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

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

Archive