Everyone knows that they must get a will before it is too late. Those who know better know that a will alone is simply not enough. It is true that having a proper will is an important tool in preparing for death, but it is only one in a set of tools that an estate-planning attorney has.
The estate-planning attorney uses these tools to achieve their clients’ objectives. This is especially important for larger estates that may have several overarching interests.
One goal may be privacy. If a will goes through probate pursuant to the Illinois Probate Act, it will be a public document, allowing anyone to have access to it. This could create conflict in cases when a family member was left out of the will or gets a smaller portion of the estate.
One goal may be continuity. For example, if most of the assets are tied up in a business or some other venture that one may want to continue after their death, they leave sufficient assets to a trust, which would avoid probate and use the trust funds to continue the business. The trust then would pay any income that it earns from its investment to the family members until a specific event occurs, e.g., the children turn a certain age.
Yet another goal may be tax planning. The U.S. has some daunting penalties if one’s estate qualifies for the so-called death tax. If taxes are a concern, planning should begin well in advance. One can make intervivo gifts (gifts while one is alive) which may reduce the size of the estate. They can also create irrevocable trust, which is a good way of having some control of the funds while keeping the trust res out of the estate.
If done correctly, estate planning can ensure an efficient distribution of assets after death. If you have questions, contact an experienced Illinois probate attorney who can help you determine the best course of action.
If you have property or assets that you want to leave to your heirs, then you have several options. A trust can shield these assets from taxation and also probate. It allows you to protect your legacy and control your wealth. They are essential to good estate planning so it is important to know what they can do.
There are two types of trusts. The first is a living trust, which is called that because it is active during the grantors lifetime. A living trust can either be revocable or irrevocable. A revocable trust can be changed at any time in the grantor’s lifetime. If a relationship, circumstances or your intentions change then it is not an issue. But while it does avoid probate, a revocable trust is subject to estate taxes.
An irrevocable trust is the opposite. It immediately transfers your effects out of your estate and into a separate legal entity. There is no way to change your mind or use these assets because they are not yours anymore. Benefits of an irrevocable trust is that it can avoid probate and estate taxes.
The other type of trust is called a testamentary trust. These kind are specified in a will document and only created after the grantor has died. The funds can be subject to probate and estate taxes but can accomplish a variety of goals.
One example is a bypass or credit shelter trust which can protect your estate from taxation. It allows the transfer of the most money allowed without being subject to taxation and then moves the rest to your spouse completely tax free, even if the estate grows. Another example is a generation-skipping or dynasty trust. It allows the transfer of a sizable amount of assets tax-free to beneficiaries that are at least two generations removed, such as grandchildren.
Probate is the process of figuring out how to distribute a person’s assets after they die. If you have no estate plan at all, your property may not be distributed the way you wanted it to be distributed Taxes and state laws must be considered, but without a will, you have no control of your belongings. During probate, the court will oversee the division of assets and help mitigate any disputes.
The process of probate starts with naming the executor, either by a will or, in the case that the deceased had no estate plan, someone named by the court. The executor presents the will, if there is one, to the probate court. Heirs, beneficiaries and creditors are notified that the estate is in court in case they want to contest a will or bring any claims. In the meantime, the executor manages all financial matters, including debts and bills. Once all debts are finalized in the court summary of receipts, a report is public and given to all the beneficiaries.
How long the process of probate takes depends on how complicated the estate is. If a person is in a lot of debt, probate may take longer. Not all property is considered probate property.
Probate property is property that belonged to the individual who died, and had no other names on it.
Property with another person’s name on it, for example a home co-owned between a husband and wife, will automatically belong to the living owner.
Property in a trust is not part of probate.
Property that is meant to “transfer on death” will not be a part of probate.
If no estate tax needs to be paid out and few or no claims against the estate are made, the probate process could take less than one year. However, if the estate is contested it can take years for the process to be finalized.
Make sure you have an estate plan to simplify the probate process for your heirs and beneficiaries. Contact an estate planning attorney from the DuPage area who will be able to put things together for you.
Stock, Carlson, Oldfield & McGrath LLC is a law firm in Wheaton, Illinois, offering business formation and representation, commercial and residential real estate, estate planning, probate, civil litigation, and family law services to clients in the Greater Chicago area including: Glen Ellyn, Wheaton, Carol Stream, Hanover Park, Bartlett, Glendale Heights, Geneva, St. Charles, West Chicago, Warrenville, Naperville, Aurora, Lisle, Downers Grove, Hinsdale, Westmont, Clarendon Hills, Burr Ridge Elmhurst, Lombard, Oakbrook Terrace, Oak Brook, and throughout DuPage County, Cook County, Kane County, Will County, and Kendall County.