Frequently Asked Questions

A will is a written document in which you direct what will happen to property you alone own after your death (called your estate). It names the persons whom you wish to benefit or protect (called beneficiaries), and designates someone (called an executor) to carry out your directions as to the distribution of your property.

To make a valid will, Illinois law requires that:

you must be at least 18 years old

you must be of sound mind and memory

the will must be in writing

the will must be signed by you and witnessed by two or more people who sign as required by law

If you do not meet these requirements, your will not be valid and the result will be the same as if you had no will.

The executor does not have to be an Illinois resident, but it will be easier if the executor is an Illinois resident. The witnesses should not be related to you and should not be beneficiaries or a spouse of a beneficiary. If your will disposes of real estate in another state, there will be requirements of that state that must also be met.

It is not safe to use a form or copy of someone else’s will. It is very unlikely that your circumstances and relationships will be the same as those of your neighbor.

If you do not have a will, the law requires that any property you own alone is distributed according to very strict rules that may be different from what you want to happen with your property after you die.

In general, if you die without a will, your spouse is still alive, and you have no children, then your spouse will get your entire estate. If your spouse is alive and you have one child or other descendent (such as a grandchild or great-grandchild), then your spouse will get ½ of your estate and your child or other descendent will get ½ of your estate. If you leave a spouse and more than one child or other descendent, then your spouse will get ½ of your estate and your child or other descendents will get equal portions of the rest of your estate. If you leave no spouse, then your estate will go to your children or descendents in equal portions. If you leave no spouse and no children or other descendants, your estate will be divided among your parents and brothers and sisters and, if a brother or sister is dead, to his or her children or other descendents.

There is a special need for a will if you have children under the age of 18. A guardian should be named who will take care of them after you are dead and make sure that any property they inherit is protected until they reach 18.

For example: Charles and Ruth had an only child (age 5) named Jane. Charles died without a will. Both Ruth and Jane survived Charles. Ruth received ½ of his estate and Jane received ½. Until Ruth went to court to have herself named as Jane’s guardian, she could not use Jane’s share for the child’s support or education. Even then, she was strictly limited by the law in what she could do with Jane’s inheritance.

The failure to make a will can often mean hardship and added expense for your immediate family, and may benefit some relative you may not even know.

The law leaves you free (unless you have contracted otherwise) to give away your property by will in whatever way you wish, except that your spouse can renounce your will and receive ½ of your estate if you leave no descendant and 1/3 if you leave one or more descendants.

No. When there is no will, an administrator named by the court (rather than an executor chosen by you) carries out distribution of your estate according to the law. The administrator has limited powers and may need to get permission from the court before he or she can do certain things, like selling your house or other property. The administrator must also pay for certain expenses with any money or property in your estate.

The cost of writing a will is usually much cheaper than the expenses the administrator has to pay if you do not have a will. A carefully drawn will can also often reduce taxes and other expenses.

If you make a will and name as executor an individual whom you trust and have confidence in, or a bank or trust company, you may, if you wish, give your executor broad powers to handle your estate without getting court permission for each specific action. All this will save money.

Why must your estate go through court? To give your creditors (people you owe money or property to) and persons who believe that they are entitled to share in your estate a limited time in which to file their claims against your probate estate. Unknown creditors generally have a six month time period to file a claim against your estate, beginning on the date that your executor publishes notice to the unknown creditors that your probate estate has been opened. These legal requirements protect your beneficiaries. In most cases, estates worth over $100,000 go through probate whether or not there is a will.

No. No other form of property ownership or contract right is an adequate substitute for a will.

If two or more persons own property together in joint tenancy and one person dies, the property will pass automatically to the survivor(s) independently of the provisions of any will and without court administration. However, even if virtually all of your property is in joint tenancy, only a will can assure that other property owned by you in your name alone will pass to those you intend to benefit. If joint tenancy property becomes your property alone because the other joint tenant dies before you, the amount of property subject to disposition by your will could be substantial. There also are tax hazards to joint tenancy that most people do not know about.

Illinois has new instruments which can also transfer property upon the death of an owner, but each form of instrument has advantages and disadvantages.

A trust agreement can provide for the distribution of trust property on your death independently of a will and without probate. However, even if most of your property is in trust, you should have a will to dispose of any other property owned alone by you at death that has not been transferred to your trust.

Life insurance, Individual Retirement Accounts (IRA’s), pensions and employee benefits will pass to the beneficiary named by you in those account records regardless of the existence of a will without the necessity of going through the court. However, if all the beneficiaries of your insurance policy, pension plan or employee benefits should die before you do, a will normally determines who will receive the amounts to be paid out by these policies or plans.

Also note that while these assets may be transferred outside the estate, for the purpose of assessing the inheritance tax and estate tax, these assets may be considered part of the estate.

A will can include provisions to assist your executor gain access to your internet and email accounts.  Your facebook or photo storage site may be the only places your loved ones may have to preserve your memories.  Of course you can make the process smoother by providing a list of accounts and passwords.  In a day when many financial institutions do not mail monthly or quarterly statements, your executor may not know where to find your assets.  Keeping a list of the accounts in your safety deposit box can help your estate locate your assets.

Most of the time. At any time you wish, unless you have made a contract otherwise, you may revoke or destroy your will and make a new one, or you may change the provisions of your will with an amendment called a “codicil.” A codicil must be executed in the same manner as a will

Ordinarily under Illinois law:

• a child born or adopted after the will has been made (unless provided for in the will) is entitled to the same share the child would get if there were no will.
• divorce or dissolution of marriage revokes a will as to all provisions for the spouse but the other provisions remain intact.
• marriage does not revoke a will but it represents such an important change of status that it is advisable to review your will.

A will should be reviewed from time to time, especially:

• after the death of a family member,
• a change of residence,
• the acquisition or disposal of property or a business,
• when the executor dies or leaves the state or
• when the witnesses are no longer available.

Since Federal and Illinois death tax laws change from time to time, you should have your will reviewed by an attorney periodically to analyze whether your will should be updated.

Nobody likes to think about their own death and many people avoid writing a will because they do not want to be reminded that they will die.  To be sure that your children will be taken care of and that your money and other property will be given to the people you want to give it to after you die, you should have a will.

An estate lawyer can assist you in coming up with a plan and then preparing all of the documents needed to carry out your plan and make sure that your will meets all of the legal requirements. It is dangerous to use a pre-printed form of a will or a trust instead of a properly written document that applies to your particular situation.

Here is a check list of some of the items you should discuss with your lawyer when you plan your will:

• personal effects
• taxes
• special bequests
• real estate
• investments
• life insurance
• executor
• minors and guardians for minors
• trusts and custodianships
• joint tenancies
• IRA’s, pensions and employee benefits

Illinois law allows you to sign a document called the Illinois Statutory Short Form Power of Attorney for Health Care (“Health Care POA”). This document, which is completely separate from a will, provides you with the opportunity, while competent, to name a family member, friend or other person (called an “agent”) to make medical decisions for you if you are unable to make and communicate decisions for yourself at a later date. Those decisions may include withholding or withdrawal of life sustaining procedures. The Health Care POA also allows the agent to choose whether to donate your organs and make burial arrangements.

If you do not have a Health Care POA, Illinois law also allows you to have a “Living Will,” which is limited in scope and tells your doctor your desires as to life sustaining procedures should you have an incurable and irreversible injury where death is imminent without death delaying procedures.

Where there is no Health Care POA or Living Will, the Health Care Surrogate Act allows your guardian, certain family members or close friends (if there are no family members) to make medical treatment decisions where you are unable to make decisions for yourself.

You should talk with a lawyer to make sure you understand your options regarding health care decisions and end-of- life alternatives.

Illinois has recently added new forms of the Power of Attorney.

The Power of Attorney for Property is allowed under Illinois Law.  It allows a person you select to manage your finances or sell your property if you become disabled.  With your attorney's help, you can select the person, the circumstances when the power becomes effective, what powers the person will have, how the powers are limited, and when the powers expire.  Without this document, a person interested in your situation must file a petition in court to appoint himself, herself, a family member, a private trustee or the government guardian, to be the guardian of your assets.  The court must find by clear and convincing evidence presented by a doctor that you are incapable of managing your estate.  This court proceeding can be expensive and entails court fees, fees for the doctor's report, attorneys fees, bonding costs, guardian ad litem costs, and reporting costs.  Creating a Power of Attorney before the situation arises can prevent these costs as well as the delay from a legal proceeding.

A trusted attorney should guide you through the analysis whether a living trust is appropriate for you.

For Frequently Asked Questions about Living Trusts, click here- Living Trusts FAQ

A trust is an estate of property in which title to property is held by one person or institution, but the benefit or use of the property is for other designated people.  The person establishing the trust is called the Grantor.  The person holding title to the property and overseeing the proper disposition of the property is called the Trustee.  The person who has the use of the property, which can be current or in the future, is called the Beneficiary.  The property held by the trust is often called the res.  In many cases, especially a living trust, the same person can be Grantor, Trustee, and Beneficiary at the same time.  The trustee is under the highest standard of legal duty, called fiduciary duty, to operate the trust solely for the benefit of the beneficiaries as directed by the written terms of the trust document.  In complicated cases, sometimes we use a Trust Protector.

A “living” or “inter vivos” trust is one that is set up and funded while the grantor (the person funding or establishing the trust) is still alive. In most cases, the grantor names his or her self as both trustee and beneficiary. In a joint trust scenario, both husband and wife are co-trustees as well as co-beneficiaries while both remain living. A living trust can be modified or revoked as long as the settlor (or settlors in the case of a joint trust) are living. Another kind of trust is the “testamentary trust,” which is established by a will, typically for the care of a minor child, and it operates only after the grantor’s death.

A joint trust is made between spouses. They act as co-settlors and co-trustees, and all of their assets are pooled together in the trust. While this can make for easier administration, it is important to know that all property held in this manner becomes marital property, and that the trust becomes irrevocable upon the death of the first spouse. Living trusts set up by spouses may also take advantage of the Federal tax marital deduction.   These are important distinctions that must be taken into consideration by a couple thinking about utilizing a joint trust.

Funding is the process of transferring your assets from your individual ownership to the trust.  The trustee becomes the title holder, while you or the others you specify in the declaration of trust, become the beneficiaries having the use of the property.

How a property is transferred to the trust depends on the type of property

• Property that has written a title (e.g., real estate) is transferred to the trust by changing the title.
• Personal property is transferred to the trust using a written document commemorating the transfer.
• Assets held in accounts (e.g., bank accounts, brokerage accounts etc.) are transferred by changing beneficiary designation with the institution managing the account, such as the bank.Often this means opening new accounts at banks in the name of the trust.

These types of property are described below.

Yes. The person you name as trustee has the full power over the assets in the trust.  Since you can name yourself trustee, you have control.  In the most common type of trust, a living or inter vivos trust, you or your spouse still have complete control.

You will not avoid probate if you fail to properly fund the trust. If you do not transfer your assets into the trust you will not get any of the benefits of it.  Your assets will go through the probate process you were trying to avoid.

Your attorney will help with the major assets, but you are ultimately responsible for ensuring all of your assets are transferred and all your accounts with institutions are transferred.

No, but it does take effort which should not be skipped. Much of the work can be done online or through the mail. Living trusts are now so widely used that institutions are familiar with them and have streamlined procedures in place to facilitate the funding process. There is some work to accomplish the transfer, but it is necessary for the trust to work as intended.

Your attorney can draft the trust describing the terms and conditions directing how the trust will operate.  Since you will convey the trust property, or res, separately, disclosure of the trust will not ordinarily disclose the assets.  That is not to say that the IRS or a court order cannot demand disclosure, but ordinarily there is no disclosure to the public.

You should try to get as much of your estate into the trust as possible.  In the case of dual trusts for spouses, it is also desirable to maintain as close to a 50-50 distribution of assets as possible between the two trusts.

The process of transferring real estate into your trust must comply with legal process.  The steps are as follows:

• Your lawyer prepares a Deed in Trust, in which you convey a specific parcel to the Trustee.
• A form is prepared confirming that the transfer is exempt from State of Illinois and County transfer taxes.
• You verify whether your town or village requires a transfer stamp tax.
• The Deed in Trust is recorded in the County where the land sits.  This places the world on notice that the property is in trust.
• You should notify your property insurance agent that the property is in trust so the policy can be conformed to the new ownership. 
• If there is a mortgage, you should notify the mortgage company.
• Have your attorney contact your title insurer to transfer the benefits.

You may be aware that a mortgage includes a clause which accelerates or terminates a mortgage with a "due on sale" clause.  The Garn St. Germain Act is Federal law which prevents this clause from taking effect when a property is placed in trust.

One example could be an automobile.  While you could make your car trust property, because cars depreciate so rapidly and are bought and sold frequently, most grantors do not transfer them to the trust. The placement of the trust on the car's certificate of title complicates the sale of the car.  On the other hand, antique or other valuable automobiles may increase in value or hold a great deal of value, and are thus more appropriate trust assets. If you do choose to transfer title, you should  contact the Illinois the Secretary of State.

Cyberassets, your assets on internet sites, are still too new for the law to adapt.  Most web sites have terms of use or User agreements which dictate the terms of use, and these are not well adapted to a trust.  The value of such assets are also not well established.

The ownership of a retirement account such as an IRA or other tax-deferred plan should not be transferred to a trust because that so can result in serious tax penalties and loss of flexibility in the future. Ordinarily the beneficiary of a retirement account, which itself may be a trust, is designated in the that account's paperwork.  You may want to name the trust as a contingent beneficiary of such plans. Spouses are treated as a special class under the law for these assets, and they should be kept as the primary beneficiary in order to ensure that they are able to exercise all of their rights. For example, a spouse can roll-over an account into their own IRA or tax-deferred account. Naming the trust as a contingent beneficiary gives you some control over the distribution of these assets should something happen to you and your spouse, while preserving your spouse’s rights. 

While you do not transfer the account to the trust, thinking of your Trust and Will as part of estate plan gives a good reminder to check the account paperwork designating your choice of beneficiaries in your retirement accounts.  Often these accounts are opened as much as 50 years in the past, and you may have forgotten who you chose to be your beneficiary, or the choice is no longer appropriate with your current estate plans and needs.  Now you have the opportunity to review your choices and make them consistent with your total estate plan.

Your lawyer can prepare a form for you conveying your personal property to the trust.

Life insurance may be owned by a specialized type of trust called an irrevocable life insurance trust. Living trusts do not typically own policies, but they can be named as the beneficiary in some plans.  First, you notify the insurance company and their specific change in beneficiary designation form executed. Then, the insurance policy information should be added to the schedule of assets kept with the living trust.

No.  You should still execute a will because some assets may not be covered by the trust.  You may later acquire assets by inheritance or otherwise.  The will can make sure these assets be transferred as you intend.  However, a living trust will reduce the costs and time of the remaining assets in probate.  Also, the balance of these assets may be transferred using the Small Estate procedure of the Illinois Probate Code. For more information on Wills, see the Wills FAQ.

In most cases a living trust qualifies as a "Grantor Trust," in which case, any income will pass through to your personal estate and be taxed at your own tax rates.  Living trusts established between spouses can also take advantage of the spousal exemption of the estate tax or "death tax."  Using this exemption can preserve much more of your estate for your children.

A lawyer.  In the hands of a competent attorney, a custom-drafted living trust can be an indispensable estate-planning tool, helping save an older person's survivors the costs, delays and complications of the probate process after his or her death.

Unfortunately, many of the living trusts purchased in this country in recent years have been sold not by attorneys, but by fly-by-night companies using scare tactics and high-pressure sales pitches to peddle one-size-fits-all products. Many of the people purchasing these living trusts don't even have assets substantial enough to make living trusts beneficial.

For some of these unscrupulous companies, the marketing of boilerplate living trusts is simply a means to obtain detailed financial information about senior citizens. That information is later used to sell the older people costly and unnecessary insurance products.