Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Saturday, April 5, 2014

Illinois Circuit Court Limits State's Ability to Tax Trusts Under Due Process


In Linn v. Department of Revenue, the Illinois Fourth District Appellate Court held an Illinois trust statute unconstitutional in violation of due process when the Illinois Department of Revenue attempted to tax a resident trust on retained income, when it was historically connected to Illinois, but presently connected to Texas. As James Cundiff and Mary Hallerman of McDermott Will & Emery write, the case was not appealed to the Illinois Supreme Court, and it is possible that it may be modified by additional cases or a change to the statute. However, present Illinois law on trust taxation, as determined in the Linn case, provides opportunities to modify resident trusts with limited contacts to Illinois so as to take advantage of the limits imposed by the case, and as well to seek potential redetermination of previously collected taxes. For further description of the case and the potential strategies that follow from it, see the cited article.

See James Cundiff and Mary Hallerman, Illinois Trust Taxation Deemed Unconstitutional, JDSupra, March 31, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.


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