Estate Planning Techniques

Heidi Scott is the owner of Schuyler Brown Land Title in Mt. Sterling, Illinois. An Illinois-based attorney, Heidi Scott is an expert at estate planning, tax law, and real estate.

Besides deciding the fate of your assets after death, estate planning also entails safeguarding your assets during your lifetime and resolving any potential issues that may arise in the future. When conducting estate planning, attorneys make use of several approaches.

Firstly, transferring a property to a trust for a defined number of years effectively avoids paying estate tax on a property. This trust is called a Qualified Personal Residence Trust. It allows you to give property without paying taxes while reclaiming possession later. The property’s gift tax value is often a fraction of what it would have been if the owner had retained it until death.

Similarly, a Family Limited Partnership allows people to bestow lifelong gifts without giving up control by assigning non-voting or limited partner shares in a family limited liability firm. These are essential family businesses that assist in decreasing estate taxes by lowering the amount of a person’s estate. As a bonus, gifts and assets delivered through these organizations are shielded from creditors.

Challenges Facing the Real Estate Industry

Heidi Scott is an Illinois-based attorney who served as the Illinois GBA’s President from July 2005 until June 2007. The owner of Schuyler Brown Land Title in Illinois, Heidi Scott specializes in estate planning, tax law, and real estate transactions.

With the current global economic instability, the real estate industry is faced with several challenges. The following are specific problems facing the industry that need solutions:

1. Expensive Housing

Rising building costs result in even costlier housing, making it increasingly difficult for individuals, especially Millennials, to find affordable housing in cities; West Coast cities such as Seattle and San Francisco are worse affected. According to data from CNBC, the current housing shortage could become the worst ever in the history of the United States. Real estate professionals will have to create more affordable housing solutions to bridge the increasing housing deficit for millions of Americans.

2. Deteriorating infrastructure

This is the critical challenge confronting the real estate business; according to data from APEX Commercial Group, critical infrastructure such as bridges and roads influence where businesses choose to build or relocate. When businesses decide not to invest in a specific area, private home buyers will also not move there because potential homeowners often base their decisions on dependable transportation, among other infrastructural needs.

3. Technological Innovations

The Counselors of Real Estate cited the lack of acceptance of modern technologies as the second most significant factor affecting the real estate business. The sector is failing to adapt to new technologies, such as innovative technology in homes and online applications that allow buyers to buy properties without using an agent.

Types of Freehold Estates

A longtime resident of Illinois, Heidi Scott has spent the last two decades as a tax attorney and certified public accountant specializing in real estate, tax law, and estate planning. She presently owns and manages Schuyler Brown Land Title and Heidi Scott Law Offices in Mt. Sterling, IL. She conducts real estate title examinations and prepares real estate deeds.

One of the two classifications of real estate, freehold estates, refers to real properties owned for an indefinite time. It is crucial to understand the classification a real property falls in its document before buying the estate as these could avoid future disputes. The following are three types of freehold estates:

1. Fee simple absolute

Sometimes called fee simple, a fee simple absolute gives its owner complete ownership without restriction. The individual can own these properties for life, and when they become deceased, the property will be transferred to their beneficiaries through will or law. The only way a fee simple absolute owner can lose the property is if they fail to pay required property taxes or satisfy other legal obligations about the estate.

2. Fee simple defeasible

Technically, a fee simple-defeasible is a form of fee simple absolute with some key modifications. The modification, in this case, is an extra restriction. This restriction can take any form. Often, it pertains to what they can use the property for. If they violate the rule, they may lose the property.

3. Life estate

Life estate owners have an ownership interest in the property as long as they are alive. Most life estate owners are the original owners of the property. While they are alive, they share responsibilities with another individual who will fully own the property after the original owner dies. These responsibilities include property taxes and insurance premiums. The original property owner, in this case, is the life tenant. Although this is not mandatory, the other party is the inheritor and could be related to the life tenant by blood (such as an heir).

35 ILCS 5/502 Innocent Spouse Relief

An experienced attorney and certified public accountant, Heidi Scott owns and operates her own private tax and estate practice in Mt. Sterling, Illinois. Before establishing this practice in 2008, she spent 15 years as a tax attorney with the Illinois Department of Revenue. One of Heidi Scott’s biggest achievements in the public sphere was instituting the 35 ILCS 5/502 law’s Innocent Spouse Relief provision into state statutes.

As defined by the Internal Revenue Service (IRS), “innocent spouse relief” provides taxpayers exceptions from tax payments, penalties, and other liabilities that arise from the negligent omission or improper reportage of tax document items on the behalf of a spouse or former spouse. Tax collectors can typically only garner these tax payments from the spouse or former spouse who is responsible for them. Specifically, Illinois’ 35 ILCS 5/502 provision offers innocent spouse relief protection to any state citizen who meets the standards for this relief as determined by the IRS and Section 6013(e) of the Internal Revenue Code.