Legal Question in Landlord & Tenant Law in Illinois

Is what legal? First, I would steer clear of the daughter's tax issues. Your primary concern should be that you are paying rent to the correct person. So if the lease was with her father and you know the father has passed away, at a minimum to collect rent she should confirm in writing that she is now entitled to collect rent, either for his estate, or for whoever succeeded in title to the house (including her), and that kind of confirmation would be a reasonable request to protect you, regardless of what she does with the rent money. If she is unwilling to do that, you have a choice: (a) continue to pay her and hope she is the correct person, but if someone shows up one day and says you should have been paying someone else, you may have a problem (especially if you are not getting rent receipts), or (b) ask for the confirmation and if you don't get it stop paying and if she is that sketchy risk eviction and/or non-renewal. On option (b) if you get an attorney involved one arrangement might be for you to pay the rent to the attorney to hold until she gives that confirmation, and that could also protect you somewhat against a retaliatory eviction. At the same time, if you put up a security deposit, the confirmation can include the fact that she will return it at the end of the lease if in fact she is now the landlord. So in the end, if she balks at giving you the confirmation you may need to protect yourself, your best bet would be to see an attorney, who can also review the lease, determine what else you might need in a confirmation, make the request for her, and also determine whether she may owe you any attorney fees for having to get someone involved.