DO I REALLY NEED AN ESTATE PLAN?
A person does not have to be wealthy or elderly to do some serious thinking regarding estate planning. If you own a home or a car or have a checking or savings account, you have an estate. But no matter your net worth, it's important to have at least a basic estate plan in place. Such a plan ensures that your family is taken care of after your death. Dying without a will or trust (intestate) can be costly to your heirs and can leave you without a say in who inherits your assets. By putting your intentions in writing, you help avoid potential conflicts after you're gone.
If you don't create an estate plan, the State may make all decisions for you through the Probate Act in Probate Court. In that case, you lose the power to make those important decisions yourself and leave those decisions to a Probate judge.
During the probate process, the court determines who your “heirs” are, (a person who can inherit your assets under the Probate Act.) If you have minor children, they cannot directly inherit your assets. Instead, the court will assign a guardian of the minor child's estate (sometimes called a "conservator") who will “hold” the funds for the minor child until that child turns 18. This means the guardian (and the minor child) cannot use the funds without the court's approval. Once the child turns 18, all the remaining funds are usually turned over directly to the child.
The Probate court will also appoint a guardian who will care for your child on a daily basis, making the child's medical, educational and other everyday decisions. If you don't have a guardian nomination in place, a judge will determine who will act as guardian for your child. The court may not always choose the person who you would want to serve as guardian of your child to raise your child in the same manner as you would.
WHY DO PEOPLE WANT TO AVOID PROBATE?
While the probate process is not always bad, and in some cases can be beneficial, there are reasons to want to avoid the Probate Court First, it's costly and time-consuming. It often can take six to twelve months or more to probate even a simple estate. Your personal information and assets become part of the public record, which means anyone is able to see information about your family, including your young children. Plus, all decisions regarding your estate and minor children are left up to the court, not you. With a properly drafted estate plan, the decisions are all yours.
WHAT IS A TRUST?
Trusts are often the cornerstone of a properly-planned estate.
A trust is a legal arrangement whereby one person, called a trustee(s), holds legal title to property for another person(s), called a beneficiary. You can be the trustee of your own living trust, thus keeping full control over all the property in the trust. It can be amended or revoked by you during your lifetime.
There are many types of trusts. A revocable living trust is the kind of trust most people think of and by far the most popular choice. A revocable living trust is simply a trust you create while you are alive, rather than one that is created at your death. Living trusts can help you avoid probate, estate taxes or set up long-term property management, and as such, are one of the most popular estate-planning tools. The big advantage to a living trust is that property left through the trust usually does not have to go through the probate process. Probate can be lengthy and costly and most people try to avoid it. Assets you transfer into a living trust usually don't need to go through probate. The person you appoint in your living trust to handle your trust after your death (successor trustee) simply transfers the property in the trust to the beneficiaries you named in your trust. Holding property in a living trust requires some crucial documentation and it is best to consult with a qualified estate planning attorney to create your living trust.
HOW DO I PUT MY ASSETS INTO A TRUST?
The trust document itself is merely a shell into which you can place your assets. Once it is created, you must ensure that your assets are either owned by you as trustee of your trust (real estate, investment funds, bank accounts, etc.) or name the trust as a primary or contingent beneficiary of other assets. This means that you should transfer all your assets, like the title of your home, into the name of the trust or name the trust as the beneficiary of your various assets as soon as possible. Again, it is best to consult with a qualified estate planning attorney to properly "fund" your living trust.
DO I STILL NEED A WILL EVEN IF I HAVE A TRUST?
Yes, we recommend creating what is known as a "pour over will" to compliment your trust.
A pour over will is a particular type of will used in conjunction with a trust. This kind of will “pours” over any property the deceased still owned at the time of his or her death into the Trust that the person set up during his or her lifetime.
Some people intentionally choose not to put all their property into a Trust during their lifetime. Others merely forget to include everything in their Trust. If property is left out of the Trust, at the time of death it passes according to the probate laws. It will not pass to the Trust as the deceased may have intended. To avoid this situation, a pour over will should be created. It covers any property intentionally or accidentally left out of the Trust. By the terms of the pour over will, all the property the deceased owned at the time of his or her death is “caught” and “pours over” into the existing Trust. The property caught by the pour over will usually must be probated but will eventually be distributed according to the terms of the Trust. A pour over will is highly recommended to be used in conjunction with a trust.
HOW DO I APPOINT A GUARDIAN FOR MY MINOR CHILDREN?
When you have minor children, you can provide for their care by nominating someone to act as their guardian. You can also nominate someone to act as the conservator of their money. The guardian and conservator can be the same person. You can nominate a guardian through your will. A legal guardian is a person(s) who has legal authority (and the corresponding duty) to care for the personal interests of a minor child. The legal guardian can, but need not be a relative. In any event, the person(s) appointed as legal guardian should be someone who you can trust to raise and provide for your minor children as you would.
CAN I APPOINT A TEMPORARY GUARDIAN FOR MY MINOR CHILDREN WHO CAN ACT ON THEIR BEHALF IN CASE OF AN EMERGENCY?
You can designate a temporary guardian for your child on a short-term basis. This document, known as an Illinois Short-Term Guardian Form and is provided for under Illinois law. For example, parents sometimes appoint a short-term guardian if they are going to be away on a trip and need to leave their minor child with someone while they are gone.
A short-term guardian is responsible for the child for one year or less. The parent or guardian picks the short-term guardian. The parent or guardian does not need to go to court, but the agreement must be in writing. The agreement should also state, at a minimum, the dates that the short-term guardianship begins and ends.
The short-term guardian does not have to be related to the child. Your documented wishes will allow the short-term guardian to make medical, school-related and other important decisions for your child while you are out of town.
WHAT ESTATE PLANNING DECISIONS SHOULD I BE THINKING ABOUT?
Here are the two most important decisions that need to be given consideration:
1. If you have minor children, chose someone to act as guardian who will care for your children if something was to happen to you and your significant other. We recommend having at least one alternate person on that list in case the first person or couple is not able to act as the guardian(s).
2. Also, it's important to determine who you would like to handle your financial assets after you pass (administer your estate and often known as the executor, administrator or successor trustee). This person is named by the person creating the will and/or trust to administer the estate in accordance with the his/her/their wishes as detailed in the will and/or trust. An alternate person should be named in the event that your first choice is unable or unwilling to serve.
Estate Planning
• WILLS
• REVOCABLE LIVING TRUSTS
• CERTIFICATION/AFFIDAVIT OF TRUST
• TRUST FUNDING
• LIVING WILLS
• ADVANCED CARE DIRECTIVES
• HIPPA RELEASES
• POWER OF ATTORNEY FOR PROPERTY
• HEALTHCARE POWER OF ATTORNEY
• GUARDIAN NOMINATION FOR MINORS
• QUIT CLAIM DEEDS
• ATTORNEY FOR PERSONAL REPRESENTATIVES AND TRUSTEES
• CHARITABLE GIVING
• PRENUPTIAL AGREEMENTS
• ESTATE ADMINISTRATION
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