Estate Planning FAQs

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Frequently Asked Questions About Estate Planning

Naperville Estate Planning Attorney

Naperville Estate Planning and Trusts Attorney

Q. What Happens When You Die With No Estate Plan?

A. Intestate succession is the process of deciding who is the rightful heir or owner of property upon a death when a person does not have a wills. The Probate Act of 1975 (755 ILCS 5) dictates who shall inherit a deceased person’s assets upon a death in Illinois. See 755 ILCS 5. Simply put, a probate estate is an estate where there is no designated beneficiary for a given asset. Several such assets may exist in a person’s name such as a bank account and life insurance policies. Generally, bank accounts and life insurance policies will have contracts allowing a person too designate who they want to inherit their property upon their death. Unfortunately, a deceased person, also known as a “decedent” may have failed to update their financial documents upon a prior to their death. Intestate succession occurs when a person’s has no estate plan or the original plan fails for some reason.

Article II of the Illinois Probate Act (755 ILCS 5/2-1) describes who shall inherit a person’s assets when that person does not have a legally recognized Last Will or Trust instrument. Here is the relevant portion of the statute:

(755 ILCS 5/) Probate Act of 1975, Article II Descent and Distribution

(755 ILCS 5/2-1) (from Ch. 110 1/2, par. 2-1)
Sec. 2-1. Rules of descent and distribution. The intestate real and personal estate of a resident decedent and the intestate real estate in this State of a nonresident decedent, after all just claims against his estate are fully paid, descends and shall be distributed as follows:
  (a) If there is a surviving spouse and also a descendant of the decedent: 1/2 of the entire estate to the surviving spouse and 1/2 to the decedent's descendants per stirpes.
  (b) If there is no surviving spouse but a descendant of the decedent: the entire estate to the decedent's descendants per stirpes.
  (c) If there is a surviving spouse but no descendant of the decedent: the entire estate to the surviving spouse.
  (d) If there is no surviving spouse or descendant but a parent, brother, sister or descendant of a brother or sister of the decedent: the entire estate to the parents, brothers and sisters of the decedent in equal parts, allowing to the surviving parent if one is dead a double portion and to the descendants of a deceased brother or sister per stirpes the portion which the deceased brother or sister would have taken if living.
  (e) If there is no surviving spouse, descendant, parent, brother, sister or descendant of a brother or sister of the decedent but a grandparent or descendant of a grandparent of the decedent: (1) 1/2 of the entire estate to the decedent's maternal grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes, and (2) 1/2 of the entire estate to the decedent's paternal grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes. If there is no surviving paternal grandparent or descendant of a paternal grandparent, but a maternal grandparent or descendant of a maternal grandparent of the decedent: the entire estate to the decedent's maternal grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes. If there is no surviving maternal grandparent or descendant of a maternal grandparent, but a paternal grandparent or descendant of a paternal grandparent of the decedent: the entire estate to the decedent's paternal grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes.
  (f) If there is no surviving spouse, descendant, parent, brother, sister, descendant of a brother or sister or grandparent or descendant of a grandparent of the decedent: (1) 1/2 of the entire estate to the decedent's maternal great-grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes, and (2) 1/2 of the entire estate to the decedent's paternal great-grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes. If there is no surviving paternal great-grandparent or descendant of a paternal great-grandparent, but a maternal great-grandparent or descendant of a maternal great-grandparent of the decedent: the entire estate to the decedent's maternal great-grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes. If there is no surviving maternal great-grandparent or descendant of a maternal great-grandparent, but a paternal great-grandparent or descendant of a paternal great-grandparent of the decedent: the entire estate to the decedent's paternal great-grandparents in equal parts or to the survivor of them, or if there is none surviving, to their descendants per stirpes.
  (g) If there is no surviving spouse, descendant, parent, brother, sister, descendant of a brother or sister, grandparent, descendant of a grandparent, great-grandparent or descendant of a great-grandparent of the decedent: the entire estate in equal parts to the nearest kindred of the decedent in equal degree (computing by the rules of the civil law) and without representation.
  (h) If there is no surviving spouse and no known kindred of the decedent: the real estate escheats to the county in which it is located; the personal estate physically located within this State and the personal estate physically located or held outside this State which is the subject of ancillary administration of an estate being administered within this State escheats to the county of which the decedent was a resident, or, if the decedent was not a resident of this State, to the county in which it is located; all other personal property of the decedent of every class and character, wherever situate, or the proceeds thereof, shall escheat to this State and be delivered to the State Treasurer pursuant to the Revised Uniform Unclaimed Property Act.
In no case is there any distinction between the kindred of the whole and the half blood.

Generally, when a person dies without a Last Will and Testament in Illinois, his or her surviving spouse will inherit 50 percent of the assets of the decedent and the children will split the remaining 50 percent of the assets.

Q. What is a Last Will and Testament?

A. A Last Will and Testament, otherwise known as a “Will,” is a legal document which describes who shall inherit one’s property upon death. A Last Will and Testament typically performs three primary purposes. The first role of the Last Will and Testament is to appoint an executor or successor executor. An executor is the person legally responsible to present the Last Will and Testament to the probate court probate court and administer the wishes of the decedent according to the written direction of the decedent. The second role of the Last Will and Testament is to outline who shall inherit one’s property and assets. The third role of a Last Will and Testament is to appoint a guardian of any minor children of the deceased. A Last Will and Testament also serves other purposes, but these are the primary three goals.

Q. Why Does a Last Will and Testament Have to Go Through Probate Court in Illinois?

A. A Last Will and Testament does have to go through a probate court process in certain instances. In Illinois, a Small Estate Affidavit may be used for small estates of less than $100,000 in personal assets. A Small Estate Affidavit is limited to personal property such as life insurance and bank account proceeds. A Small Estate Affidavit is limited to personal property and does not apply to real estate interests. For example, if a person owns real estate and has less than $100,000 in personal assets, then an Illinois Probate Court process may be required.

Probate court is the court process that determines who is qualified to be appointed as executor of an estate and determine who is legally entitled to inherit either through intestate succession or through a Last Will and Testament. All Last Wills and Testaments are required to be filed at the local courthouse and become public information.

There are several situations in which a Last Will and Testament may not be required to go through probate. The first exception is when a Small Estate Affidavit is used. A Small Estate Affidavit may be used when the value of an estate does not exceed $100,000 and does not include real estate interests. In such a case, the estate is basically determined to be too small to be worth the hassle and expense of probate administration.

The second exception occurs when a person has distributed their assets through a legal contract. Life insurance and bank accounts are the most common examples of assets where a person designates a primary beneficiary and, sometimes, a contingent beneficiary. Assets involving a contract will not undergo the probate court process as long as the beneficiary is able to accept their inheritance legally. A minor child, for example, may not accept an inheritance in Illinois and an additional probate court process called “guardianship” is required. Another example could be an Illinois Land Trust where a person transfers their real estate property into a Land Trust’s name and remains the beneficiary. Upon the person’s death, the Land Trust agreement describes what will then happen to the property.

The third exception occurs when a person sets up a living trusts and funds the trust by transferring their assets into the trust. A Living Trust is similar to a Last Will and Testament in that the person outlines their wishes upon a death or incapacity. Unlike a Last Will and Testament, however, a Trust is not required to go through probate in Illinois.

Q. What Happens If I Become Incapacitated Before Death?

A. An incapacity occurs when a person lacks the requisite mental ability to make and understand key financial and health-related decisions for themselves. A person who is incapacitated may require a guardian to appointed for him or her. Guardianship proceedings are handled in probate court in Illinois. An appointed guardian has the ability and legal authority to supervise and make decisions for a person who is incapable of making their own decisions. There are two (2) types of guardians in Illinois. The first type of guardian is a guardian of the person who is responsible for making healthcare related decisions for a person. The second type of guardian is a guardian of the estate and is responsible for making financial decisions for a minor child or disabled adult.

Q. What is a Durable Health Care Power of Attorney?

A. A Durable Health Care Power of Attorney is also known as an Illinois Statutory Short Form Power of Attorney for Healthcare and allows a person to designate another indivudal as their attorney-in fact in the event of an inability to make health care decisions for themselves. Generally, a Durable Health Care Power of Attorney goes into effect only after a physician determines that the person lacks the mental ability to make health-related decisions. A Durable Health Care Power of Attorney outlines key important medical-related decision-making concerns, including:

  • Supervision of care;
  • Appointment of a care manager;
  • Access to medical records;
  • Authorization to act as a health care attorney-in-fact;
  • Acute and long-term care issues;
  • Maintain-in-residence provisions;
  • Power to give or withhold consent to psychiatric treatment;
  • Power to authorize relief from pain;
  • Power to grant releases;
  • Power to nominate a conservator or guardian;
  • Visitation; and
  • Advanced medical directives such as those related to:
    • Permanent unconsciousness;
    • Terminal conditions;
    • Experimental treatment;
    • Forms of treatment; and
    • Do not resuscitate (DNR) orders

Q. What is a General Durable Power of Attorney for Property?

A. A General Durable Power of Attorney for Property is also called an Illinois Statutory Short Form for Property. The Illinois Power of Attorney Act allows a person to appoint or designate someone else a person to act on their behalf upon an inability to make financial decisions for themselves. This second person is called an “attorney in fact”. An attorney in fact differs from an attorney at law because an attorney in fact is an agent authorized to act by a written instrument known as a “power of attorney” for a person. In a Durable Power of Attorney for Property, an attorney in fact generally has broad financial powers.

Sean Robertson and Robertson Legal Group, LLC help clients create a Durable Power of Attorney for Property that is thorough and outlines the following powers of an attorney in fact:

  • Power to sell, mortgage, lease, gift or transfer real estate;
  • Power to sell other property;
  • Disposal of proceeds of sale;
  • Use of credit cards;
  • Power to invest;
  • Securities and brokerage accounts;
  • Power to exercise rights in securities;
  • Power to execute further powers of attorney;
  • Power to demand and receive;
  • Ability to compromise and discharge;
  • Power with respect to retirement plan accounts and employment benefits;
  • Power with respect to banks;
  • Power with respect to legal actions;
  • Power to borrow money;
  • Power to establish, modify, amend, revoke, terminate, and fund trusts; and
  • Power regarding taxes and insurance.

These are a few examples of the powers outlined in a Durable Power of Attorney. A person may decide to limit the ability of the attorney in fact to carry out certain functions, but this power should be used with great caution. A person’s financial circumstances may be unpredictable and important powers may be necessary to carry out the duty and role of the attorney in fact.

Q. What is a Living Will?

A. A Living Will is a legal document describing a person’s desires regarding certain life-prolonging measures in the event that recovery is hopeless. A Living Will is used in an event that the person is diagnosed with a terminal condition that cannot be reversed with medical treatment. A Living Will differs from a Power of Attorney in that a Living Will refers to specific death-delaying procedures while Power of Attorney appoints a person to make critical decisions in the event of an incapacity. A Living Will is much more limited than a Durable Power of Attorney. Generally, a Living Will, Durable Power of Attorney for Healthcare, and Durable Power of Attorney for Property are part of a comprehensive estate plan.

Q. What is a Revocable Living Trust?

A. A Revocable Living Trust, also called a Living Trust, is a legal document that performs two major functions. The first major function is planning for the distribution of one’s assets upon the person’s death or incapacity. The second major function of a living trust is to appoint a Trustee and Successor Trustee(s) to manage the trust. In contrast to a Last Will and Testament, a Living Trust does not require a person to file their Trust Agreement at the local courthouse where the person last resided. A Living Trust is a private document unlike a Last Will and Testament, which is a public document. Second, a properly executed and funded Revocable Living Trust avoids probate court and does not involve a court process unlike a Last Will and Testament.

A Living Trust also usually has a spendthrift provision which prevents a creditor such as a divorcing spouse or a beneficiary’s creditor from accessing a beneficiary’s inheritance. This differs with a Last Will and Testament, which cannot address creditor concerns. A Living Trust also has the ability to appoint a guardian for a minor child or set up a Special Needs Trust for a disabled adult and protect one’s inheritance for government ineligibility of public benefits. Similarly, to a Last Will and Testament, a Revocable Living Trust is amendable, revocable, and/or modifiable. Thus, a person may change the details of their Trust Agreement.

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Sean Robertson and Robertson Legal Group, LLC concentrate in the areas of wills and trusts, estate planning, advanced estate planning and asset protection, and business protection and succession planning in the Naperville, Aurora, Wheaton, Geneva, and St. Charles’s areas. Sean Robertson is an experienced estate planning and wealth management attorney with over 14 years of legal experience. He is a graduate of DePaul University College of Law and University of Illinois at Urbana-Champaign. Contact our office for a consultation today.

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