ESTATE PLANNING FAQS

1. What is estate planning?

Estate planning is the process of arranging your assets and affairs to ensure they are distributed according to your wishes after your death. It involves creating legal documents such as wills, trusts, powers of attorney, and more.

2. Why is estate planning important?

Estate planning is important because it allows you to control how your assets are distributed after your death and helps avoid the probate process. It ensures your wishes are followed and can minimize legal disputes.

3. What are the basic components of an estate plan?

Will: A legal document that outlines how your assets should be distributed after your death.

Trusts: Legal entities that hold and manage assets on behalf of beneficiaries.

Powers of Attorney: Documents that designate someone to make financial and healthcare decisions on your behalf if you become incapacitated or permanently ill. 

Healthcare Directives: Instructions for your medical care if you are unable to make decisions yourself.

4. What is a will, and why do I need one?

A will is a legal document that sets forth your wishes regarding the distribution of assets you leave behind. If you die without a will, those wishes may not be carried out and the distribution of your assets will be decided in probate court. 

5. How do I create a will in Illinois?

· Decide how you want to distribute your assets, name your beneficiaries, and appoint a guardian for any minor children.

· Draft a will in writing according to specific state laws and specify how you want your assets to be distributed

· Sign the will in the presence of 2 competent witnesses that are not the beneficiaries

6. What happens if I die without a will in Illinois?

If you die without a will in Illinois, your estate will go through probate court and be distributed to your surviving relatives according to state law. Without a will, you have no say in who gets what or who will manage your estate. If you have minor children, the court will decide who will care for them based on what it considers to be in their best interest.

7. What is a living trust, and how does it work?

A revocable living trust is a trust created and funded during your lifetime in which you place your assets. The trustee holds control over these assets and can modify or revoke the trust as needed. Upon your death, the assets in the trust are distributed to the designated beneficiaries without going through probate.

8. What are the benefits of having a living trust?

Avoids probate court, meaning your beneficiaries can access the assets as soon as you die. Unlike a will, a living trust is private. The grantor retains control over the assets during lifetime. 

9. How do I set up a living trust in Illinois?

Evaluate your assets, draft a trust agreement which outlines the beneficiaries and trustee, sign and notarize your trust agreement, transfer ownership if your assets into the trust. 

10. What is a power of attorney, and why is it important?

A power of attorney is a legal document that gives another person, an agent, the authority to make decisions on your behalf in case of permanent illness or disability. It ensures that your financial and healthcare wishes are honored if you cannot make decisions yourself.

11. How do I choose an executor for my estate?

12. What is the role of an executor?

The executor manages the estate after the deceased’s death. This includes distributing assets to beneficiaries, paying any debts, etc. 

13. How do I update or change my estate plan?

You can amend a living trust, revoke a will, and draft a new one. It’s often best to consult an attorney if you want to make changes to your estate plan. 

14. What are estate taxes, and how do they apply in Illinois?

Estate taxes are taxes on the transfer of the estate of a deceased individual. In Illinois, the estate tax applies to estates worth over $4 million.

15. Are there any estate tax exemptions in Illinois?

The first $4 million of an estate is exempt from estate taxes in Illinois. Any amount over this limit is subject to estate tax.

16. How does Illinois handle inheritance tax?

Illinois does not impose an inheritance tax.

17. What is probate, and how does it work in Illinois?

Probate is the legal process of administering the estate of a deceased individual. It involves filing the will with the probate court, appointing an executor, valuing the assets, paying off any debts and taxes, and distributing the remaining assets to the beneficiaries.

18. How can I avoid probate in Illinois?

You can avoid probate by creating a living trust. When assets are placed in a trust, they are managed and distributed by the trustee without the need for probate court involvement.

19. What are the benefits of using a living trust to avoid probate?

Using a living trust allows the appointed trustee to distribute the assets to the beneficiaries without the court's involvement and in private. 

20. Can I disinherit someone in my will?

Yes, you can disinherit someone in your will, as long as they are not a minor. 

21. How can I protect my estate from creditors?

You can protect your estate from creditors by creating an irrevocable trust. Assets in an irrevocable trust are generally protected from creditors because they are no longer considered part of your estate.

22. What should I include in a health care directive?

A healthcare directive should include:

Your wishes regarding medical treatment: Specify whether you want or do not want life-sustaining treatments.

When to end life-sustaining treatments: Define circumstances under which you would like life-sustaining treatments to be withdrawn.

Refusal of certain treatments: Outline any specific treatments you wish to refuse.

Designation of a healthcare proxy: Appoint someone to make medical decisions on your behalf if you are unable to do so.

23. How does Illinois law handle digital assets in estate planning?

Illinois law allows you to specify how digital assets such as social media accounts, digital files, or cryptocurrencies should be managed after your death. You can appoint a digital executor in your will or trust to manage these assets.

24. What are the rules for leaving property to minor children?

Property left to a minor child must be managed by a guardian or trustee until they reach the age of 18. You can designate this guardian or trustee in your estate plan.

25. Can I set up a trust for my children’s education?

Yes, you can set up an education trust specifically for funding your children’s education. The trust can specify how and when the funds should be used for educational purposes.

26. What are special needs trusts, and when are they used?

A special needs trust allows you to set aside funds for a person with a disability without affecting their eligibility for government benefits such as Medicaid and SSI. It covers expenses not provided by these programs, such as personal care, education, and recreation.

27. How do I name guardians for my minor children?

You can name guardians for your minor children in your will. 

28. What is the role of a trustee?

A trustee is responsible for managing and administering the assets held in a trust according to the terms of the trust document. This includes investing the assets, distributing them to beneficiaries, and ensuring that the trust complies with legal and tax obligations.

29. How do I choose a trustee for my trust?

When choosing a trustee, consider their trustworthiness, financial responsibility, and impartiality. It's important to select someone who can manage the trust assets according to your wishes and the trust's terms.

30. Can I change the terms of my trust after it is established?

If you have a revocable trust, you can change the terms at any time while you are still alive. However, the terms of an irrevocable trust cannot be changed after it has been established, except under certain conditions upon the court’s approval. 

31. What is the difference between a revocable and irrevocable trust?

Revocable Trust: Can be modified or revoked by the grantor during their lifetime. Assets remain part of the grantor’s estate for tax purposes.

Irrevocable Trust: Cannot be modified or revoked after it is established without the beneficiaries’ consent or court approval. Assets are removed from the grantor’s estate, which can provide tax benefits and creditor protection.

32. How can I ensure my estate plan complies with Illinois law?

Consult with an estate planning attorney in Illinois to ensure your estate plan complies with state laws and is tailored to your specific needs.

33. Are there any legal requirements for executing a will in Illinois?

Yes, the will must be signed by the testator and witnessed by two competent individuals who are not beneficiaries of the will.

34. What should I do if I suspect someone is challenging my will?

Include a no-contest clause in the will, make sure your wishes are stated clearly, and consult with an attorney on your options to protect your estate plan.

35. How can I provide for my pets in my estate plan?

You can create a pet trust to allocate funds for your pet and appoint a trustee to manage these funds. Additionally, you should name a designated caregiver and include instructions in your will.

36. What are the benefits of charitable giving in estate planning?

Charitable donations can lower taxes that may be due on your estate.

37. Can I set up a charitable trust or foundation?

Yes, you can set up a charitable trust or foundation:

Charitable Trust: This allows you to donate assets for a charitable purpose while receiving tax benefits.

Private Foundation: You can establish a foundation to manage charitable donations and support causes over time, which may also offer tax advantages.

38. What are the tax benefits of charitable giving through my estate plan?

Charitable donations may qualify for tax deductions and reduce the taxable value of your estate, potentially lowering estate taxes.

39. How do I handle debts and liabilities in my estate plan?

List all your debts and creditors and allocate assets in your estate plan to cover these debts and liabilities. This ensures that your estate can pay off any outstanding obligations before distributing assets to beneficiaries.

40. What is a “pour-over” will, and how does it work with a trust?

A “pour-over” will is a type of will that automatically transfers any assets not already in a living trust into the trust upon your death. It ensures that all assets are managed and distributed according to the terms of the trust.

41. How often should I review my estate plan?

You should review your estate plan every 3-5 years or during any significant life changes such as marriage, divorce, birth or adoption, or major financial changes.

42. What happens if a beneficiary predeceases me?

If a beneficiary predeceases you, their inheritance typically comes back to you unless you specify alternative arrangements in your estate plan. 

43. How do I address changes in family dynamics, such as divorce or remarriage, in my estate plan?

You should revise your will or revocable trust to reflect these changes, update your beneficiaries, and make any necessary adjustments to ensure your estate plan aligns with your current situation.

44. What role does an estate planning attorney play?

An estate planning attorney helps you:

Draft and review estate planning documents (wills, trusts, powers of attorney).

Ensure compliance with state laws.

Minimize taxes and legal challenges.

Address complex situations.

Provide guidance on asset protection and distribution.

45. Can I create my own estate plan without an attorney?

Yes, you can create your own estate plan using online templates. However, it’s generally advisable to consult with an attorney to ensure your plan is properly executed and specific to state laws. 

46. What happens if I move to another state after creating an estate plan in Illinois?

If you move to another state, review your estate plan to ensure it complies with the new state's laws.

47. How does Illinois law address estate planning for same-sex couples?

Illinois law recognizes same-sex marriages, so same-sex couples have the same rights in estate planning as opposite-sex couples.