DGAA bLAWg

When Can a Trustee Be Held Personally Liable for Acts Done While Acting As a Trustee?

Web Admin - Tuesday, February 23, 2016

trustee held personally liable, Illinois Trust AttorneysAs a trustee, you are responsible for managing the trust and working with the beneficiaries. You have a fiduciary duty, or a legal obligation, to act solely in the interest of the beneficiaries by fulfilling the instructions of the trust as the trustor has required. A trustee must be respectful and careful, loyal, and impartial when serving as the trustee, and cannot take advantage of his or her trusted position to self-deal or glean benefits for him or herself from the trust. Developing a full understanding of what the legal obligations are as a trustee can be confusing, especially if you have limited legal experience dealing with trusts. An experienced estate planning and trusts lawyer at can assist you. 

A Breach of Fiduciary Duty Opens Trustees Up To Personal Liability

Trustees can be held personally liable for acts, or failures to act, as a trustee when the trustee does not carefully and diligently adhere to the trustee’s duties. When a trustee commits a breach of his or her fiduciary duty, the trustee opens him or herself up to liability for his or her actions taken while acting as the trustee. Examples where a trustee can be held personally liable for acts done while acting as a trustee include the following:

- A trustee may be held personally liable if there is a conflict of interest biasing the trustee’s judgment when it comes to the interests of the trust. Self-dealing, or making decisions or investments using the trust’s funds that in some way benefit the trustee either directly or indirectly will expose the trustee to liability;

- A trustee can be held personally liable for any interest and/or penalties that accrue for taxes filings that are made late. Liability exists because filing the appropriate tax forms on behalf of the trust is a responsibility that lies with the trustee. 

- A trustee could be held financially liable for losses on stock diversifications on behalf of the trust, or a failure to diversify, if losses are substantial. The trustee has an obligation to serve in the best interests of the trust beneficiaries, and failing to diversify when stocks are concentrated in a single company can lead to a significant loss in value of the trust. 

- A trustee can be held liable for commingling personal finances and the trust finances, especially in situations where the trustee is a family member to the beneficiaries. A trustee can avoid the appearance of impropriety by maintaining clear and thorough accounting records of the finances of the trust, and clear documentation regarding his or her personal finances. 

Speak with an Illinois Estate Planning Lawyer Today

If you have concerns that your trustee is in breach of his or her fiduciary duties, or if you are a trustee with concerns about a course of action for the trust you manage, please feel free to contact one of our experienced Illinois estate planning attorneys today. Our firm serves the communities of Inverness, Palatine, Schaumburg, Arlington Heights, Long Grove, Kenilworth, Riverwoods, Barrington, South Barrington, and Mount Prospect.

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.


Source: http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2129&ChapterID=61




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


Tags

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

Archive