LAW NOTES  

ATTORNEY ABIGAYLE J. ENDRESS JOINS FIRM

     We are pleased to announce that Attorney Abigayle (Abby) J. Endress joined our law firm effective August 1, 2023. Abby began working with Elliott, Trainor & Weller, P.C., in December of 2021, performing special projects for the firm throughout her second and third years of law school and clerking for the firm during the summer of 2022. She has already worked with many of our clients, and she is looking forward to serving the needs of both new and existing clients of the firm. 

      Abby grew up in Pearl City, Illinois, on her family’s beef, dairy, and grain farm. Abby received her Associate of Arts degree from Highland Community College. She went on to receive her Bachelor of Science degree in agricultural leadership, education, and communications from the University of Illinois in Urbana-Champaign.

      In May of 2023, she graduated from Drake University Law School with her Juris Doctor degree and a certificate in Food and Agriculture Law. While attending Drake, Abby taught an introductory legal course as a teaching assistant, worked as a student attorney in the legal clinic, and served as an officer in numerous organizations. She was also a member of the Drake Journal of Agricultural Law and was honored to have an article she authored published in the Fall 2022 edition.

      To date, Abby has had experience in many areas in which the firm practices, including agricultural matters, banking and financial matters, business matters, estate planning, and real estate transactions. She has completed internships with the Stephenson County Farm Bureau, Illinois Corn, Illinois Department of Agriculture, Compeer Financial, and United States Department of Agriculture. Through these internships, she gained experience advocating on behalf of others, drafting and reviewing legal documents, confirming compliance with state and federal regulations, securing collateral, and examining real estate records.

     Abby is excited to return to the Northwestern Illinois region. She is a member of the Stephenson County Farm Bureau, involved in the Highland Community College Mentor Program, and volunteers at the Pearl City Food Pantry. In her free time, she enjoys exploring restaurants and shops throughout the region and helping on her family’s farm. She is looking forward to reconnecting with members of the community and meeting new people by becoming involved with area organizations and attending local events.

Her email is aje@etwlawyers.com.

THE IMPORTANCE OF AGRICULTURAL SUCCESSION PLANNING TODAY

     Preparing a plan for the disposition of your assets upon your death may seem daunting or unnecessary; the thought of death isn’t pleasant. However, farm succession planning often begins on a happier note: retirement. Before reaching retirement, owners of farming operations should have a succession plan in place. Careful consideration of your retirement needs and your goals for your legacy will drive your succession planning. Perhaps you have a child who is interested in taking over the farming operation upon your retirement or, perhaps, you need a steady stream of income post-retirement, so you plan to cash rent your farmland. Whatever your situation, a succession plan will allow you to meet your post-retirement needs while preserving your family’s farm for future generations. Succession planning is beneficial for a variety of other reasons as well, including minimizing estate taxes, easing farm transition, distributing assets upon death, and preventing family conflicts.

     Having a plan in place is imperative for the success of the next generation because of the complexity of managing assets associated with a farming operation. The most important asset of many farming families is their land. Rising land prices indicate that land affordability and availability will continue to be a hurdle for future generations. By planning now, you can protect the land your family currently owns and create future opportunities for expansion. Land and other assets related to your farming operation can be strategically placed into succession planning tools, such as a will or living trust, and provide you with an opportunity to defer some federal and state estate tax consequences.

     Current federal and state estate exemption tax levels are at an all-time high; however, the federal estate tax exemption of $12.92 million is scheduled to sunset in 2025, meaning the current level could decrease, increase, or remain the same. If the value of your estate exceeds the exemption amount, your estate will be taxed at a rate of up to 40% on any amount over the limit. In Illinois, the current estate tax exemption is $4 million. While these numbers may not seem applicable to you now, climbing land and cash rent values could make reaching these estate tax thresholds closer than you think.

     Succession planning tools serve as a roadmap for your heirs as to how you want your property treated both during your life and upon your death. Your assets will be managed and divided as directed in your will or trust by whomever you select as your executor or trustee. Taking the time to develop an efficient and cost-effective estate plan may also significantly reduce estate administration costs by addressing potential conflicts at the planning stage instead of post-death.

     Many conflicts (e.g., deciding who will inherit the farm) may be avoided by having proactive discussions regarding the division of assets with family members or others who will take over the farming operation. While these conversations can be difficult, especially if some children will take over the farming operation while others will not, addressing any issues amongst heirs during your lifetime can decrease or even avoid conflicts down the road.

     Each individual or couple has different succession planning needs depending upon their goals and the type of assets they own. There are numerous succession planning tools available that can benefit your particular situation. Working with a qualified estate planning attorney to consider your current and future needs is essential to creating a succession plan that will benefit you, your spouse, and generations of your family to come. If you have any questions regarding farm succession planning, please contact an attorney for more information.

RECENT LAW CHANGES AFFECTING HOMEOWNERS, LANDLORDS, AND TENANTS

     Recent amendments to Illinois laws may have effects on homeowners, landlords, and tenants across the state. The Illinois Insurance Code was amended to prohibit homeowners’ and renters’ insurance policies from increasing premium rates based on a dog’s breed. Also, the Illinois Landlord and Tenant Act was amended to prohibit landlords from requiring a tenant to pay rent under a residential lease, renewal, or extension by electronic fund transfer.

     Effective June 9, 2023, the amended Illinois Insurance Code now prohibits insurers from refusing to issue or renew, cancel, charge, or impose an increased premium or rate for a policy or contract based upon the breed or mixture of breeds of a dog present in the home. Insurers are also prohibited from citing a dog’s breed as the reason for excluding, limiting, restricting, or reducing coverage under a policy. However, homeowners and renters should be aware that insurers may cancel or refuse a homeowner’s or renter’s insurance policy or raise premiums if a dog, regardless of breed, is determined to be dangerous or vicious under the Animal Control Act.

      In addition, beginning on January 1, 2024, landlords will be prohibited from requiring tenants to pay rent due under a residential lease, renewal, or extension by electronic funds transfer. Under the amended Illinois Landlord and Tenant Act, an “electronic funds transfer” is defined as payment by electronic means (such as credit card or automatic bank account withdrawal) as to cash, check, money order, or similar paper payment. An electronic funds transfer includes systems that automatically transfer funds on a regular, periodic, and recurring basis. Landlords should be aware that 90 days after the amendment takes effect, anyone found in violation of the Act will be deemed to have engaged in an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act.

     If you have questions regarding these amendments or any other homeowner or landlord/tenant matters, please do not hesitate to give us a call. We would be happy to assist you with these matters.

ATTORNEY WELLER ATTENDS  FARM BUREAU LEADERS TO WASHINGTON TRIP

     Whether Attorney Christina Weller is advocating for a client or advocating on behalf of an organization she is a part of, advocacy is a tremendous part of her life! In July, Christina participated in Leaders to Washington to advocate for issues currently affecting the agriculture industry. This was her second time participating in this program. As evidenced by the participation each year, she and many other young agriculturists believe in the value of this program.

     Leaders to Washington is a program that Illinois Farm Bureau developed to have its members meet with their representatives and senators, as well as various embassies, governmental agencies, and other groups in Washington D.C. They tell the stories of our local farmers, many of whom are our neighbors and friends, and discuss issues they are dealing with on their farms and in their communities. Christina developed a passion for agriculture at a young age by visiting her extended family’s dairy farms in central California. Christina joined FFA in high school and competed in prepared public speaking as well as several Career Development Events. Her passion for agriculture has influenced her career, as she helps farmers resolve legal issues and plan for the futures of their farms through succession planning.

     Each year, Leaders to Washington participants focus on various issues, both new and old. This year, the group focused heavily on advocating for the upcoming Farm Bill. Christina’s first day started off with the participants traveling to Washington D.C. On the morning of day two, the group met in the hotel to have briefings regarding current issues they wanted to discuss at their various meetings with representatives, senators, congressional staff, and others. During the afternoon, the group met with the Waterways Council regarding the repairs and building of locks and dams. In addition, the group met with President Biden’s senior advisor for public engagement, Will McIntee, at the Eisenhower Executive Office Building to advocate for the Farm Bill. The group also discussed Prop 12, trade agreements, and drought concerns affecting most of Illinois. On day three, the group traveled to the Capital. They spent the day meeting with their representatives and senators. Christina met with Eric Sorensen, her district house representative.

     Their last day was spent at the United States Department of Agriculture. They met with employees from the Farm Service Agency (FSA), Risk Management Agency (RMA), and Natural Resources Conservation Service (NRCS). The group acknowledged the positive contributions each organization has on the agriculture industry, but also gave ideas on ways each agency can improve and help with farmers’ concerns. For many of the group, the afternoon was spent traveling home.

     Leaders to Washington is not only educational, but the event heavily focuses on advocating by telling your story.  Please contact your county Farm Bureau manager regarding registration for this event or any additional questions.

ELECTRONIC SERVICE OF SUMMONS NOW AVAILABLE IN ILLINOIS

     On April 24, 2023, the Illinois Supreme Court expanded the forms of service of summons authorized under state law. Service of summons is important because this process ensures a person being sued by another receives the court-issued papers detailing who is suing them and the timeframe by which they need to respond to the suit.

     Now, summons may be served via social media, direct message, e-mail, or text message if the court approves the action by special order. Such service may be granted when traditional service of summons is impractical. To obtain a special order, the party asking for electronic service must file a motion with the court. The motion must include an affidavit that details the serving party’s belief that the electronic account or social media has recently been used by the adverse party to send or receive communications.

     The Illinois Supreme Court has put safeguards in place to ensure defendants and respondents receive service, including requiring a copy of the summons to be sent by mail to the last known physical address of the adverse party accompanied by a certification that the summons was mailed. However, Illinois citizens should be aware that they can now receive these important notifications of legal action in their email inboxes or social media direct message.

     If you have questions regarding proper service of summons or any related civil matter, please consider contacting an attorney.

2023 AGRICULTURE LAW UPDATES

Expanded Penalties for Illinois Pesticide Use

Resulting in Human Exposure

             Effective June 9, 2023, pesticide applicators should be aware that Illinois law has expanded penalties for pesticide use resulting in human exposure. Under the amended Illinois Pesticide Act, if fewer than 3 people are exposed, pesticide applicators will be fined a minimum of $500 per person. If 3-4 people are exposed, the fine increases to $750 per person. Human exposure of 5 or more people results in a fine of $1,250 per person. Fines occur in situations where application is inconsistent with the instructions provided on the pesticide label.

Tax Court Holds Farming Couple Cannot Claim Charitable Deduction for Contributions to Trust

     Farmers often elect to donate a portion of their crops to charity. One method of doing so is to donate crops to a charitable trust. The trust then sells the crops and purchases a type of investment that pays the donor regular annual income and distributes the remainder of the investment to charity. Under specific tax rules, the donor can claim a charitable deduction for the sale proceeds from the crops they donated to the charitable trust. However, a recent holding by the United States Tax Court may create a wrinkle in this regular charitable practice. The Tax Court held that a farming couple could not claim a charitable deduction for the contributions of crops they made to their charitable trusts. The crops in this particular case were classified as inventory, which did not qualify for the charitable deduction.

     The couple also tried to avoid paying taxes on the income they received from the investments held in the charitable trusts. However, such distributions to income beneficiaries of a trust are generally taxable at ordinary income rates. Therefore, the Tax Court ordered the couple to include the cash distributions they received as income for the following tax year.

     Tax consequences related to charitable trusts are complex. It is important that any tax related trust be properly drafted. Please contact an attorney with questions or concerns regarding establishing a trust or taxation issues related to trusts.  

New Illinois Law Promotes Agriculture Education

             Illinois students and parents of children involved in agricultural education programs have reason to celebrate this school year. Effective August 14, 2023, a new statewide school attendance policy no longer penalizes students for missing school to attend FFA and 4-H events. House Bill 3814 provides Illinois students with the opportunity to attend work-based learning events without negatively impacting students’ attendance records.

     The law amended the Illinois School Code to allow students who miss traditional classroom days for pre-approved events to count towards students’ overall attendance records. Eligible work-based activities include scheduled events in Illinois FFA associations, the National FFA Organization, and 4-H programs as part of organized competitions or exhibitions. Additional events may qualify.

However, parents and legal guardians of participating students should be aware that they are responsible for confirming approval of events prior to the student’s absence and obtaining the assignments a student misses.

ILLINOIS POWER OF ATTORNEY LEGAL UPDATES

     Careful consideration is important when selecting a loved one or friend to serve as an agent under a power of attorney because the agent owes legal duties to the principal, which include acting in the best interest of the principal and refraining from acting for the agent’s personal gain. A power of attorney is a written authorization for a designated person (also known as an agent) to act on behalf of the individual executing the authorization (also known as a principal). A power of attorney designation is often utilized for matters relating to business, health care, and property. The following amendment to the Illinois Power of Attorney Act and two Illinois court holdings involving powers of attorney highlight the importance of designating an agent you trust and the significance of the duties of an agent.

     First, beginning on January 1, 2024, the Illinois Power of Attorney Act will provide that principals and their loved ones cannot be prevented from seeing one another by an agent designated under a power of attorney. The amended Act recognizes the importance of visiting friends and family in the hospital, rehabilitation center, or nursing home. An agent who prevents an interested person from visiting the principal violates their legal duties and may have their agency revoked.

     Second, an Illinois appellate court recently held that a spouse designated as a power of attorney who engages in self-dealing is presumed to be exerting undue influence or engaging in fraud. In other words, a court may assume there is undue influence or fraud without any evidence in such cases. Prior to this recent case, Illinois courts generally have not held such a presumption applies to a spouse acting under a power of attorney. However, in the appellate court’s recent decision, the court noted the agent, who was designated under her late husband’s power of attorney for property, had engaged in numerous financial transactions solely for her own benefit. She also failed to keep an accurate record of the transactions she made while acting as agent. Her self-interested actions, combined with the principal’s declining mental capacity and the couple’s premarital agreement providing that she and the principal would keep their assets separate, factored into the court’s determination.

     Finally, a recent opinion from a judge presiding over a case in Northern Illinois illustrates the importance of designating a power of attorney for health care. In this case, a dispute over the disposition of the deceased principal’s remains arose between his son and his widow. The son argued he should control the disposition of the principal’s remains because he knew the principal’s burial wishes while the widow did not. In the end, the widow received control over the remains because she was named as the executor of the principal’s estate. The judge noted that if the principal had intended for his son to make decisions regarding the disposition of his remains, the principal could have designated his son through one of the methods available under Illinois law, such as executing a power of attorney for health care.

     By having powers of attorney in place, you can avoid conflicts from arising among loved ones and ensure your wishes are carried out. A complete discussion of laws related to powers of attorney is beyond the scope of this article. If you have any questions regarding these changes or any matters related to powers of attorney, please contact our office. 

   EXPANDED LIABILITY FOR IMPAIRED MINORS

     Effective January 1, 2024, the Drug or Alcohol Impaired Minor Responsibility Act expands liability to adults who “willfully” permit the consumption of liquor or illegal drugs to a person under the age of 18 that causes impairment on any premises owned or controlled by the adult.

     Adults who provide minors with alcohol or drugs that cause impairment are liable for death or injuries to people or damage to property that results from the impairment of the minor. Additionally, the Act now authorizes the surviving spouse and next of kin of a person whose death is caused by an impaired minor to bring their own cause of action against the adult who supplied the drugs or alcohol.

OFFICE NEWS

     Save the date for our upcoming Business After Hours on Thursday, April 18, 2024! We are excited to host the event from 5:00-7:00 P.M. at our law office, located at 1005 W. Loras Drive, Freeport, Illinois 61032. We look forward to seeing you there!

     Attorney Christina Weller, formerly known as Christina Willman, married Adam Weller of Mount Morris, Illinois, on April 22, 2023. The firm name has been changed to Elliott, Trainor & Weller, P.C.

     If you would like us to conduct a seminar regarding a legal practice area, please contact us at 815-233-1022.

     Please visit our website for past Newsletters and additional information about our firm at

https://www.etwlawyers.com/.

     LAW NOTES is a publication of Elliott, Trainor & Weller, P.C., which is distributed free of charge to our clients and local business friends to provide news about developments in the law which may be of use. Nothing contained in this publication shall be construed as creating an attorney-client relationship with Elliott, Trainor &Weller, P.C., nor shall the content of this publication be considered as legal advice.