Transfer on Death Instrument or Living Trust – Which One Should You Use?

Wheaton wills and trusts lawyersHistorically, estate planning has been overlooked by the non-wealthy. Times are changing, however. Retirees and even younger adults are starting to recognize the benefits of an effective estate plan – especially when there is a smaller estate. You see, probate can quickly eat away at the value of a moderate estate, which may lead to significant losses for beneficiaries. In situations where the only transferable item is real estate, the loss may even prevent the procurement of the asset.

Thankfully, there are some preventative strategies that you can use, including Transfer on Death Instruments (TODI) and living trusts. How do you decide which is most appropriate for your situation? The following explores these two solutions and explains where to find assistance with your Illinois estate planning needs.

Living Trusts

Revocable trusts (otherwise known as living trusts) are legal documents that authorize a trustee (beneficiary) to hold and manage the grantor’s assets before death. This authorization can be extremely beneficial for those suffering from a degenerative brain disease, or someone that is at risk for incapacitation. However, it can be used by anyone to avoid probate upon their death. It should also be noted that grantors still own their funds until death, and they can alter or revoke a living trust at any time (provided they are of sound mind).

Unfortunately, there are some limitations and concerns with living trusts. They must be funded, so they can be expensive to set up. It should also be noted that a single mistake – even a minor one – can invalidate the trust and cause the estate to go to probate. Living trusts do not replace a will either, and there may be confusion about what should go in a will and what should be designated to the trust.

Transfer on Death Instrument

A TODI deals only with the transfer of real estate, so it is not a comprehensive estate plan. However, they are less complex (and often less expensive) than a living trust, and they can still be altered or revoked (with a few exclusions). Still, there are some limitations and exclusions that one must be aware of before setting up a Transfer on Death Instrument. For example, a TODI can only be signed by someone of sound mind who is not under duress. A TODI must also comply with all deed requirements, and it must be registered in the county or counties where the property is located.

Contact Our DuPage County Estate Planning Lawyers

Because each situation is unique, it is crucial that estate planners seek experienced legal assistance before moving forward. The skilled DuPage County estate planning lawyers at Stock, Carlson, Oldfield & McGrath, LLC can help. Knowledgeable and dedicated to protecting your best interests and the interests of your heirs, we will examine your situation and then strive to develop a creative solution that works for you. Schedule a personalized consultation to learn more. Call 630-665-2500 today.

Sources:

http://www.bankrate.com/finance/estate-planning/living-revocable-trust-facts-1.aspx

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3382&ChapterID=60

Same-Sex Couples Still Face Some Unique Estate Planning Challenges

Illinois estate planning lawyersWhile most married couples can benefit from estate planning, it is not a hard or critical requirement. Most often, their assets would go to their spouse upon death, and minor children remain with the surviving parent, as long as the parent does not supersede them in death or die along with them. Even medical decisions are typically deferred to the spouse if one of them becomes incapacitated. Unfortunately, this is not always the case for same-sex married couples. Learn more about the challenges that same-sex couples face in estate planning, and what you can do to protect your family, with help from the following information.

Same-Sex Couple Estate Planning Challenges

Same-sex couples may experience numerous challenges in the event of death or incapacitation of one member. Families that refuse to accept the sexual orientation of their loved one may challenge the validity of a spouse’s inheritance; doctors may question the authenticity of a same-sex marriage, which can delay treatment; and even children may be temporarily removed from a loving parent if the validity of a same-sex marriage is questioned. In short, many potential areas can create post-death issues for surviving spouses in a same-sex marriage.

Why the Challenges Continue to Exist

Even though same-sex marriage is now legal in all 50 states, state laws continue to lag – some more so than others. For example, Illinois not only recognizes same-sex marriage, but it also protects the rights of same-sex couples when it comes to adoption. Same-sex couples are also treated the same as heterosexual couples, should they ever decide to divorce. Still, even in states like Illinois, it is crucial that same-sex couples protect their loved ones with an estate plan.

Protecting Your Family with an Estate Plan

Every married couple should have a will in place, but same-sex couples are encouraged to go beyond this basic estate planning document. A trust can reduce the risk of probate challenges, powers of attorney and living wills can reduce issues that may arise in the event of incapacitation, and adoption to ensure both parents are listed as legal guardians are ways that same-sex couples can protect their families from the possible challenges of same-sex estate planning.

For assistance with your estate plan, contact Stock, Carlson, Oldfield & McGrath, LLC. Our Wheaton estate planning lawyers are backed by over 40 years of legal experience, and we can work with you to develop creative solutions for your unique situation. Schedule a consultation with us by calling 630-665-2500 today.

Source:

https://www.usatoday.com/story/money/personalfinance/retirement/2017/06/17/estate-planning-more-complicated-same-sex-couples/102862578/

Pre-Planning in Estate Planning Can Protect Your Heirs from Probate Issues

DuPage County wills and trusts attorneysMost estate planners assume that having a will or living trust can keep their heirs from having to go through probate. Unfortunately, this is not always the case. There are numerous variables, potential oversights, and often confusing elements in the estate planning process. Any one of them can result in a need for probate. Learn more about how to reduce this risk with help from the following information.

Comparing Wills and Trusts

There are two basic methods used in estate planning: wills and trusts. Wills are an effective way to address guardianship issues, but they often increase the risk of probate because they can be challenged by family members. Living trusts are less likely to result in probate. Still, it is important to realize that a living trust does not eliminate the need for a will; almost no one disburses their entire estate through a living trust. Further, there may be elements in your estate plan that cannot be covered by a living trust.

Updating Your Beneficiaries

Couples marry, divorce, and then remarry. They have a child, and then maybe a few more. Family members pass away. In short, life changes. When it does, estate plans need updating. Beneficiaries need to be renamed or modified. Guardians may need to be altered or modified. Failure to do any of this can ultimately increase the risk of probate and may even lead to a loss of assets for a member of your family.

Using Payable and Transfer on Death

Payable-on-death and transfer-on-death accounts are one of the more effective strategies for reducing the overall risk of probate for your estate. They can be used to immediately transfer bank accounts, certificates of deposits, stocks, bonds, brokerage accounts, and other assets upon death. There are some limitations to these strategies, such as not being able to list an alternate beneficiary, so it is important to discuss your situation with an attorney to determine if this option may be appropriate for you.

Contact Our DuPage County Estate Planning Lawyers

If you are ready to start your estate plan, contact Stock, Carlson, Oldfield & McGrath, LLC. Our DuPage County estate planning lawyers are dedicated to your best interest and your family’s future. We will examine your situation, explain your options, and assist you with a creative estate plan that can address your needs and desires. To get started, schedule your personalized consultation. Call us at 630-665-2500 today.

Source:

http://www.chicagotribune.com/business/sns-201502032000–tms–savingsgctnzy-a20150203-20150203-story.html