Wills, Trusts, and Estate Planning

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Estate Planning FAQs

DISCLAIMER: This information from the Law Offices Of Amanda T. Adams LLC does not constitute legal advice, is intended for educational purposes only, and does not establish the existence of an attorney-client relationship or specific guarantees of outcomes in individual cases. 

All of the references below REFER ONLY to the law of Illinois and DO NOT apply in any other state.
1. Why would I need a will? I'm only 31 with two small kids and don't have that much money.

Under the Illinois Probate Act, if you are a single parent and die without a will (a term called "intestate"), your two small kids will inherit everything you own - potentially unsupervised. 775 ILCS 5/2-1 (b), the Illinois Probate Act, provides that if no spouse survives a parent, the children (including minor children) receive all your money (after your bills are paid) in equal amounts.

Would you trust a five-year-old child to independently handle what was left over in your 401 K account? Sure, you may want her to inherit, but would not you prefer a guardian or trustee to supervise that money and save it for her college education?

Even if you die with a spouse, your adult spouse would only receive half of your money if you die without a will, with few if any controls on how your children spend that money. 775 ILCS 5/2-1 (a).

Furthermore, have you asked yourself who might take care of your children if you and their other parent both died? Many children set, so they would grow up with loving biological parents have had the unfortunate experience of both parents dying in car accidents. No one in either parents' family has ever discussed who might take care of their children. 

Everyone, because you have never assigned the care of your children or discussed it with them, thinks your children are not "their" problem. They have not promised you anything while alive about taking care of your children that they feel morally obligated to comply with. So the children might end up in the foster care system bounced from home to home without anyone, and no one to consider mom or dad. 

Setting up an advance will with an agreed-upon guardian relative or friend who has already given you their promise to care for your children could protect your children from continuing heartache in the event of your untimely death, the loss of you and their other parent, and the experience of living indefinitely in foster care.
Will on a paper
2. I am on a second marriage and would prefer to just let my children inherit the money. If I leave my spouse out of the will, will my children receive all the money and property in my estate at death?

No, under Illinois law, a spouse has absolute veto power over your will when you die. Under the Illinois Probate Act, 755 ILCS 5/2-8, your spouse has a right of "renunciation" over your will. This means that if she or he properly notifies the Court, she or he has an absolute right to receive one-third of your property when you die if you have children, even if your will says otherwise.

However, Illinois remains one of the very few states that actually allows you to disinherit a spouse, with an extremely low, if any, right of renunciation, if you do so through a Trust rather than a will. You need to contact an experienced Estate Planning Attorney to help you with this.
Last will
3. I heard that under Illinois law, will provisions allowing a spouse to inherit are automatically canceled if we're divorced. If I am in the middle of a divorce, but the Judgment for Dissolution of Marriage has not been granted, can my spouse still inherit?

Unfortunately, yes. As a matter of fact, if you are in the middle of divorce proceedings, but are not yet divorced, and you die during the divorce proceedings before it becomes final, your spouse may still retain the absolute right to seize some of your property at death. That is even if she or he is NOT entitled to inherit under your will, is living in open adultery with someone else because "I love you but I'm not 'in love' with you" and expected you to understand his/her walking out during a midlife crisis for someone younger and better looking.

However, Illinois remains one of the very few states that actually allows you to disinherit a spouse, with an extremely low, if any, right of renunciation, if you do so through a Trust rather than a will. You need to contact an experienced Estate Planning Attorney to help you with this.
Book and gavel
4. If I die without a will, what will happen to my property?

Under the same statute that deals with the first question, the Illinois Probate Act, 775 ILCS 512-1, if you die with a spouse but no children, your spouse receives 100 percent of your estate (everything you owned at death).

If you have no spouse or children when you die, then your parents, brothers, and sisters receive your money in equal parts. If you die with parents and siblings, but not all of your siblings have survived, then your nieces and nephews of that sibling receive in equal parts what your sibling would have received.

If you die without a spouse, children, parents, brothers, or sisters, your grandparents receive the money.

If you die with no surviving relatives, the money eventually escheats to the state.
Gavel
5. A close relative of mine just died and I was named Executor in the will. What does this mean, and what are my responsibilities?

The Executor means someone the deceased wanted appointed to pay your last bills and settle any claims that she/he owed anyone money upon his death either in or out of court.

At a minimum, the Executor should contact all of the decedent's creditors to let them know of the death, publish notice of the death, file a copy of the Will with the Circuit Clerk, and consult with an experienced Estate Planning Attorney about whether and how to probate the decedent's estate. Probate is a process after someone dies where a Court oversees how all of the decedent's money is properly distributed.

If someone dies without a will, Courts can appoint someone of their own choosing to serve as Administrator of the estate, who serves essentially the same function as an Executor, but was not appointed by the decedent in a will.
6. When I die, can the government tax the money I have saved, even if I have already previously paid taxes on this hard-earned income?

Yes, both state and federal taxes are charged when someone dies, depending on how much money was in the estate at your death. That is true, regardless of how the money is distributed, whether through a will or a trust unless you set up with an experienced estate planning attorney an irrevocable trust.

However, even an irrevocable trust will not spare you paying taxes - you often have to pay a gift tax at the time you transfer your property into the trust. There is often an annual exclusion amount, however, that is not subject to the federal tax.

Under the 2001 Federal Tax Act, a Washington, DC political battle over the Estate Tax resulted in a compromise raising the amount of money that had to be in an estate at the time of death before the federal government could tax it. In 2002, you had to own a million at the time of your death to remain subject to the 50 percent Estate Tax. In 2003, that number was raised to 1.5 million owned at death. In 2008, that number was 2 million owned at death. In 2009, you had to own at least 3.5 million at death to be subject to the Estate Tax.

In 2010, the federal estate tax is repealed for one year, regardless of your income. But the law goes out of effect on January 1, 2011, and it is anybody's guess what the federal estate tax amount will be in future years given the political landscape of Congress.
7. Why would someone want to set up a Trust if doing so cannot avoid all federal estate taxes?

Because you can reduce or avoid probate after death (taking the information on a Decedent's Property Owned at death before a judge in each state the decedent-owned property), specify who might serve as your guardian if you become incapacitated, improve privacy because the trust is less likely to be publicly litigated, and offer much greater protection of your assets from the creditors of people who'd like to have your money at death.

With a living trust, if you are going through a divorce, for example, you can set it up so your spouse cannot renounce it and seize 1/3 to 1/2 of your estate as a matter of law. If you would like your son who has huge college loans to pay off to receive the money without interference by creditors, the trust is also a better option.

For more information or to schedule an appointment with Amanda T. Adams, call our local-owned office at 815-793-6300 or contact us through email or by using our form. We speak conversational Spanish.
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