Restrictions on Beneficiary Guidelines in Illinois

Beneficiaries violating Illinois beneficiary restrictions may lose their financial claim as beneficiaries.

Restrictions on beneficiary guidelines in Illinois allow beneficiaries to receive income, proceeds or benefits from insurance policies, annuities, pensions, company death benefits, stock bonuses, trusts or any other beneficiary designation listed under an account, contract or will. Many of the restrictions for beneficiaries are listed within the Illinois Probate Act of 1975. The act limits a beneficiary's personal interests and their legal involvement in their creation as beneficiaries; it also defines family beneficiaries, and outlines how beneficiaries may invalidate their status when receiving income, proceeds or benefits from another individual.

Beneficiary Qualifications

Illinois law limits beneficiaries on a number of personal levels, including acting as witnesses to the signing of wills or legacies where they are beneficiaries. Illinois also defines the role of beneficiary in relation to the grantor of beneficiary income, proceeds or benefits. The state will void any legacy or beneficiary interest if the beneficiary acts as witness without other "duly attested" witnesses who do not share an interest. Illinois law disallows anyone under 18 to be a beneficiary. Illinois Law also allows grantors to disqualify beneficiaries. The Illinois Supreme Court has upheld the grantor's right to include "Values-based estate planning" clauses within their wills. These clauses disqualify beneficiaries should they not meet certain moral-based criteria such as marrying outside their faith.

Business Beneficiaries

Illinois law prohibits attorneys, business partners or corporations from acting or receiving compensation for any legal activities involved in the creation or execution of any will, trust or other beneficiary legacy if they themselves are included as beneficiaries.

Family Beneficiaries

Illinois recognizes that not all families are within a marriage framework. Divorced spouses remain beneficiaries to each other until the grantor ex-spouse removes them. Illinois grants children born out of wedlock a beneficiary claim on parental assets. Illinois Law 755 ILCS 5 creates custodial beneficiaries from blood relatives when they have dedicated themselves to the care of a disabled person "by living with and personally caring for the disabled person" for a period of at least three years. Custodial beneficiaries can lay claim against the estate of a disabled person for up to $180,000.

Invalidating Beneficiaries

Illinois law will invalidate a beneficiary's claim when the person has fiscally abused or caused the death of another to receive any property, benefit or other financial interest from the crime's victim. A crime conviction must take place for the beneficiary invalidation to take effect.

References

• Merriam-Webster Dictionary: Beneficiary
• Illinois General Assembly: Illinois Compiled Statutes
• Illinois Department of Insurance: Frequently Asked Questions---Individual Life Insurance
• Illinois Law Review: Designated Beneficiary Agreements: A Step in the Right Direction for Unmarried Couples
• Illinois General Assembly: Probate Act of 1975
• Horwood Marcus & Berk Chartered: Life Insurance Litigation Post-Divorce: Easy to Avoid, Commonly Neglected; Lauren J. Wolven