The Law Offices of Michael Rada, LLC.
FREQUENTLY ASKED QUESTIONS
Estate Planning can be both confusing and complicated. On this page we will attempt to answer some of the more common questions that clients have asked when making their estate plans.
By clicking the links below, you will find answers to questions asked by real clients and people looking for information on estate planning. It is my hope that this page will be a beneficial resource for you.
Need more information? Please schedule a free 30-minute phone consultation using the button below and we can discuss your needs in more detail and determine what plan is right for you.
Please Note: The information that is found on these pages is not intended to be legal advice and reading these pages does not form an attorney-client relationship of any kind.
Q: What is an estate plan?
A: Estate planning is the careful process of arranging for and anticipating that one day there will come the need to distribute your assets and plan for your inability to make critical decisions in the way that YOU wish. Without an estate plan, you leave it to the courts to decide who takes care of you, where your property goes after your death, and who will take care of your children!
Additionally, estate planning will document a well thought out plan that minimizes tax burdens, transfers property, reduces or eliminates the need for probate and eases the burden on your loved ones.
Estate planning includes planning for incapacity – both short and long term, planning for the care of your children, documenting your final wishes for burial or the giving of an anatomical gift. It can even plan for the ongoing care of your beloved pet!
Estate plans can be very simple or quite complex. This depends largely on what you own and how you wish for it to be distributed at your death. True, contemplating our final wishes and the fact that the inevitable will come for all of us is hard. It is a tough conversation to have. But having that conversation now and working with a skilled attorney to be sure it is properly documented is truly a gift that you can give to your loved ones.
The passing of a loved one that died without an estate plan can be an extremely stressful situation for those left behind. There is so much uncertainty and stress that will be endured as the court sorts out how things will be distributed – quite likely in a manner that YOU never would have wished for!
Settling an estate that is well planned for and documented in an Estate Plan after the passing of a loved one is certainly not stress free – but the plan does relieve one very large burden on an already grieving family – sometimes so much to the point that settling the estate can be looked at as an honor by those involved, for they are carrying out YOUR final wishes – truly a gift that you gave to your loved ones making the process less of a burden, and more of a final celebration of YOUR life!
Q: Do I need an estate plan?
A: The short answer is “YES!”
No matter how old you are, what your occupation is, whether or not you have children or are married or single ‑ YOU need to have an estate plan in place!
An estate plan is more than a will ‑ it is a collection of well written documents that plans for and provides for the distribution of your assets and possessions at the time of your death, while avoiding or substantially decreasing unwanted costs that will take from your assets ‑ such as probate court fees, state and federal estate taxes, and more!
Your estate is the collection of all of your assets, finances and possessions at the time of your death. These are your most treasured belongings, your hard-earned life savings, perhaps the home you raised your children in!
Don’t leave it to chance for how these treasured possessions will be distributed. Call today to begin the process of creating YOUR estate plan!
Q: Who should I select as my witnesses?
A: In order to make your estate plan documents legally effective, Illinois law requires that the signing of the documents be witnessed by two “disinterested individuals.” These people must be over the age of 18, and not a recipient of any gifts or assets in the documents. It is best if the witnesses are individuals that know you who could attest in court to your mental well-being at the time of the signing of the documents if that were to ever come into question.
The following individuals should NOT be chosen as a witness for your estate planning documents:
• Anyone under the age of 18.
• Anyone who may profit or benefit from your estate plan and their relatives.
• Anyone designated in your estate plan, for example as executor, trustee, Power of Attorney Agent.
• Your spouse.
• Any family members, or spouses of family members.
• Anyone who is directly involved in your direct care as a caretaker or medical professional.
• Someone who is blind.
• Someone who no longer possesses sound mental capacity.
• The person who is notarizing your documents.
Unless a member of one of the above categories, witnesses can include friends, neighbors and co-workers. In addition, your witnesses can be strangers and individuals who are not acquaintances of yours. Your witnesses will not see or know of the contents of your estate plan documents and will only know the type of document that they are witnessing.
Q: What is the difference between a Will and a Trust?
A: Wills and Trusts are two of the most common documents used in estate planning. They each have their own benefits and potential limitations. This article will briefly describe some of the main differences between these two estate planning tools. Please contact The Law Offices of Michael Rada to learn more and to discuss how these documents fit into your estate planning needs.
What is a Will?
A will is, in most cases, the cornerstone of your estate plan. This is a document that you prepare during your lifetime that states how you want your affairs handled and assets distributed after your passing. Some will can be very simple, while others quite complex. Wills must be written and executed as per the state’s laws for it to be enforceable so care must always be taken to be sure that the will you are preparing complies with your state’s law. Failure to do so could render the will unenforceable.
When you die with a valid will prepared, you are said to have died “Testate.” When you die with no valid will prepared, you are said to have died “Intestate.”
Your will can give explicit instructions how you want your possessions and assets to be distributed upon your death. You can give these items to family, other individuals or charity. Your will is a legally binding document and the person you chose to be your executor must follow your instructions exactly as they are written, unless you give your executor or someone else decision making powers for how some or all of your assets should be distributed.
If you have minor-aged children, your will can appoint a person or persons to be guardian of your children. If a guardian is not appointed at the time of death, your surviving family will have to seek help in a probate court to have a guardian appointed for your children. The person appointed may not be who you would have chosen to raise your children.
A will can also create a trust upon your death. This is known as a “Testamentary Trust.” In this situation, the will contains all of the language needed for the trustee to manage the testamentary trust upon your death. A primary example of where testamentary trusts are used is in the case of when minor children, or individuals with special needs may inherit all or some of a decedent’s estate. Instead of giving the assets outright to that individual, a trust is formed and funded upon your death such that the trust provides the trustee with direction on how the assets are to be used for that person’s benefit.
With some exceptions, you can also provide in your will explicit instructions that a particular person should not inherit a part of your estate. This is called “Disinheriting” someone.
During your lifetime, your will may be amended or terminated at any time provided you have the legal capacity to do so. If you wish to amend or terminate a will, you should speak to a lawyer as there are specific rules for how this may be done.
A will is not private after your death. It will be filed with the probate court in the county of which you resided upon your death. Further, a assets and property that passes must do so through a probate process. Depending upon the size of your probate estate, this may or may not require involving the probate court. You should seek legal advice on this issue.
What is a Trust?
A trust is another fairly common document that is an integral part of many estate plans. This is a document that you prepare during your lifetime that states how you want your affairs handled and assets distributed after your passing. Some trusts can be very simple, while others quite complex. Like wills, Trusts must be written and executed as per the state’s laws for it to be enforceable so care must always be taken to be sure that the trust you are preparing complies with your state’s law. Failure to do so could render the Trust unenforceable.
The person making the trust is known as the "Trustor" or "Settlor."
Oftentimes, trusts are used for asset protection, transfer of real estate, tax avoidance and providing support for Medicaid or special needs individuals. These Trusts can be quite complicated and therefore you should always work with an estate planning attorney in the drafting of these documents.
A trust is a fiduciary relationship in which you give another party known as the “Trustee” authority to handle your assets for the benefit of your beneficiaries.
As mentioned already, a testamentary trust is one that is created in your will. On the other hand, a trust that is created during your lifetime, and one that typically holds some or all of your assets while you are alive is commonly called a “Living Trust” or an “Inter Vivos Trust.” These trusts can be revocable or irrevocable, meaning you may or may not be able to modify or terminate them once they are created. Most living trusts will be revocable during your lifetime, and then become irrevocable at your death.
Property contained in the trust will pass to the beneficiaries outside of the probate process. This is one of the great advantages of trusts. Trusts are also confidential as they are never filed with the court either during your life or upon your death. Keep in mind, that oftentimes, if probate avoidance is the only reason to create a trust, it may be more efficient and cost effective to use other "will substitutes" such as beneficiary statements for financial accounts and a Transfer on Death Statement for Illinois residential real property.
A common example of where a trust may be the best tool, is when the Trustor wishes to set direction or constraints as to how their estate property should be managed or used after their death. Here, the Trustor essentially "speaks from the grave" giving direction that the Trustee must follow for how the assets will be utilized. An example may be giving money to be held in trust for the benefit of a grandchild such that the funds may only be used for education, the purchase of a home, or other specific reasons.
Trusts can be fairly inexpensive to create or quite expensive depending on how complicated they are. In addition, the price asked by an attorney to write your trust may vary widely from one attorney to the next.
Wills and Trusts are extremely important documents and at least one of them will be included in virtually any estate plan. In the case of a trust plan, you will also have a “Pour Over Will” that is drafted to be a sort of catch-all to move, at your death, any assets that were not held in the trust during your lifetime that you wish to distribute through the terms of the trust.
Every estate plan is as individual as the person making it. Trusts are overkill for many estate plans these days due to other estate planning tools that are available such as beneficiary designations on bank and investment accounts. That said, trusts certainly still do have a very valid place in estate planning and are often times the right tool for the job. Once your attorney understands your needs and desires, he or she will carefully craft an estate plan for you using the documents that are best suited for your needs.
Q: Who gets Grandma's Rocking Chair?
A: When a loved one passes, they typically leave behind a fair amount of personal possessions such as clothes, jewelry and other possessions. Some of the items are of no particular value to anyone, but certainly, some of them are indeed of great value. Sometimes the item is simply sentimental in nature, sometimes the item is of true economic value.
Planning ahead on how the items of value, whether sentimental or economic, can go a long way to help reduce the potential for arguments and disagreements when the time comes to divide up your property. It is very important that you take the steps necessary to be sure that your wishes are conveyed and that everyone knows that the property is being distributed exactly in the way that you wanted.
When an argument on how to distribute your property amongst family members arises, sometimes the only alternative to settle the dispute is through the probate court. This is not to anyone’s advantage for several reasons. First, courts can be unpredictable and the solution that the court orders may not be one that is satisfactory to anyone. Second, fighting these sorts of issues in court is expensive and very time consuming. It is quite likely that the legal bills accumulated in such a fight will far exceed the value of the property that the parties are fighting over. Third, court battles of this nature typically leave family wounds that will last for years – maybe even the rest of the lives of the people involved in the dispute.
These sorts of disputes can, in most instances, be solved in advance through proper planning when you are making your estate plan. Your will or trust can give specific instructions to your executor or trustee on which items will be given to which individuals. By doing so, you have eliminated any of the guesswork and confusion that will occur when family disagrees or is not quite sure how you would have wanted your property distributed.
Another method is to devise a method by which your family will use to determine how your property will be distributed. For example, say you have three children, A, B and C. You leave instructions such that each child writes their name on a slip of paper and puts it into a hat. Then, another person draws one of the slips of paper, followed by each of the others slips of paper. The order in which the names on each slip of paper are drawn from the hat determines the order in which each child has an opportunity to select an item from their loved one’s possessions. If there are disagreements, perhaps you provide that each child may make no more than two trades with their siblings if that is desired. Certainly, there are other methods that can be devised to allow for a fair distribution of property. Perhaps a method you used to resolve conflicts amongst your children when they were young will once again be appropriate here – and it just may conjure up wonderful memories from their childhoods making the process just a little more enjoyable, and one that they know was from your heart.
Certainly, you can also give your executor or trustee the power to distribute your property in a manner that they see fair. You can leave specific instructions to help them make their decisions so that they know your feelings and desires. One caution however, in this case it may be best that the person making the distribution decisions is not actually receiving items from the pool being distributed.
Another option is to instruct the executor or trustee to simply sell everything at a fair and reasonable price such as in an estate sale. Then, once everything is sold, simply divide the proceeds of the sales in equal shares amongst the children.
The death of a loved one leaves behind a lot of confusion, emotion, and in many cases, a significant number of tangible items and possessions. Writing a strategy for how the items will be distributed in your estate plan can go a long way towards reducing the stress and potential disputes that may arise when the time comes to distribute your property. Much of what you do in your estate plan today, will go a long way towards making the lives of your loved ones just a little easier down the road.
Q: How much does and estate plan, will or trust cost?
A: One of first questions I get when I speak to a prospective client regarding their estate planning needs is "How much will my estate plan cost?"
There is no one answer to this question as the range varies greatly from law firm to law firm. A lot of the pricing is dependent on the complexity of the work and how complicated the estate plan will be. Only through dialogue with the prospective client can an attorney quote a price for an estate planning matter.
Some attorneys price their work by the hour, others offer fixed fees with the potential for an up-charge if the work requires more time than originally anticipated.
I believe that you should know what you are going to pay BEFORE you hire us. Therefore, I will give you a quote for a final fixed price for preparing your estate plan before any work begins. If there is the possibility of additional fees such as the recording of documents with your county, you will have full visibility of these charges in your engagement agreement. Of course, if your plan requires significantly more work than expected, there may be an additional fee, but no additional work will be performed until you approve. In short, you should never be surprised at the final price of your estate plan and are always in control of what you are willing to spend.
Providing up-front fixed-fee pricing is just one of the ways that I provide an honest, fair and affordable service to my clients. I am happy to discuss estate planning pricing in more detail with you. I invite you to set up a consultation with me at your convenience.
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