Homestead Rights in Illinois

Web Admin - Thursday, October 23, 2014

homestead rights in Illinois, Palatine estate planning lawyerWhile there are many well known government programs and policies designed to provide relief during difficult economic times, there are other laws people can take advantage of that are less commonly talked about. One of these laws is known as “homestead rights.” Homestead rights are a protection provided by Illinois law that provide certain immunities from debt collection efforts by creditors. However, these immunities are not absolute, so it is important for people exercising their homestead rights to understand the exact limitations of those rights.

What Homestead Rights Are

Homestead rights are a statutory protection against creditors designed to help people avoid becoming homeless because of changing economic circumstances. The rights allow the debtor to exempt $15,000 worth of real estate from the collection efforts of creditors or their agents. Additionally, if a married couple owns the home, then they can pool their homestead rights together to protect the same house. This gives them an exemption of $30,000. This exemption also survives the death or desertion of a spouse. The exemption can also be passed down to the children of the married couple, at least until the youngest child turns 18.

Illinois' homestead laws are also slightly different than the laws in some other states. Many states choose to restrict the amount of acreage that a person can use the homestead exemption on in addition to capping the total value of the property. Illinois has no such acreage cap. This means that the size of the property is irrelevant to the homestead rights, and that it is purely an issue of how much the land is worth.

What Homestead Rights Do Not Protect

Notably, homestead rights do not provide absolute protection against every type of creditor. For instance, the state legislature wrote an exception into the protection for the purposes of state taxes, so if the creditor is the state of Illinois then the exemption does not apply. Similarly, homestead rights are created by state law, which federal law can supersede, so they provide no protection against the federal government's collecting taxes either. The rights also do not function in many circumstances where the money owed is related to the property itself. A person who uses the house as collateral for a mortgage does not get protection if their home is being foreclosed. Additionally, if the person owes money to contractors for doing work on the home, then the homestead rights do not apply to those debts. Further, the homestead rights can be signed away in writing, which would also remove their protection.

If you have questions about your homestead rights or some other property interest, talk to an experienced Palatine, Illinois estate planning attorney today. Our firm helps clients in many northwest suburban towns including Barrington, Long Grove, and Arlington Heights.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Trust Payments and the Capital Gains Tax

Web Admin - Wednesday, August 27, 2014

capital gains tax in IllinoisThe capital gains tax exists as a way for the government to tax the income that flows to investors from certain investments. In general, the capital gains tax applies to the sale of most assets other than inventory. This includes the sale of things like stocks, bonds, and real estate. The current capital gains tax rates vary depending on a person's income bracket. According to the IRS, the capital gains tax for people in the 25 percent, 28, percent, 33 percent, and 35 percent income tax brackets would be 15 percent.

People paying taxes in the highest bracket, 39.6 percent, would pay 20 percent in capital gains tax, and people in the other, lower tax brackets do not pay capital gains tax at all for most capital gains income. Additionally, the Affordable Care Act also introduced a further 3.8 percent tax on capital gains income for people earning either $200,000 a year as single filers, or $250,000 a year as married filers, which went into effect at the start of 2013.

This capital gains tax can interact with trusts in complex ways, and trustees should be aware of the issues created by the capital gains tax and trusts. First, trustees should be aware of how capital gains affects the way that they manage K-1 tax forms. Second, trustees should keep in mind the interaction between capital gains and the income distribution tax deduction that trusts are allowed to take.

K-1 Forms

K-1 forms are a type of tax form that exists to help the owners of pass through entities fill out their personal income tax returns. Pass through entities are entities like S corporations and some LLCs that do not pay taxes themselves, but instead pass the taxes on to the owners. Trusts, strictly speaking, are not actually pass through entities since the trust is responsible for paying some taxes, but the beneficiaries may also owe taxes based on distributions to them from the trust, so they often receive a K-1 form. As far as the need to report capital gains income on a K-1 form, that depends on the specifics of the trust. As a default rule, the capital gains and losses stay with the trust itself, but the trust instrument may choose to pass those along to the beneficiaries, which would result in the trustee needing to add them to the K-1 form.

Capital Gains and the Income Distribution Deduction

Capital gains may also have an effect on the trust's income distribution deduction, a tax deduction that trusts may take for amounts paid to an income beneficiary. The income distribution deduction is equal to the lesser of either (1) the distributions minus tax-exempt income or (2) the “distributable net income” minus tax exempt income. Capital gains may affect this distribution because it figures into the calculation of distributable net income under several circumstances, most commonly if the trust requires the trustee to distribute the gains to the beneficiaries.

Managing a trust is a complex task from both a legal and financial perspective. If you have questions, seek help from an experienced Illinois estate planning attorney. Our firm's skilled lawyers serve clients in many northwest suburban towns such as Inverness, Barrington, and Kenilworth.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Recent Posts


Palatine drug lawyer Chicago biking tips Kenilworth estate planning attorney Do Not Resuscitate car collision estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, DNR trucking accidents small business medical research Deer Park personal injury lawyer construction accidents insurance claims social media after death residential real estate drunk driving statistics Des Plaines real estate lawyer Barrington employment law attorney insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys llinois Real Estate Lawyers Association Inverness DUI lawyer underinsured motorist field sobriety test involuntary manslaughter breach of contract Illinois Wage Payment and Collection Act Chicago insurance law firm Palatine criminal defense lawyer Home Remodeling Repair Act Illinois home inspection Chicago corporate attorney Mount Prospect elder law attorney unauthorized overtime insurance negligence startup company Deer Park employment law attorney personal injury attorney pain and suffering forming a corporation in Illinois living trust benefits marijuana crimes attorney life insurance Chicago attorney Employment Discrimination Law Long Grove estate planning attorneys Crystal Lake civil litigation lawyer consent to a search hands free device Schaumburg corporate attorney Illinois workers compensation lawyer Rolling Meadows employment law attorney sexual images uninsured motorist Inverness elder law lawyer Rolling Meadows marijuana attorney Illinois traffic attorney Illinois wrongful termination lawyer elder law Exclusions healthcare claims traffic accidents Illinois personal injury lawyers Des Plaines real estate attorney controlled substance senior citizens Landlord Tenant Ordinance drug crime Palatine real estate lawyer Home Sale Contingencies Chicago traffic lawyer Arlington Heights wills and trusts attorneys corporate law Palatine Attorney probate power of attorney for healthcare home inspection lawyer employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, South Barrington real estate attorney Crystal Lake pet attorney Illinois employee rights attorney. Illinois insurance lawyer foreclosed rental property car accident lawyers Illinois insurance claim dispute lawyer Arlington Heights criminal lawyer Crystal Lake medical malpractice attorneys Illinois collections attorney traffic violations digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Arlington Heights insurance attorney murder charges loopholes Barrington estate planning attorney Mount Prospect real estate lawyer Crystal Lake employment attorney boating under the influence Crystal Lake car accident attorney federal regulations for LLCs PTSD natural gas explosion texting while driving suspended license Arlington Heights lawyer investment property trench injuries ken apicella paid sick leave Des Plaines personal injury attorney Illinois workers compensation attorney license suspension Illinois personal injury lawyer Affordable Care Act Crystal Lake traffic lawyer Buffalo Grove traffic lawyers accidental death benefits Mt Prospect Attorney pregnant women Des Plaines DUI attorney Barrington criminal lawyer eluding a police officer attorney fees irrevocable trust Des Plaines brain injury School Visitation Rights Act revenge porn Barrington Traffic Lawyer Rolling Meadows traffic attorney Chicago employment attorney probate process defective products Deer Park DUI lawyer Chicago will attorney Illinois attorney Illinois business law atorneys Federal Food Drug and Cosmetic Act reckless homicide holiday statistics traffic deaths ACA DUI Rolling Meadows DUI lawyer license reinstatement Des Plaines personal injury lawyer Barrington medical malpractice lawyers jet ski Des Plaines pet law attorney Illinois will lawyer pet law Illinois registered agent Buffalo Grove probate lawyer Arlington Heights Traffic Lawyer life insurance policy pedestrian accident drug possession slip and fall accidents Palatine civil litigation lawyer Rolling Meadows traffic law firm Des Plaines motorcycle accident attorney Illinois Probate Act of 1975 Barrington boating accident attorney Palatine corporate attorney Crystal Lake tax lawyer Schaumburg employment law attorneys power of attorney preventable medical errors vacation home trust payments Illinois boating accident lawyer special needs trust new real estate form Schaumburg personal injury attorney Class A misdemeanor Deer Park criminal attorney trusts real estate Attorney Ken Apicella civil litigation denial of life insurance medical malpractice Illinois corporate lawyer CAM car accident lawyer commercial leases motorcycle accident lawyer Buffalo Grove medical malpractice lawyers Palatine trusts lawyer probate claims process Inverness accident lawyer Illinois living will Arlington Heights employment attorney Super Mario car accidents IRS life insurance claims Crystal Lake personal injury lawyer Riverwoods estate planning lawyer estate planning real estate lawyer changes to mortgage law Palatine probate lawyer Illinois pet lawyer traffic crimes tax attorney Deer Park medical malpractice attorney criminal law Schaumburg insurance lawyers Barrington personal injury attorney blended families minimum wage employee rights wills and trusts Rolling Meadows criminal lawyer Inverness traffic law firm Rolling Meadows accident lawyer criminal Crystal Lake will lawyer real estate contract personal injury accidents texting and driving Chicago will attorney, social media platforms, Illinois estate planning lawyer, construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation probate fees unpaid assessment no contest clauses Illinois Sales Representative Act Joliet general practice lawyers crossover accidents Crystal Lake personal injury attorney pizza emoji bad faith insurance claims Barrington workers compensation attorney Crystal Lake car accident lawyer boating DUI ObamaCare Des Plaines insurance attorney Rolling Meadows tax attorney Rolling Meadows insurance lawyer insurance dispute pedestrian injuries, pedestrian fatality underfunded trust rollover accidents Long Grove estate planning Schaumburg criminal attorney employees BAC Illinois employment law firm Palatine traffic accidents Palatine insurance lawyer loss of consortium insurance agent negligence slip and fall independent contractor federal crimes Fair Labor Standards Act Deer Park real estate law firm Rolling Meadows medical malpractice lawyers civil litigation attorney Des Plaines civil attorney Schaumburg criminal law attorney traffic tickets employment attorney Arlington Heights wills and trusts lawyer Transfer on Death Instrument Illinois motorcycle accident lawyer POA traumatic brain injury license Arlington Heights personal injury attorney landlord tenant law liability Illinois traffic accident lawyer Rolling Meadows Traffic Lawyer Arlington Heights car accident lawyer personal injury lawyer product liability underage DUI Des Plaines tax law firm Illinois injury lawyer Crystal Lake employment law attorney spinal cord injury premises liability Arlington Heights injury attorney estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers drunk driving Palatine workers compensation lawyer right to work landlord FMLA traffic violations defense overtime pay unfunded trust Buffalo Grove real estate attorney motorcycle accident Illinois personal injury attorney Des Plaines drug crimes lawyer Buffalo Grove law firm deed transfer cell phone Des Plaines criminal attorney Inverness real estate lawyer bicycle dooring accidents living trust Arlington Heights TBI attorney insurance adjusters Arlington Heights wills and trusts lawyers employment contract Barrington employment attorney fiduciary rule employment law, Illinois employment laws speeding Palatine personal injury lawyer surgical mistakes sexual harassment pet bites Illinois defective products attorney insurance claim denials IRA benefits Illinois civil litigation lawyer Crystal Lake criminal defense attorney Des Plaines collections attorney boating accidents estate attorney Des Plaines drug lawyer Crystal Lake injury attorney Schaumburg Attorney Illinois employment law attorney hiring employees manufacturing Barrington civil litigation attorney Illinois medical malpractice claim Liquor Control Act Illinois employment law attorneys distracted driving accidents Illinois employment lawyer criminal record elder abuse Kenilworth estate planning lawyer child safety Arlington Heights traffic attorney employee discrimination hit and run accident insurance agents Illinois pedestrian accident attorney wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace trauma after an accident insurance claim dispute nursing home negligence wills Chicago insurance claim attorneys Rolling Meadows Attorney Rolling Meadows insurance dispute lawyers, insurance dispute Des Plaines personal injury lawyers insurance denials Schaumburg estate planning lawyer estate plan living trust vs will Schaumburg drug defense lawyer Chicago trucking accident attorney dynasty trusts Rolling Meadows business lawyer Palatine injury attorney Arlington Heights Attorney Buffalo Grove traffic attorney Illinois red light cameras automated cars Rolling Meadows car accident lawyers Palatine employment lawyer FSLA insurance claim denial disability benefits estate planning trusts Illinois job attorney Rolling Meadows Rolling Meadows personal injury attorney Rolling Meadows criminal attorney Schaumburg probate attorney Des Plaines Traffic Lawyer real estate attorneys Palatine construction attorney work unions Illinois real estate lawyer traffic laws Illinois workplace lawyer natural gas Crystal Lake pedestrian accident lawyer license revocation first degree murder health insurance dispute Inverness personal injury attorney insurance denial appeals Schaumburg construction accident lawyer condo driving Long Grove wills and trusts attorneys Arlington Heights medical malpractice lawyer Inverness probate lawyer Illinois LLC creation financial advisors rest breaks Schaumburg personal injury lawyers IRELA Rolling Meadows probate lawyer dram shop law clemency jet ski accidents gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys mortgage Crystal Lake insurance lawyer Illinois traffic attorneys estate planning for college students Schaumburg traffic lawyer Illinois wills and trusts filing a medical malpractice claim advance healthcare directive Palatine punch death Deer Park traffic lawyer personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys Buffalo Grove personal injury attorney Illinois tax attorney Barrington Illinois estate planning lawyer insurance attorney workers compensation benefits Illinois employment laws Schaumburg real estate lawyer bicycle accidents workplace sexual harassment Illinois estate planning attorney drug crimes lawyer in terrorem provision agent Schaumburg estate planning attorney Crystal Lake bike accident lawyer auto accidents real estate attorney LLCs estate tax Rolling Meadows boating crash lawyer internet Arlington Heights real estate lawyer icy parking lots wrongful termination Palatine law firm spinal cord injuries workers compensation back injuries Illinois construction accident attorney creditors Des Plaines injury law firm anesthesia errors estate planning attorney fatal car accidents products liability liens Arlington Heights tax lawyer car crash injuries unpaid overtime denied insurance claim Inverness insurance attorney problem employees trustee Illinois estate planning law firm employment law Rolling Meadows real estate attorney Palatine employment attorney dog bites BAIID breathalyzer test rollover car crashes Colin H. Gilbert medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers Illinois law Illinois insurance claim dispute lawyers Whistleblower Claims Palatine civil attorney Retaliatory Discharge insurance disputes Illinois probate lawyer Crystal Lake estate planning lawyer personal injury claims appealing an insurance claim Schaumburg wrongful death attorney Illinois employment attorneys car accident Illinois speeding lawyer DUI attorney bike accident Illinois bicycle safety drugs Buffalo Grove employment lawyer Colin Gilbert personal injury law firm insurance dispute attorney Forcible Entry cell phone tower data Barrington real estate lawyer Rolling Meadows estate planning attorney cell phone accidents denied insurance claims pedestrian-automobile accident Illinois car accident attorney Illinois medical malpractice attorney healthcare Rolling Meadows personal injury lawyers Crystal Lake traffic attorney mass shooting Food and Drug Administration's Food Safety Modernization Act living wills Schaumburg car accident attorney Illinois medical malpractice lawyers Illinois criminal defense attorney Illinois driving without license Illinois employment law Crystal Lake accident attorney digital evidence Des Plaines claims law firm probate claims Mount Prospect wills and trusts lawyers Palatine corporate law attorneys Schaumburg estate attorney Rolling Meadows personal injury lawyer compensatory time Arlington Heights car crash attorneys Buffalo Grove car accident lawyer insurance claim dispute attorney Illinois traffic ticket lawyer IRA trust transfer wage theft Palatine elder law attorney Illinois rollover accident lawyers meal breaks personal injury claim Deer Park motorcycle accident lawyer fault based insurance wrongful death pedestrian accidents blood alcohol content Fourth of July Long Grove estate planning attorney Palatine traffic lawyer digital media accounts, estate planning, Arlington Heights estate planning attorney, life insurance lawyer Illinois Human Rights Act medical malpractice compensation job lawyers Chicago car accident lawyer Crystal Lake medical malpractice law firm expungement owner responsibility fiduciary rule delay Schaumburg Barrington litigation attorney institutional trustee Family Medical Leave Act traffic offenses insurance claim Long Grove real estate lawyer Illinois elder law attorney car crash operating agreements Arlington Heights personal injury lawyer real estate zoning sole proprietorship overtime violations Illinois Workers’ Compensation Commission medical marijuana Rolling Meadows corporate lawyer business litigation Jay Andrew truck collisions Self-Directed IRA Accounts distracted driving accident victims Illinois insurance claim attorney vacation home fines Palatine estate planning lawyer Illinois jet ski accident lawyer severance agreements Illinois personal injury deadly crashes workers comp Des Plaines medical malpractice attorney digital information Illinois insurance attorney traumatic brain injuries Barrington criminal defense lawyer college kids DMV Illinois lawyer gift taxes Palatine business attorney Des Plaines accident attorney Inverness civil lawyer South Barrington real estate lawyer employee misclassification privacy laws Barrington injury attorney Arlington Heights accident attorney Rolling Meadows litigation lawyer Schaumburg employment attorney Illinois estate planning Buffalo Grove corporate attorney murder Barrington business law firm Illinois trusts attorney Illinois Transfer on Death Instrument Schaumburg personal injury lawyer marijuana Arlington Heights trucking lawyer Chicago estate planning lawyer Inverness estate planning lawyer income distribution deducation personal injury homestead rights privacy dealing with problem employees taxes capital gains tax trucking accident lawyers Illinois trucking safety Chicago estate planning medication errors Detainer Actions Barrington drug crime attorney Illinois Buffalo Grove personal injury lawyer Buffalo Grove injury lawyer probate lawyer Barrington employment law firm Illinois workplace discrimination attorney head on collisions whistleblower protections murder defense caretaker rights Schaumburg medical malpractice lawyer Rolling Meadows employment attorney Crystal Lake law firm low-ball insurance settlement GM ignition switches Policy Cancellation Buffalo Grove criminal defense lawyer digital assets installment contracts condo association commercial real estate Arlington Heights employment law attorneys Rolling Meadows drug defense attorney real estate leasing rumble strips Rolling Meadows insurance dispute lawyers defective products lawyer Crystal Lake medical malpractice lawyer Schaumburg elder law lawyer Deer Park accident attorney Illinois small business Inverness injury lawyer rent to own real estate contracts car crashes Arlington Heights pedestrian accidents Kenilworth estate planning attorneys Thanksgiving TBI Chicago employment lawyer preventing accidents Illinois DUI attorney commercial leasing DGAA golf accidents Illinois business lawyer Schaumburg injury lawyer liability claims Deer Park traffic accident attorney DUI defense employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys Illinois insurance claims lawyers Rolling Meadows employment law attorneys food poisoning Illinois traffic laws Illinois wills and trusts attorneys foreclosure drug crimes Palatine employment law lawyer medical malpractice claims insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys comp time guardianship attorney real estate closing Illinois Smoke Detector Act Barrington attorney Chicago lawyer Long Grove real estate attorney Inverness real estate attorney caregiver modern family estate planning Inverness corporate attorney Crystal Lake business law attorneys Deer Park workers compensation lawyer Illinois medical malpractice case Illinois mortgages BUI Rolling Meadows insurance attorney Crystal Lake employment lawyer swimming pools Illinois insurance disputes Barrington estate planning lawyer civil rights violation Crystal lake insurance dispute attorney Buffalo Grove insurance claim dispute lawyers insurance claim delay Schaumburg civil litigation attorney Barrington personal injury lawyer criminal defense Arlington Heights estate planning attorney Illinois real estate Illinois insurance dispute lawyers estate planning lawyer employment lawyer Arlington Heights wills and trusts attorney Legal Info DUI penalities