(a) Except as provided in subsection (b), if any part of the principal consists of the right to receive periodic payments under an employment related contract or plan or an individual retirement account or annuity, the receipts therefrom shall be allocated to principal.
     (b) The receipts from any part of the principal consisting of the right to receive periodic payments under an employment related contract or plan or an individual retirement account or annuity shall be allocated to income (i) to the extent designated by the payor as current income for accounting purposes or (ii) if there is no designation by the payor and if the income is directed by the instrument to be paid to the surviving spouse of the participant under the contract or plan or of the owner of the account or annuity, to the extent of the minimum amount necessary each year to qualify the part in full for the federal estate tax marital deduction on the basis of the interest rate generally applicable for the valuation of annuities at the death of the participant or owner (or, if less, the entire receipts from the part for the year).
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Terms Used In Illinois Compiled Statutes 760 ILCS 15/12.1

  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Contract: A legal written agreement that becomes binding when signed.
  • individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See Illinois Compiled Statutes 5 ILCS 70/1.36
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Marital deduction: The deduction(s) that can be taken in the determination of gift and estate tax liabilities because of the existence of a marriage or marital relationship.
  • Surviving spouse: means "widow" or "widower" as the case may be. See Illinois Compiled Statutes 5 ILCS 70/1.32