Law Offices of Alan E. Sohn Chartered

09/04/2024

Why a Trust-First in a Series Answer No. 1

I have been asked many times- “Why do I need a trust?” There are many reasons to set up a trust during your lifetime. Answer Number 1, which is probably the most common, but not necessarily the most important reason given, is that it can achieve the avoidance of probate.of probate.but not necessarily the most important reason given, is that it can achieve the avoidance of probate.of probate.

Many people have a “fear” of probate because of all the apocryphal stories regarding the cost of probate and the delays it entails in the administration of estates. Since the advent of independent administration, however, the costs of administering a probate estate have been greatly reduced along with the paperwork and delays involved. But you still have filing fees, publication costs, and notice requirements to known creditors, not to mention attorney’s fees for preparing the necessary court papers to open and close estates, etc..

Now to the Answer, which can be told by relating a true story. Several years ago, I
drafted a trust for an elderly couple. I advised them that all their assets must be
transferred to the trust (except for their checking account and other assets of minimal
value) to effectuate the avoidance of probate. I shepherded the transfers, and they were completed. (In many cases, people establish the trust, but fail to follow up with the transfers of assets, which defeats the purpose). The couple’s family expressed unhappiness about the additional cost of creating the trust and doing the transfers, to which I responded that the overall costs, not to mention the delays of postmortem distributions, would be substantially reduced.

Recently, the husband died and one of the couple’s children called me to inquire
regarding the legal and administrative costs that would be incurred. In response, I told her that as the value of the estate was under the Illinois and federal estate tax exemptions, that very little had to be done, and that she could handle virtually everything without an attorney. No probate filing fees, attorney’s fees, publication costs, or Notices to Creditors. She was, to say the least, very happy, and I was redeemed.

Stay tuned for Answer No.2

03/04/2024

Higher Interest Rates Have Made A Qualified Personal Residence Trust (QPRT) A More Effective Estate Tax Reduction Device

While Christmas has passed, it is still a good time to consider the gift of transferring a primary or secondary residence from the senior generation to the next generation. Why is that? Because
the higher interest rates which are now in place, will result in the calculation of a higher value of a retained right to possession and a reduced use of the federal estate tax exemption.

What is a QPRT? It is a way to transfer property to loved ones with a reduced gift tax value by transferring the title, but not the right to possession of a family residence for a term of years.

Commonly, the transfer is of a primary residence or vacation home.
It is accomplished by transferring the title of the property to an irrevocable trust, while retaining the right to possession for a term of years. The taxable gift is, thereby, reduced by the value of
the retained right of possession. At the end of the term, assuming the grantor or grantors outlive the term, the ownership of the entire property is transferred to the remainder beneficiaries
without incurring an exorbitant wealth transfer tax burden.

As with all gifts of significant value, a gift tax return is required that is supported by an appraisal; however, the gift tax return will not be due until April 2025 for a gift in 2024. If the grantor outlives the term, the grantor may remain in possession by leasing the residence for fair market value. If the grantor fails to outlive the term, the property is brought back into the grantor’s estate. In the latter case, the only costs incurred are the fees of the attorney and the appraiser.

Many families of moderate or high net worth are considering how to reduce their taxable estate due to the scheduled 50% reduction of the federal exemption as of January 1, 2026. The exemption is expected to land at about $6M. A QPRT is a painless way to reduce your estate tax exposure, as you will not have given away your right to live in the family and/or vacation residence, while reducing the ultimate estate tax burden on your heirs.

If you would like to discuss whether a qualified personal residence trust is beneficial for your family, please do not hesitate to contact me.

© Alan E. Sohn 2023

Call now to connect with business.

21/03/2024

IS IT TIME TO CREATE AND INITIATE A GIFTING PLAN?

For the past 7 years, people in the higher echelons of accumulated wealth have enjoyed an unprecedented federal estate tax exemption which is now almost $14 million per person, which for married couples could translate into almost $28 million.

However, this level of exemption will not last forever, as it is scheduled to sunset and be reduced to approximately $7 million per person at the end of 2025. The estate tax rate is 40% of the amount that exceeds the exemption.

In addition, residents of Illinois should not forget that Illinois also imposes estate taxes on estates valued at greater than $4 million. Under the algorithmic calculation of that tax, accomplished through the Illinois Attorney General’s website, a $5 million estate will generate an Illinois estate tax of almost $300,000.00. That’s real money.

Therefore, for those persons whose estates will incur such taxes, it is time to consider a lifetime gifting plan in order to reduce or eliminate the obligation on your loved ones to pay such taxes The amount of such lifetime giving will depend upon a number of factors, including family dynamics, the ability of the younger generation to manage sizable gifts, the assets available for gifting, the cost basis of the assets, and the level of control the senior family member desires to maintain. Each family comes with a different set of factors to be considered.

In the past I have helped my clients develop and implement such plans and would be
pleased to discuss the feasibility, advantages, and disadvantages of such a plan with
interested persons.

15/02/2024

I recently presented “Illinois Estate Planning 2024: New Laws, Old Tools, and the Changes You Need to Make” for National Business Institute, which you can now watch OnDemand! Use promo code FPDN50A at checkout to get $50 off your purchase. Check it out at https://www.nbi-sems.com/ProductDetails/97773SVDM!

National Business Institute

05/02/2024

Dear Business Executives/Owners,
BNI Northshore Business Partners would like to invite you to Visitor Day on 21 Feb 2024 from 8:00 to 9:30 a.m. held in Northbrook. We have below business categories open:
1) Attorneys, real estate and business
2) Business Banker
3) Commercial Realtor
4) Digital Marketing, SEO, Web, IT
5) HR & Payroll
6) Photographer
7) Property Management
8) IT Security

BNI is a worldwide organization that passes billions in referrals each year, and there are many benefits to being a part of a chapter like ours along with Increasing your revenue, Making connections in the community, Finding and working with power partners that are a continual source of revenue, Enjoying complete industry exclusivity, and Having a stage each week to ask for what you need.

Northshore Business Partners is a lively group of top-notch professionals from the North Shore and surrounding suburban area who meet virtually each week from 7:15 a.m. to 8:45 a.m. to pass referrals and help catapult each other’s businesses to the next level. If you have been
asking yourself how you can gain access, meet more influential people with connections, market successfully, and increase your bottom line, we encourage you to check us out. We are seeking high-level professionals in their fields who want to grow their business, have a commitment to excellence, and have a giver’s gain mindset. If this sounds like you, we look forward to meeting you.

Please contact Vibha Chawla at [email protected] if you have questions OR are interested in attending! or SIMPLY click the link to RSVP: http://evite.me/EN1NfQ4f4R

With Jeff Mallari - Business Development, Mike Nielsen, Teresa Pudi, Michael Cohen, Jamie Schultz, Ruth Minnick, Stuart Berman, CFE, CAMS, PSP, Brian Haney, Graham Struthers, Kevin McCabe, Kevin Ramirez,
Alan Sohn, Darren Jossel, CPA, Eric Klein CSA, CPRS, BCPA, Michael Kenny, MBA, AAI, CLCS, Tara Lubin, Kari Gutstein, MSN MASI IP, Ryan May, CFP®, APMA®, Jordan Kagan, Shelley Baird, Tom Bryant, Steve Malin, Daniel Tuser, Suzy White, Matthew Mayer, Chris Heerdegen, Michael Weinstein, and many others - Please like and share with your network.

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You're invited to BNI Northshore Business Partners Visitor Day - Click here to RSVP

16/01/2024

I'm looking forward to presenting at National Business Institute’s upcoming course, Illinois Estate Planning 2024: New Laws, Old Tools, and the Changes You Need to Make” on Thursday, January 25, 2023, 9:00 AM - 4:30 PM Central.

Register today at https://www.nbi-sems.com/ProductDetails/Illinois-Estate-Planning-2024-New-Laws-Old-Tools-and-the-Changes-You-Need-to-Make/Online-Seminar/97773ER_4008783


Gain continuing education credits:
Continuing Legal Education
6.00 - IL CLEincluding - Professional Responsibility: 1.00

CPE for Accountants
7.00 - CPE for Accountants/NASBAincluding - Regulatory Ethics: 1.00
Taxes: 1.50
Specialized Knowledge: 4.50

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Attend a live online seminar to hear faculty present content specific to your state and earn continuing legal education credit to satisfy your continuing legal education requirments for only $389.00

28/12/2023

Higher Interest Rates Have Made A Qualified Personal Residence Trust (QPRT) A More Effective Estate Tax Reduction Device

While Christmas has passed, it is still a good time to consider the gift of transferring a primary or secondary residence from the senior generation to the next generation. Why is that? Because
the higher interest rates which are now in place, will result in the calculation of a higher value of a retained right to possession and a reduced use of the federal estate tax exemption.

What is a QPRT? It is a way to transfer property to loved ones with a reduced gift tax value by transferring the title, but not the right to possession of a family residence for a term of years. Commonly, the transfer is of a primary residence or vacation home.

It is accomplished by transferring the title of the property to an irrevocable trust, while retaining the right to possession for a term of years. The taxable gift is, thereby, reduced by the value of
the retained right of possession. At the end of the term, assuming the grantor or grantors outlive the term, the ownership of the entire property is transferred to the remainder beneficiaries without incurring an exorbitant wealth transfer tax burden.

As with all gifts of significant value, a gift tax return is required that is supported by an appraisal; however, the gift tax return will not be due until April 2025 for a gift in 2024.

If the grantor outlives the term, the grantor may remain in session by leasing the residence for fair market value. If the grantor fails to outlive the term, the property is brought back into the grantor’s estate. In the latter case, the only costs incurred are the fees of the attorney and the appraiser.

Many families of moderate or high net worth are considering how to reduce their taxable estate due to the scheduled 50% reduction of the federal exemption as of January 1, 2026. The exemption is expected to land at about $6M. A QPRT is a painless way to reduce your estate tax exposure, as you will not have given away your right to live in the family and/or vacation residence, while reducing the ultimate estate tax burden on your heirs.

If you would like to discuss whether a qualified personal residence trust is beneficial for your family, please do not hesitate to contact me.

(c) Alan E. Sohn

Call now to connect with business.

19/11/2023

13/10/2023

Do you have questions about estate planning? Estate planning doesn’t have to be intimidating or complicated. But like the air we breathe, everyone needs to have one. Come and join me at The Gorton Center in Lake Forest to help you gain a better understanding of the process and be an educated consumer when seeking assistance to help you protect the ones you love.

Attorney Alan Sohn will cover a number of topics including:
* Why you need a will
* Living trusts and why most people should have one
* Powers of Attorney for property and health care
* And the preservation of one’s personal estate for the desired objects of their bounty during their lifetimes and after their deaths

Join me on October 19th from 6-7 PM
The Gorton Center
400 East Illinois Rd.
Lake Forest, IL. 60045

Purchase your ticket here:

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04/10/2023

I'm happy to share I will be facilitating a live virtual event for National Business Institute (NBI) this coming January. Please save the date! More information to follow in the next few weeks.

03/09/2023

Lifetime Exclusion Expiration

The current Lifetime Exclusion for federal estate taxes is scheduled to expire on December 31, 2025 and will return to its pre- 2017 level of $5.5 million from the current $12.92 million as of January 1, 2026. It is not too soon to plan for this eventuality.

Some ideas to include in this plan are:
 Creation of intentionally defective grantor trust who which you sell and/or gift assets to your children and descendants
 Gifting to a spousal lifetime access trust
 If you own a business, a gift of fractional interests, either voting or nonvoting, to family members you believe are qualified to carry on the business after you retire or upon your death.
 Create a family limited liability company to which you transfer business or investment assets and gift fractional interests to family members.

There are a number of other ideas that may fit your needs and circumstances. If you would like to discuss your options with me, I shall be pleased to do so.
https://sohnlawfirm.com/

Don’t navigate the complexities of Estate Planning, Asset Protection and Privately Held Businesses law on your own; make life easy on yourself by having an experienced attorney in Chicago, IL do it for you

09/08/2023

Why a Trust-Third in a Series

Q. What are some of the benefits of a living trust?

A. Whether you are a member of Generation X, a baby boomer, approaching
retirement or have already retired, it is never too soon to set aside a little of one’s
valuable time to get one’s personal affairs in order.

If you have not already established a living trust, or have not reviewed
your trust(s) for over three 3 years, or if your family or financial circumstances
have undergone a substantive change, you should consider establishing or
amending your trust today.

If you have children, will they be able to manage large sums of money? If
they are married with children, would you want to be able to preserve those
assets for your children and grandchildren, and not have those assets diverted to
a divorcing spouse, or that spouse’s future spouse and children? If so, a living
trust can provide the protections you desire.

As you can see, the issues raised above, among others, should be addressed sooner rather than later, as one never knows what curveballs will be thrown at them. Better to prepare in advance to avoid striking out.

© Alan E. Sohn 2023