Estate Planning Can Bring Comfort to Your Family During Uncertain Times

The only thing certain in life is that we can’t predict what will happen
next. If you would have told me this time last year that in 2020 a new
coronavirus would appear, result in the current covid 19 pandemic, and have
governments worldwide issuing shelter-in-place orders and shutting down
entire sectors of the economy, I’d have looked at you like you were losing
your mind. Yet, here we are…
Here in Illinois, we are uncertain how long schools will be out. We are
uncertain when we will be able to eat in a restaurant again instead of getting
curb-side service or going through the drive through. We are uncertain when
people will stop buying all the toilet paper…
In this time of uncertainty, it is wise to focus on controlling the things
that you can. After all, it is within Your power today to protect your family
from the consequences of something bad happening to You in the future.
What do I mean? Well let’s say for example, that You are married with
two kids under the age of 18. If something bad happens to both You and your
spouse, what will happen to your kids? The answer to this question is up to
You.
You have the power today to protect your family from future
uncertainty. You have the power today to set up a Revocable Living Trust to
hold your property for the benefit of your children and to name a trusted
person of your choice to manage this property for your children until they are
old enough to do this for themselves.
“Wait a minute,” You say, “I’ve heard of a Will, but what is a Trust?”
Good question! A Trust is a type of legal entity that You can create to hold
Your property for the benefit of people that You name and that is managed by
a trusted person of Your choice. If You create a Trust, then you are the
Grantor of the Trust. The people that You, the Grantor, name to benefit from
the property in the Trust are the Beneficiaries of the Trust. Finally, the
person that You, the Grantor, name to manage the property in the Trust is the
Trustee of the Trust.
While there are different types of trusts, the type of trust our office
most commonly uses for estate planning purposes is the Revocable Living
Trust. Let’s break that down a bit. A Living Trust is a trust that is created by
a person during his or her lifetime, and a Revocable Trust is a trust that can
be changed or cancelled by a person during his or her lifetime. Thus a
Revocable Living Trust is a trust that is created by a person during his or her
lifetime that can be changed or cancelled.
“Ok,” You say, “I think I’ve got the basic idea. But what does it mean
that a Trust is a legal entity?” That’s an excellent question, and the answer to
that question is important. A legal entity is a person, business (like a
corporation or partnership), or organization that is recognized as a separate
individual under the law, capable of entering into contracts with another entity
and otherwise acting in the same way that other individuals can. This is
important for estate planning purposes because it means that if You create and
fund a Revocable Living Trust during your lifetime, You will have created a
legal entity to hold your property that is separate from You and survives your
death. This means that property transferred by You to your Revocable Living

Trust during your lifetime will NOT need to go though a Probate Proceeding
before it is distributed to the Beneficiaries of your Revocable Living Trust.
“Ok.” You say, “That sounds like a good idea if someone has a lot of
property, but I just have a few things. Do I really need a Revocable Living
Trust?” The answer is: It depends. (I know, typical lawyer answer.) My
follow-up question is: Do You own a house? If You are an Illinois resident and
You own a house, then you own real estate property. In the State of Illinois,
if you own a house and the house is titled in your name only on the date of
your death, then your house and other property must go through a
Probate Proceeding at your local Courthouse prior to your property being
distributed to your loved ones. This is true regardless of the value of your
house.
“Well, what is a Probate Proceeding?,” You ask, “And what’s the big
deal if my house and other property has to go through a Probate Proceeding
prior to being distributed?” In the State of Illinois, a Probate Proceeding is a
type of case filed at a Courthouse after a person passes away owning either: 1)
real estate (like a house), OR 2) personal property in excess of $100,000.00.
An Illinois Probate Proceeding begins with the filing of a Petition that requests
that Letters of Office be issued appointing an Executor (if there’s a Will) or an
Administrator (if there’s No Will). After appointment, it is the job of the
Executor (Will) or Administrator (No Will) to determine and account for the
property of the person who has passed away, to pay that person’s final
expenses from that property, and, finally, to distribute the property. An Illinois
Probate Proceeding takes a minimum of several months and is an expensive
process that involves attorneys and, often, multiple trips to the Courthouse.
[By the way, in the State of Illinois, Probate Proceedings are not on the list of
matters that Courts are currently hearing, and pending Probate Proceedings
have been postponed except for matters proceeding by agreement of the
parties.]
“Wait.” You say, “What if I have a Will? Is a Probate Proceeding still
necessary and expensive if I have a Will?” The answer is: Yes, it is. The
purpose of a Will is to tell your loved ones and the Court: 1) the name of the
person You want to determine and account for your property, pay your final
expenses, and distribute your property (i.e. Executor), 2) the names of the
people You want your property to be distributed to (i.e. Beneficiaries), and 3)
if you have minor children, the name of the person You want to take care of
your children (i.e. Guardian). In short, a Will is designed to assist your loved
ones in navigating a Probate Proceeding by naming Your Executor, Your
Beneficiaries, and a Guardian for Your children. As a result, a Will is another
very helpful estate planning tool, but it is an estate planning tool with a
different purpose than a Revocable Living Trust.
Often our office uses a Will and a Revocable Living Trust together as
part of a comprehensive estate plan for our clients. “Wait a minute,” You say,
“Why would I need both a Will and a Revocable Living Trust?” Why does a
carpenter need both a hammer and a saw?
Just as a carpenter has both a hammer and saw, as well as, multiple
other tools, our office has many estate planning tools that we can use to craft a
custom estate plan to suit your needs. If You would like more information
about what estate planning tools can be used to craft a custom plan for You,
please call our office today to schedule Your Free Consultation.