New Illinois Statute Creates Presumption of Invalidity as to Transfers to Caregivers Over $20,000

A new section in the Illinois Probate Act, 755 ILCS 5/4-a, et seq., titled “Presumptively Void Transfers,” which took effect January 1, 2015, creates a rebuttable presumption that a document that transfers assets upon a person’s death, referred to as a “transfer instrument,” that transfers $20,000 or more to a caregiver is invalid. The intent of the new law is to deter caregivers from using their influence improperly. The new legislation shifts the burden to caregivers to prove by clear and convincing evidence that such a transfer was not the result of undue influence.

The statute has broad application since “caregiver” is defined as someone who, whether paid or unpaid, assumes responsibility for the care of another who needs assistance with activities of daily living. The definition also extends to the caregiver’s spouse, cohabitant, child, or employee. The definition specifically excludes family members of the decedent.

Once a transfer instrument is challenged, the caregiver may overcome the presumption in two ways: (i) by showing that the amount left to the caregiver in the transfer instrument is not more than the amount that was left to her before she became the decedent’s caregiver; or (ii) by proving by clear and convincing evidence that the transfer to the caregiver was not the product of fraud, duress, or undue influence. If the caregiver attempts and fails to overcome the challenge to the transfer instrument, the caregiver may then be held responsible for the costs of the proceedings, including reasonable attorney’s fees.

In light of the new law, careful estate planning is essential to memorialize the true intentions of the transferor to be able to rebut the presumption. For more information or to discuss specific questions or recommendations please contact the author of this alert or another of the attorneys listed below.

Horwood Marcus & Berk Chartered has a group of experienced estate planners and litigators that focus on trust and estate litigation. They represent trustees and beneficiaries in controversies relating to trusts and estates such as trust contests, will contests, accounting actions, petitions for instruction, undue influence claims, breach of fiduciary duty actions, as well as a wide range of other fiduciary litigation.