is not a principal, employee or agent of a Title Insurance Company, Title Insurance Agent, Financial Institution, or attorney at law, then the notary shall deliver the original Notarial Record to the Cook County Recorder of Deeds within fourteen (14) days after the performance. The Cook County Recorder of Deeds will then retain the record for the seven (7) year requirement. 5 ILCS 312/3-102 (e).

      5.   Notarial Records or any other mediums that contain captured images of thumbprints or fingerprints should not be made available or disclosed, except in the case of a subpoena received from a court of competent jurisdiction. 5 ILCS 312/3-102 (i).

Password Managers

Keeping track of online, password-protected login information has become burdensome and unsecure.  Rather than keeping digital access instructions written and stored in a desk drawer or in a file on a computer’s desktop, there now exists a utility called a password manager.  A password manager can “securely store and recognize passwords, login credentials, credit card information, bank account information, IDs…and any other information you might need” (Illinois Bar Journal, Vol. 106 No. 3, pp. 48).  It keeps all credentials and personal information in one place, automatically fills web forms, generates strong passwords, recommends when weak passwords should be changed, notifies you of any security breaches of your online accounts, and can add an extra layer of security on top of username and password (i.e. two-step authentication).

      A password manager is not affected by getting a new computer, clearing cookies, or using another browser and is a valuable tool for passing along digital access information to fiduciaries as will be needed for estate administration after incapacity or death.  In sum, getting a password manager can be a valuable tool to both your estate plan, as well as the management of your personal and business affairs. The Illinois Bar Journal offers a password manager comparison at: https://acgcompares.com/isba-password-managers-comparison-chart/.

Electronic Tax Lien Registry

          In an effort to improve efficiency and implement new technology, the Illinois Department of Revenue (“IDOR”) has transitioned to an electronic tax lien registry, designed to replace county level filings. The registry functions as an online searchable database, and contains all active liens filed by the IDOR.

         The cost of filing 39,000 liens state-wide last year cost the IDOR $700,000 in fees and labor; the new electronic registry is expected to help reduce these costs and create a more effective mechanism for the collection of taxes. Information about liens is expected to be produced more quickly, filing costs reduced, and receipt of tax funds accelerated. The registry will now be the only source for obtaining tax lien information.

         There are no fees, sign-up expenses or any other costs associated with searching the registry. To access the registry, visit the IDOR webpage at tax.illinois.gov and click on the “Quick Links” tab. A YouTube tutorial video can be found at https://www.youtube.com/watch?v=DITvksZs2JU and questions regarding the registry may be emailed to rev.lien@illinois.gov

Updated Fee Schedule for the Lake County Recorder of Deeds

            Over the summer of 2017, Public Act 100-0271 was enacted by the Illinois General Assembly in an attempt to encourage local governments to adopt “predictable fee” structures for the recording of documents. This “predicable fee” intent was implemented by Lake County pursuant to County Resolution 17-0800 and County Resolution 17-801, which justified and authorized the raising of taxes collected from recording documents to more than two times their current amount to “capture the cost” of running the Lake County Geographic Information System (GIS) and the Recorder Automation Fund. All fees charged now include a Fifteen ($15.00) Dollar charge for the Automation Fund, a Ten ($10.00) Dollar charge for Rental Housing Support Program and a Twenty-Three ($23.00) Dollar charge for the GIS. The changes to the fee structure that will most immediately affect Real Estate Law offices follow.

            The Lake County Recorder of Deeds has now streamlined the fee schedule to only six (6) flat fee amounts, such that recording fees will no longer vary based upon the number of pages a particular document contains. Most real estate documents are going to be governed by the “standard document” classification and fee schedule. Standard documents are 8½” x 11” sheets that must be separate, and may have up to five (5) Property Index Number (PIN) or other related document number references. 55 ILCS 5/3-5018 and 55 ILCS 5/3-5018.1 lays out other various stylistic requirements pertaining to margins, ink type, signatures, dates, staples, notations, page numbers, etc. and must be followed for the document to be accepted and subsequently recorded. These stylistic requirements have not changed since before the fee schedule was updated. The flat fee for standard documents is now Sixty ($60.00) Dollars, and no longer includes any charges for additional pages.

            If the document to be recorded is a public utility easement or other document to be recorded by a government agency, then the Ten ($10.00) Dollar RHSP charge does not apply. This means that RHSP exempt standard documents are Fifty ($50.00) Dollars, and FHSP exempt non-standard documents are Sixty-Two ($62.00) Dollars.

            If the document to be recorded is a non-standard document, then the stylistic requirements are dictated by 55 ILCS 5/3-5018.1, and the fee is Seventy-Two ($72.00) Dollars.

            For information on UCC terminations, or filings, and/or State/Federal lien releases, please visit https://www.lakecountyil.gov/DocumentCenter/View/3205.

Cook County Deed Filing Instructions

            Filing a deed in Cook County can be divided into three separate phases: (1) Materials Organization; (2) Visit to the Department of Finance; and (3) Visit to the Recorder of Deeds.

Materials Organization

            In order to file a deed in Cook County, the necessary documents are as follows: (1) Tax Declaration (MyDec); (2) Tax Stamps (or “Zero Stamps” if an exempt transfer); (3) A Grantor/Grantee Affidavit (exempt transfers); (4) The Deed to be Filed (which must contain PIN number, complete legal description, commonly known address, grantee’s name, return address (or “mail to” address), and preparer’s name and address); and (5) A Full Payment Certificate (“FPC”).  Documents numbered (3) through (5) must be properly executed and (3) and (4) notarized according to Illinois Notarial Record Requirements (5 ILCS 312/3-102).

            The requirement for an FPC is not expressly stated on the Recorder of Deeds’ website, and worse yet, most individuals working the phones at the Recorder’s Office, and even those at the Water Department or Department of Finance, do not know about the FPC processes.

            To obtain an FPC, a Full Payment Certificate Application must be completed and submitted, for which a $50 filing fee is assessed unless the application is properly marked for exemption.  The FPC application may be found at https://www.cityofchicago.org/content/dam/city/depts/fin/Utility/fillable_FPC_app_7-9-15.pdf.  The completed Full Payment Certificate Application must be scanned, along with the executed and notarized Deed and Grantor/Grantee Affidavit and emailed to fpc@cityofchicago.org or mailed to the following address:

City of Chicago Department of Finance
333 South State Street, Suite 330
Chicago, Illinois  60604

            The Tax Declaration may be prepared by using MyDec, or a handwritten or typed form is acceptable.  If using MyDec, make sure that the Declaration is finalized by clicking “Accept Declaration” on the top right of the page, and then printing the accepted and completed version of the ENTIRE declaration.  Finally, visit the Cook County Recorder website to determine the proper amount of the filing fee.  It is important to note that each additional page after two pages has a two ($2) dollar fee, and that fee is in addition to the prescribed fees for each document.  For example, when filing an exempt transfer, the Grantor/Grantee Affidavit has a prescribed fee of two ($2) dollars, but also is considered an additional page to the deed, which increases the fee an additional two ($2) dollars.  Thus, the fee for filing the Grantor/Grantee Affidavit is four ($4) dollars.  The Cook County Recorder of Deeds website fee schedule can be found at http://cookrecorder.com/recording-fees/

              It is also advisable to bring a small amount of extra cash or a check when traveling to the Recorder of Deeds as added insurance in case an error was made in the fee calculation.  If more than one deed is being filed, all total fees can be combined into a single check to be given to the cashier.  Checks must contain the contact information for the issuing party, including the name, address and phone number.

Visit to the Department of Finance

              Before taking the documents to be filed, you will need to stop at the Department of Finance to collect the tax stamps.  Make sure you have an FPC and an accepted, completed MyDec (entire declaration) paper clipped together for each filing.  You will wait in line for a specific cashier who is designated to issue stamps; there will be others in the same line who are only there to pay tickets and bills, and they will pass you up, often causing confusion, jealousy and frustration.  Once you are given the stamps, make sure you separate out each stamp and receipt for each deed.  Keep the printed MyDecs.

               Once you have the stamps, which come as a sticker with a barcode on them, you will stick them on to the signed, notarized deed.  Make sure you don’t stick them on the top of the first page, as this is for Recorder of Deeds use only, and could result in a penalty.  If it is your first time filing a deed, or if you are new to the process, it is most likely best to wait for the supervision of a document reviewer from the Recorder of Deeds to ensure you are abiding by all document requirements.

Visit to Recorder of Deeds

               Upon completion of your visit to the Department of Finance, with all your documents, stamps, receipts, and MyDecs, you will proceed directly across the hall to the Recorder of Deeds.  You will first go to the document reviewers’ counter, where you will present your documents.  It is required that you stick the stamps on the deed yourself; no personnel can do this step for you.  Again, if it is your first time, or you are unfamiliar with the process, it is good practice to do this under the supervision of the document reviewer to ensure it is placed correctly and no data obscured.  You will only need to submit the deed (with the stamp affixed to it and all aforementioned requirements fulfilled) and the Grantor/Grantee Affidavit.  This will suffice for them to enter the data and send you across the room to another teller, who will then give you a “transfer tax paid” sticker to also stick on your deed.  It is often difficult (especially under the condition that you have a lengthy and wordy deed that leaves little to no room due to multiple signature blocks, exemptions, preparers’ information and legal descriptions) to find room for two, or in some cases three, stickers to be visible and no information obscured. For this reason, it is advisable to ask the second teller to assist you.

              Next, and finally, it is time to take your completed documents over to the cashier. This is where they take each deed for official recording, receive payment, and input the payment-issuing parties’ information (name, address and phone number) into the system.  Once all proper procedures are followed, the cashier will officially record the transfer of property and stamp the deed on the top of the first page (or elsewhere in certain circumstances).  Once the payment is made, all the original, filed documents will be returned. 

 

Illinois Deposit of Wills

Conventionally, it has been common practice for attorneys to store the original copies of estate planning documents.  The Illinois Deposit of Wills was created in 2010 in an effort to address the issue of original will and trust storage after attorneys can no longer store the them.

Original wills, codicils, trusts and trust amendments are accepted for deposit in the repository at the Secretary of State’s Index Department in its Springfield office however, before tendering the original documents for deposit, the attorney must certify that he or she performed a ‘good-faith search for the testator’ to no avail.  The fee for deposit is fifteen ($15) dollars and the one-time maximum deposit is limited to fifty documents.  If more than five documents are presented for deposit, an appointment with personnel is required.  The repository wants no responsibility for transporting the original documents, thus maintains that an attorney, or attorney’s agent, must make the deposit in person at the Springfield office.  Upon acceptance, the original documents are immediately “sealed in an envelope that must contain substantial identifying information including the testator’s birth date, alternative names, descriptions of the estate planning documents enclosed, and other information as set forth in the Illinois Secretary of State Act, 15 ILCS 305/5.15.” ISBA July 2012; Vol. 100, No. 7, pp. 346. Once deposited, the original documents are held for 100 years in a vault in the basement at the Index Department and entered into a searchable database.

To retrieve a document, the retrieving party needs to present a death certificate, a letter stating the party for whom he or she is searching, and pay the retrieval fee of ten ($10) dollars.

 

The Address for the Index Department is 111 East Monroe Street, Springfield, Illinois  62701

The Index Department’s phone number is 217.782.7017

More than five documents requires an appointment with personnel at 217.782.0705

 

NEW LLC ARTICLES OF ORGANIZATION LAWS

As of July 1, 2017, there have been several statutory changes to the Limited Liability Act, 805 ILCS 180, et seqwhich could affect your current LLC, or your venture to start one up in the future. The law aims to conform Illinois Law more closely with a law drafted by the National Conference of Commissioners on Uniform State Laws. Fifteen states and the District of Columbia have already adapted the law as the Conference wrote it, and Illinois has made changes modeled after it. 

Default Member Management
Under the revised law, an LLC is now assumed to be member-managed by default. Unless there is explicit language in the operating agreement stating that the LLC is to be manager-managed, this default member-managed status will be the standard. Also, similar to Delaware, when filing Articles of Organization for an Illinois LLC, you will no longer be required to specify whether it will be member-managed or manager-managed, but instead will only be required to provide information regarding each manager and each member having such management authority. 

Oral Operating Agreements
It is now permitted to make oral and implied operating agreements, and such agreements are also expressly exempted from the statute of frauds.

Note: Because the rule on oral operating agreements is rather new, it is advisable to consider continuing to draft operating agreements in written documents to be executed by members and managers; it will soon become clear how the oral operating agreements will play out. If you have an existing operating agreement, revisions may be warranted. Schedule a consultation with our office today to ensure your LLC's operating agreement is still up-to-date. 

Designating Specific Authority of Members and Managers
By filing a "Statement of Authority," Illinois LLCs can now establish or limit the authority of a member or manager to enter into other transactions on behalf of the LLC, including real estate transactions. A Statement of Denial may be filed with the Illinois Secretary of State if the member or manager opts to deny the powers granted to him or her in the Statement of Authority.

Waiver of Fiduciary Duties
Fiduciary duties may now be eliminated or restricted through the operating agreement, with the exception of the duty of care. The relevant language in the document must be clear and unambiguous. Although the duty of care cannot be completely eliminated, the operating agreement can now alter the duty of care so long as it does not authorize intentional misconduct or a knowing violation of law.

Limitation of Member’s or Manager’s Liability
Under the new, revised law, a member or manager may now eliminate or restrict their liability to the LLC and other members, unless the liability relates to a breach of certain fiduciary duties not entitled to the member or manager, or an intentional infliction of harm on the LLC or another member or an intentional crime.

Elimination of Assumed Agency Status
A member of an LLC is no longer considered an agent of the LLC solely as a result of being a member.

Access to Books and Records
LLCs may now impose reasonable restrictions and conditions on access to books and records of the LLC. The new law also clarifies the rights of members, disassociated members and transferees. 

Authorized Signatories for State Filings
Any document filed with the Secretary of State may now be signed by any person who is authorized by the LLC, both digitally and in paper form. The name and title of the person signing are required to be printed or typed where indicated on whichever form is applicable to the purpose intended by the LLC. 

Administrative Dissolution
When an LLC is dissolved administratively, for three years after the dissolution no other entity may take on its name. If the LLC becomes reinstated within the three year period, it will resume the usage of its previous name. 

Conversion
The Act now permits a GP, LP, Business Trust or Corporation to be converted into an LLC, and vice versa, rather than only a GP and LP. Previous to the revised and updated law, only an entity other than a partnership could convert to an Illinois LLC through a complex process including a merger. Now, the entity may simply file "Articles of Conversion" with the Illinois Secretary of State, and the process is complete. 

Domestication
Through the filing of "Articles of Domestication" with the Secretary of State, a foreign LLC will be permitted to become an Illinois LLC. 

Please let us know how we can help. Schedule a consultation today!

Incorporation by Reference

In re ESTATE OF OLIVE CLINE MESKIMEN, 39 Ill. 2d 415 (1968).

In order for a document to be incorporated by reference in a will, three things are necessary: (1) the will itself must refer to such paper to be incorporated as being in existence at the time of the execution of the will and in such a way as to reasonably identify such paper in the will and in such a way as to show the testator's intention to incorporate the instrument in the will and make it a part thereof; (2) such document must in fact be in existence at the time of the execution of the will; (3) such instrument must correspond to the description in the will and must be shown to be the instrument therein referred to. All three requisites must coexist in order to incorporate an extrinsic document into a will.

 

Power of Attorney for Health Care (Illinois)

By Matthew A. Quick Effective January 1, 2015, the Power of Attorney Act relating to health care powers of attorney will change and a new form will be prescribed that includes a different notice and some different contents and directives.

Please note: if you currently have a valid power of attorney for health care, the savings clause of the new law provides that existing powers of attorney for health care will remain valid.

I am happy to help with any questions.

Assessment Lien and Foreclosure (Illinois)

By Matthew A. Quick In the case of 1010 Lake Shore Association v Deutsche Bank National Trust Company, the Court held that a bank shall pay outstanding assessments due on a condo, including assessments incurred prior to bank's purchase of condo, and any late fees. A lien created under Section 9(g)(1) of Condominium Property Act for unpaid assessments by a previous owner is fully extinguished after judicial foreclosure and sale when the buyer (in this case the bank) pays assessments.

Residential Real Property Disclosure Report (Illinois)

By Matthew A. Quick The Illinois Court of Appeals in Messerly v Boehmke ruled on a case that involved an incomplete residential real property disclosure report and the purchasers suing the sellers regarding information that was not included on the report because it was left blank. The Court said that the purchasers of residential real estate did not waive their right to recovery against the sellers because they relied on an incomplete residential real property disclosure report.

The lesson: sellers should, in good faith, complete the entire residential real property disclosure report for consideration by the purchasers to give full disclosure of the premises and forestall an action regarding information not contained on the report.

Quit Claim Deeds and Continuation of Title Insurance

By Matthew A. Quick Title insurance coverage is dictated by the terms of the policy issued by the title insurance company. In most, if not all, policies for title insurance there is a provision for "Continuation of Coverage" or "Continuation of Insurance." Typically, this provision provides that the insurance will continue only so long as the insured holds an interest in the land or has liability by reason of warranties given in any transfer of the title.

It is common for real estate to be conveyed with quit claim deeds and/or no title insurance. Perhaps the informality is due to estate planning or the relationship between the grantor and grantee, nonetheless the conveyance is without warranties, thus, could discontinue title insurance coverage.

To address this issue there usually exists a policy modification endorsement that can be purchased from the title insurance company when any deed modifies the current vesting. However, this endorsement does not cover a quit claim deed to a completely unrelated third-party. It will typically cover a spouse that is added or removed from title, or if property is moved into trust.

In addition, consider using warranty deeds to effectuate property transfers rather than quit claim deeds. If a warranty deed is the proper convincing method, it may be useful in continuing the insurance coverage. That is to say, if a title problem arises, the grantees may be able to look back to the grantor for title coverage.

The lesson: Before transferring real estate, talk with an attorney to avoid unintended consequences.

Trusts and Doctrine of Election (Illinois)

By Matthew A. Quick The court in the case of In re Estate of Boyar stated that the doctrine of election applies to testamentary trusts and because the petitioner accepted property under the trust, thus ratifying it, the petitioner is barred from maintaining action to contest last amendment to the trust. The court opined that the rules of will construction apply to testamentary trusts that differ from wills in form but not in purpose or substance. The doctrine of election applies regardless of value of property taken under trust. By taking and retaining property, despite repeated requests for its return, the beneficiary makes a binding election which cannot be negated by later attempting to return the property.

Trusts and Equitable Deviation (Illinois)

By Matthew A. Quick In the case of Church of the Little Flower v US Bank the Court was asked to reform a trust based upon the doctrine of equitable deviation. The Court held that this doctrine did not apply and the trust could not be reformed. The Court stated that the doctrine of equitable deviation should not apply for the sole reason of further rewarding the beneficiaries, but only in situations where the trust is so inefficient that its continuation would necessarily interfere with the trust's purpose.

The lesson: before executing a trust, ensure the provisions of the trust will properly distribute funds to the beneficiaries.

Correcting a Recorded Deed (Illinois)

By Matthew A. Quick Typically, in order to correct a deed that has been recorded, the original, recorded deed must be used. The information on the deed that requires correction must not be erased or scribbled out and corrected, but crossed out and corrected. The corrected deed must state that the deed is being re-recorded to correct [whatever the error or deficiency]. In addition, a new filing fee will be collected, therefore, there must be enough space on the first page of the deed for a new stamp. If there is not enough room on the first page of the deed for a new stamp then a cover page must be added.

Explore the accuracy of this process with the recorder's office before altering any deed.

Donation of Home and Tax Deduction

By Matthew A. Quick In the case of Rolfs v. Commissioner of Internal Revenue, the Court stated that the donation of a house to a fire department for the purpose of burning the building for fire department training did not result in the ability of the taxpayers to realize a deduction of the entire value of the building. In fact, the Court stated that the taxpayers received a benefit from the free demolition of the home.

Contracts and "Cooling-Off Periods" (Michigan)

By Matthew A. Quick As a general rule, consumers do not have a right to cancel a contract for the sale of goods or services, but certain instances exist when consumers have a right to a "cooling-off period" where, by law, a specific time is allowed to cancel a contract after signing it.

The first thing anyone should do when determining his or her rights under a contract is READ YOUR CONTRACT. Contract provisions have the ultimate effect on the rights of the parties. If the contract provisions do not provide the relief sought, the following laws may: Michigan's Gift Promotion Act (MCL 445.931), Michigan's Home Solicitation Sales Act (MCL 445.111, et seq.), Michigan's Home Improvement Finance Act (MCL 445.1101, et seq.). The Federal Trade Commission has a similar rule for sales made at someone's home (16 CFR 429, et seq.), as does the Federal Truth in Lending Act for home equity loans.

These acts require the sellers to provide written notice in the contract of the rights afforded by the acts. If the required notice is not provided by the sellers in the contract, the length of time the consumer has to cancel the contract may be extended.

The lesson: If you engage in a business that sells goods, services or does home improvement (plumbing, electrician, construction, etc.), be sure you have the language required by law in your contracts. Failure to do so could mean the consumer has a broader timeframe in which to cancel the contract.