Thursday, August 15, 2013

Probate and Estate Administration - FAQs

What is probate? A court procedure by which a will is proved to be valid or invalid. The term is now understood more broadly to include all matters that entail the administration of estates, guardianships, etc.

What are the advantages of having a will? There are least two advantages to having a will. One, you can give your property away as you want to; if you die without a will, a statute that is part of the Probate Act dictates how the property will be given away. Two, the cost of the premium of a surety bond can be avoided by stating in the will that the executor need not provide security for his/her bond.

What is an executor? A person named in a will to carry out the directions and requests set out in the will. When there is no will, the person who performs this work is called an administrator. The tasks are essentially the same: Open the estate, publish notice, collect the assets, pay the debts, distribute what's left (if anything) to the beneficiaries or the heirs, and close the estate.

Can probate be avoided? Yes, if the estate is small enough (gross value not more than $100,000.00) and some other requirements are met, then in lieu of probate, a so-called small estate affidavit can be prepared and submitted to those who have property of the decedent, and the bills can be paid and the remainder distributed without going through probate. Details about the affidavit appear at 755 ILCS 5/25-1.

What can I do if I am an heir and believe my interests are not being protected? You can ask the court for "supervised" administration of the estate, which would then require the executor or the administrator to seek and obtain the court's permission before taking any action of consequence.
Probate Resources

Sunday, August 11, 2013

The BIG Three

The value of a personal injury case - its "settlement value" and its "verdict value" - depends upon the extent to which it possesses three elements:

(1) clear-cut liability,
(2) big damages, and
(3) a solvent defendant.

Damages are of two types: special damages (e.g., medical expenses and lost earnings) and general damages (pain and suffering, disability, disfigurement). In this article the term "big damages" refers to special damages. We know of one case that settled for $6,000.00 although the special damages were confined to a doctor's bill of $25.00, but that almost certainly reflected a determination on the part of the defendant that it made more sense to pay to settle the case than to defend it. As a rule there is a closer correlation between special damages and settlement value. Or to put it another way, a case that entails a $500.00 bill for two-hour trip to the emergency room is not going to support a million-dollar settlement.

A case that possesses all three elements will look like this: Kathleen was a passenger in a car that had stopped for a red light on a clear, dry, sunlit day. A cement mixer owned and operated by a Fortune 500 company rammed into the back of her car. The car was totaled. Kathleen was knocked cold and suffered severe cuts to her face. She was brought by ambulance to a hospital, spent several days in the hospital, and followed up with her doctor on several subsequent occasions. The loss of consciousness implies the prospect of future complications, future medical expense, future pain and suffering. The facial cuts signal disfigurement. Kathleen was retired, and so lost wage was not an element of her case.

A lawsuit was filed. The defendant conducted basic discovery: served interrogatories, collected documents, and took the deposition of Kathleen. Then it invited her to mediation and the case settled for $70,000.00, ten times the amount of Kathleen's medical bills.

In that case, the defendant was solvent and well insured. The liability of the defendant was clear. There was no comparative fault on the part of Kathleen. The special damages were substantial and consisted entirely of readily provable medical expenses. 

Each case below represents a personal injury case lacking one or more of these ingredients:

Case 1: A case recently brought to our attention entailed an attack upon a young man in a parade by a spectator. Liability was clear enough: The unprovoked attack occurred in the presence of many witnesses and produced an arrest. But the would-be defendant was barely employed and uninsured. As for the potential plaintiff, he suffered a facial cut that required four or five stitches, was treated and released from the emergency room, and was looking at a follow-up visit or two with the family doctor. (Lacks big damages and solvent defendant.)

Case 2: Some years ago, a client we will identify as Samantha, a single, attractive, twenty something woman suffered severe facial cuts when she went through the windshield of a car when the driver lost control. He had minimum insurance coverage and no prospects. His insurer quickly offered the limits of his policy, and the adjuster openly acknowledged that those limits fell far short of full compensation. But the driver had no other assets of consequence and the obligation of his insurance company was capped at the limits of his insurance. (Lacks solvent defendant.)

Case 3: A plaintiff who suffered a career-ending knee injury in a truck jackknife attributed the occurrence to faulty brakes on the tractor he was driving and the trailer he was pulling. His co-driver had left this area and taken up residence in a god forsaken corner of a far-away state. But we found him. And we took a statement from him. By his account, there was nothing wrong with the brakes. It was all about black ice. The settlement demand plunged by ninety percent. (Lacks clear-cut liability.)

Monday, June 17, 2013

Don't Assume Anything

Another example of a personal injury case that seems absurd at first glance but makes sense upon reflection: Some time back reports were published about a personal injury case against a school board and the driver of a school bus following an injury to a grammar school student who was hit by a car while crossing the street on his way home from school after getting off the bus. The driver of the car that hit the child was sued, too, but had nothing to do with the school board or the driver of the bus.

So where do the school board the bus driver fit in to this story?

Once the child left the bus, he had to cross the street to get home, and the driver of the bus had a duty to avoid striking the child with the bus, of course, but no duty to assist the child to get across the street. As it happens, the child chose to cross the street in front of the bus, and the driver of the bus waved the child across. The child passed safely in front of the bus but was struck by a car traveling in the next lane. As noted, the bus driver was under no duty to guide and direct the child across the street, but the driver assumed the duty by waving the child across. Once the duty was assumed, the driver was obligated to carry it out with care under pain of liability for negligence on the part of the driver and its principal, the school board.

This subject, liability for negligent performance of an assumed duty, often appears in the context of trips, slips, and falls in snowy and icy places. Landowners are not liable for injuries attributable to natural accumulations of snow and ice. But once they undertake to shovel and plow the ice and snow, they must discharge the duty with care under pain of liability for negligence.

Tuesday, March 26, 2013


No question is asked of us more frequently than this question: Can I charge my opponent for my legal fees?

In general, the answer is no: Each party bears and pays his or her own litigation expenses, including attorney's fees. This is known as the "American Rule," as distinct from the "English Rule" -- Loser pays. (The "English Rule" drove the playwright Oscar Wilde into bankruptcy following his failed lawsuit for libel against the Marquess of Queensberry.)

There are exceptions to the "American Rule" when the case entails a contract that calls for fee-shifting, such as an apartment lease, or a statute that does so, such as Title VII of the Civil Rights Act.

A bill now pending in the Illinois Senate would permit fee-shifting in favor of defendants who prevail in lawsuits brought against them in small claims court for enforcement of consumer contracts if the complaint prays for an award of fees in favor of the plaintiff and the defendant was not represented by an attorney when the consumer contract was negotiated. (Senate Bill 1901, Consumer Reciprocal Attorney's Fees Act, sponsor: Sen. Daniel Biss, Skokie).

Other examples of contracts that contain fee-shiftings clauses are potentially infinite. One that stands out was used by a general contractor for its subcontracts. It provided that the litigation expense (including attorney's fees) of the general contractor would be borne and paid by a subcontractor who sued and recovered less than 75 percent of the amount claimed due in the initial complaint.

Statutes which contain fee-shifting clauses include:

Thursday, February 21, 2013

Outrageous Personal Injury Claims?

Personal injury cases often garner press coverage that focuses on the absurdity of the justice system, from the McDonald's hot coffee lawsuit to the seemingly bizarre tale of a suicidal person suing the subway for not stopping the train. There is always another side to the story.

Read on.

Quite an uproar about abuse of the tort system was excited some time back by a personal injury lawsuit on the part of a man who was struck by a subway train after he deliberately lay down on the tracks.


Not when you know that the train barreled into the station at full speed even though the operator had been informed of the situation in time to bring the train to a halt without danger to his passengers or to the man on the tracks. The operator had a duty to conduct himself with reasonable care. That duty was not diminished or eliminated by the fact that

If you have been involved in a personal injury, it's important to examine the whole case. the plaintiff had put himself on the tracks on purpose. The operator had ample time to bring the train safely to a halt. He did nothing to avoid contact with the man on the tracks. Result? Liability.

Consider the issue from the opposite direction.

A visitor to a hospital who slipped and fell on a wet spot in its cafeteria erroneously assumed that the hospital was liable just because it owned the building.

Not so.

Unless the hospital created the hazard, the liability case against it would entail a failure to act reasonably to remedy the hazard in the face of actual or "constructive" knowledge of it: If in the exercise of ordinary care a reasonable person would have known of the hazard, the lack of actual knowledge will not operate as a defense.

Friday, February 8, 2013

FAQs About Trusts

Is property in trust beyond the reach of creditors of the beneficiary of the trust?
As a rule property held in a spendthrift trust for the benefit of a judgment debtor is beyond the reach of the creditors if the trust was created and funded in good faith by a person other than the debtor. The rule does not apply when the trust is so set up or funded as to hinder, delay, or defraud creditors. Nor does it apply when the debtor created the trust for the debtor's own benefit: Put another way, a "self-settled" trust is invalid as a spendthrift trust in Illinois. And even a legitimate spendthrift trust is liable for the unpaid child support obligations of a beneficiary-debtor. Are there tax benefits to trusts.

Are there tax benefits to trusts?

Transferring property into trust does not make tax obligations disappear. Income generated by trust assets will be taxable to the trust, to the person who created it (known as the settlor or the grantor), to the beneficiary, or to some combination thereof. Any doubt that many people have erroneously thought otherwise over time is dispelled by the treatment which the Internal Revenue Service has given to this subject. (See "Abusive Trust Arrangements" in 2011 Instructions for Form 1041 at p. 3).

In theory, trusts are subject to other taxes, too, among them the so-called "death taxes" and "inheritance taxes." In practice, those taxes are relevant only to the few: the current exemptions are $5.25 million in the case of the federal estate tax, gift tax, and generation-skipping transfer tax; $4 million for the Illinois estate tax; and double that for married couples.
There are many good reasons for establishing a trust, but they do not have much to offer in terms of reducing or eliminating income tax liability.

Why should I create a trust?
One good thing a trust can do is reduce or eliminate the risk of guardianship proceedings. In a typical "living trust" the settlor will designate himself or herself the trustee, and will designate a successor trustee in case he/she dies or becomes disabled. Should the initial trustee become disabled, a simple resignation is all it would take to put the "back-up" trustee in charge; and the fees, the paperwork, the trips to court, the delay and all the rest of what goes into obtaining a guardian of the estate could be avoided.