Was I Just Disinherited?
As an estate planning and estate administration attorney firm, we routinely get questions when an individual’s loved one has died and they believe they are owed an inheritance. Perhaps they heard their loved one mention a Last Will and Testament or a Revocable Trust or, worse, a loved one died and because the individual is the only reviving heir, they are confused when they can’t obtain a second mortgage. Leaving the latter situation for another time, below are a few common questions we are often asked. Q: How will I know if I\’m a beneficiary of my mother’s Will or Trust?A: The Executor or Trustee must contact you; it’s the law. Q: My grandmother died a year ago and had a Trust. My uncle, the Trustee, won’t tell me anything. Is there anything I can do?A: Your grandmother may have left everything to her children (your uncle and parent) equally and not per stirpes, in which case, you may not be entitled to know anything. However, if your parent, who was your grandmother’s child, predeceased your grandmother, you could seek to probate your grandmother’s estate. Q: My father died and his Trust left everything to my stepmother, and upon her death, me and my siblings will inherit. Can’t we get anything now?A: If the terms of the trust are validly provided as you stated, you can’t receive anything now. You may receive inheritance from life insurance or bank accounts whereby your were the designated beneficiary but that’s all. A marital Trust, which is what this may be, generally provides all income and complete discretionary distributions of all principal to the surviving spouse. In other words, your stepmother can spend up or sell all trust assets, leaving you and your siblings with nothing. Be nice to your stepmom. Q: My sibling mentioned her Trust before dying a month ago and we can\’t find it among her papers. What she me and our other brother do?A: If she had a lawyer, contact the lawyer. If she was a regular client at a bank, maybe she has a safe deposit box, which will require a Small Estate Affidavit to open; but it could be in there. If you can’t find anything in 90 days, click here to learn about probate. Feel free to contact us if you\’ve got a question.
A 90-Second Story on How Estate Planning Saves Lives*
Monday morning I typically share basic information about estate planning, hoping that someone will understand that it just isn\’t about planning for death. Yet, one also hopes that the plans you create don\’t go into effect until decades later but experience illustrates that is not the case. Then, this past weekend, into my inbox came an email from a former client, proving this very point: Estate planning is critical even if you have a very modest estate and even if you are young, e.g., late 20s. This is a scary story with a happy ending from a former client who gave consent to share. I share because my job is to protect and life is unpredictable. All personal identifying information has been removed and this sharing is consistent with what is allowed per the State of Illinois Rules of Professional Conduct and the American Bar Association Model Rules of Conduct. Hi Max, I hope all has been well with you… I recently had a medical emergency. Only because I have a living will and my medical providers have a copy of the document you prepare/instruct your clients to send to specific providers was I able to have my medical wishes honored. If I hadn\’t had you prepare my will, if my medical providers hadn\’t had a copy of the documents… I would likely be in an even worse medical situation. It was a horrifying experience… Thank you so much for preparing my will and for preparing the documents my medical providers needed in order to advocate for me. I only had you prepare my will in case I ended up dead or in a coma — I had no idea that the will could be life-saving while I was conscious and able to express my wishes. I am not exaggerating when I say that you helped save my life. This is a true story and why I love my job. *Having the appropriate documents in place doesn\’t always work, regardless of who prepares them. Yet, having some kind of plan is generally better than not having a plan at all.
Your Resolution: Keep Fake Children Out of It
Recently a post went out from our office across a few social media outlets that pretty much sums it up when it comes to reasons why most folks, especially parents and smallbiz owners need a will. The post went something like: “Got kids? Get a will. Got more than one heir? Get a will. Got a high risk job? Get a will. Got the picture? If it\’s a Renoir, get a will.” The Issue: Children While we’ve written here repeatedly about how important it is for parents to have a will because of the guardianship provision, it bears repeating. Only by having a valid will can you nominate a potential guardian or potential guardians for your children. If you’re a single parent, having a valid will is all the more important. You don’t want an irresponsible parent having control over your child’s estate, which he or she will have, if you’ve followed this series and bought life insurance, or daily care if the other biological parent believes that chips and fruit punch make for a good breakfast. An alternative issue about children can be found in the converse: If you’re single and have been responsible intimately, you want to ensure that “fake children” cannot inherit from you. The issue: Multiple heirs. Wills or the potential for inheritance often results in less than happy-go-lucky family dynamics, especially if someone dies without a will and with a couple of children or a few nieces and nephews. So a will allows one to head the family feud off at the pass. You can state who will get what and when and the best part is you don’t have to say why. Frankly, that should be communicated long before the ink on the will is dry. If you’re unsure about the allocation, you can leave it to the discretion of the executor and have a “no-contest clause” inserted and then talk about it at Thanksgiving. That might provide the impetus needed for having that “conversation.” The Issue: High Risk Profession. Do you work as a carrier of jet fuel? Are you a criminal defense attorney or a divorce lawyer with walk-in offices? High-wire artist? Human rights attorney working in the hotspots, such as Afghanistan? The Issue: Art and other collectibles. People tend to put a value on everything from brown crock-pots to President Jefferson’s cravat. If you own anything that is similar to Jefferson’s cravat, the pen Clinton used when he signed DOMA, Reagan’s cowboy boots, Liberace’s cape, you need to get that or those items first appraised by a qualified appraiser. Next, you should have a will prepared that will determine how that valuable piece or collection is going to be managed, i.e., sold, handed down, donated. More than 70% of Americans don’t have a will and that percentage surely includes people who have children or who don’t plan to have children, folks with more than a few heirs who might argue over a collection of antique doohickeys. Children should be taught how to plan; one should plan appropriately for not having children; and doohickeys should also be in the plan – the estate plan that includes a will.
A Letter and Recipe for Your Family\’s Long-Term Health
Dear Family, Friends, and Folks Like Me, Last weekend I was able to release my culinary skills on a lovely group of friends and it was so delightful, I thought I\’d write a letter capturing that theme. So, I’m writing to ask that you join me in promising not to take the path of so many of our elders in creating a disastrous family meal and that you follow a healthier recipe. A friend recently heard the term, “Sandwich Generation,” for the first time. He asked me if it was because our peers grew up with Wonder Bread. Smiling, I responded, “Not quite.” I explained that the term is not because of what we ate as kids but because of what many of us are experiencing as adults. If we step back and look at the generations of family to whom we are connected, most of us will have children, whether our own or nieces, nephews, or cousins, on one side and our parents or grandparents, and sometimes both on the other side. Accordingly, we will have loved ones looking to us for care and assistance from both sides. Considering “sandwiches,” if our loved ones are the bread, then what are we? Yes. We are the stuff in the middle – peanut butter and jelly, roast beef, turkey – and because some of our elders didn’t understand or didn’t receive lessons on how to prepare a healthy, life-sustaining, family meal, many of us are starting to feel more like seamy meat-by-product instead of the tasty Portobello mushroom. So, Dear Family, Friends, and Folks Like Me, take a couple of seconds to jot down this recipe for a healthy family meal: Ingredients 1 lb of good health insurance, which may include long-term care insurance because, despite our denial, we will get old and most of us will live longer than anticipated 2 tbsps of life insurance: one for income replacement and the other for bills and larger items that must be or should be paid, such as mortgages and college educations 2-4 gallons of consistent retirement savings – about 1 cup per year 2 tbsps of powers of attorney: one for financial issues and one for healthcare issues; and 1 Will: so you can decide on who gets what and not the courts. Preparation Combine all of the above with 3-4 trusted and honorable fiduciaries, covered by a trust if you own a home, and stir occasionally with a very good financial planner and CPA. Cooking Time Then let sit for about a year, or taking it out more frequently to revisit growing family needs basis. Let’s make a conscious promise that instead of making our children feel like overdone and gamy sandwich meat, we show them that they are part of a healthy, hearty stew from which everyone can benefit and be satisfied in the long run. A votre sante! Max
Estate Planning and Bologna
It’s National Estate Planning Awareness Week, so this article digresses from the Marriage Equality Government March series that began last week. The regularly scheduled program will resume next week. This article is about estate planning sandwich meat, in particular, 3 common servings. “I have more important things to worry about.” Colleagues and I often share “war” stories about the one that got away: the potential client who cancelled an appointment and then went on a fabulous vacation. We shake our heads because the scary anecdotes we tell clients about what happens when families fail to plan are not just Halloween pranks, they’re the stuff law students study. Still, no one ever thinks it will happen to them or their families until someone is seriously injured, diagnosed with a catastrophic illness, or dies. Then, because of procrastination, certain wishes may not be possible and what would have been unnecessary legal services will be unavoidable and potentially more expensive. If you can think of something more important than having genuine peace of mind or maintaining family harmony while you’re going into surgery, do share. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ “I don’t need an estate plan; I don’t have anything.” In fact, you do have an estate plan. If you’re in Illinois, it’s the one the state created for you in 1975, called the Probate Act. Perhaps you don’t need a will or a revocable living trust, but I’ve yet to meet an adult who doesn’t need powers of attorney. Also, I haven’t met a parent with a minor child who doesn’t need a will. Finally, even if you “don’t have anything,” is it fair to burden loved ones with emotionally challenging decision-making and bills were something to happen to you? For individuals with modest estates, a little life insurance and powers of attorney can go a long way. Thus, yes, you do have “something.” Chapter 755 of the Illinois Compiled Statutes, Act 5, Article 2, Section 1 says so. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ “I can’t afford an estate plan.” Millions of people in this world go without buying quality items for a long time or ever. The decision-making process is similar to the one used when buying shoes. My elder family members – men and women – always cautioned me about shoe purchases. “You only have one pair of feet to last your entire life,” they warned. So was I going to buy cheap shoes and then pay a ton o cash to the podiatrist or buy good shoes and save a ton o cash in the long-term? Similarly, buying a will in a box or online are reasons why probate courts and lawyers who specialize in probate can end up with a ton o cash and why property goes unclaimed and why families feud. So, what kind of shoes do you like? Better yet, what kind of shoes do you want your children to buy? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ It’s National Estate Planning Awareness Week; the same week will occur again next year; and most who need to act will not have acted by then. However, if one person does act after reading this article, whether by contacting me or another attorney, then it will be worth it to them and their loved ones; and I will have made one more person proactively aware.
Dueling Executors
Frequently, I answer questions on Avvo about estate planning and related topics. A little while ago, someone asked a question about the validity of a will that was “poorly written” and disputes between co-executors. This article expands on that answer. A will is considered invalid if its \”formalities\” are not followed. The formalities are that the will be signed by 2 credible witnesses while in the presence of a legally sound adult testator (person who makes the will) when he or she signed the will. So, Skyping or video signings are not allowed, at least in Illinois. In addition to being credible, witnesses must also be adults and “disinterested.” A disinterested witness is one who is not a beneficiary, either primary or contingent, under the will. If a potential beneficiary or the spouse of a potential beneficiary acts as a witness, then 3 witnesses should be used. Sometimes it is difficult to equally divide estate assets to an exact amount, which is why attorneys use \”substantially equal\” or \”as equal as possible\” with respect to distribution language. Presuming a disputing co-executor has a copy of the will, the will’s terms should define how disputes between co-executors should be handled. If the will is silent on that issue, then a case of breach of fiduciary duty may exist because an executor, even if also a beneficiary, has an obligation to all of the beneficiaries, not just himself of herself. However, Illinois courts have started looking very closely at the terms of the instrument and the facts surrounding disputes. Additionally, courts are interpreting wills and trusts from a contractual perspective, going so far as to state one executor did not have a fiduciary duty. Thus, breach of fiduciary duty may now be a very difficult claim to successfully make. A will is typically invalidated on grounds of undue influence, i.e., someone took advantage of the testator’s mindset while he or she was making the will, or other similar grounds. A validly executed but poorly written will is not a reason to invalidate the will as a whole. Even if a provision of a will is deemed invalid, a court will likely strike the provision as invalid but maintain the validity of the rest of the instrument. Feel free to check out my Avvo answers on our website.
7 Deadly Estate Planning Don\’ts
Experience and observation often has me shaking my head as I assist families in correcting mishaps by well-intended loved ones. This article is about some of what those families have learned. Don’t designate minors as primary beneficiaries on anything. Imagine being a divorcee with Peter Pan as an ex-spouse and play-date dad. The unthinkable happens but you’ve left a life insurance policy naming your 12 year-old son as primary beneficiary. Guess who may control the proceeds of that policy? Don’t designate adult children who cannot manage personal finances well (aka “spendthrifts”) as primary beneficiaries on anything either. Imagine leaving $250,000.00 to your daughter who blows it in one year on my favorites – Ralph Lauren, Rancho Mirage, Peach Champagne, Anne Fontaine, Jimmy Choo, and Paris. Note: I’m working my way up to Anne Fontaine. Don’t assume a will does the trick if you’re cohabiting. The potential of inheriting even modest sums of money does strange things to the affinity family members have for each other, let alone what family members may have felt for non-blood-related members. Family members will try to kick a cohabiting partner to the curb so fast, the engraving on the headstone won’t be finished yet. Don’t depend on a will if you and your spouse or partner have children from previous relationships. What do you think will happen if the step-children who you adored and treated so generously during the 15 years of your marriage to their father realize that you’re leaving everything to your children? More importantly, what do you think your kids will do if they realize that you’ve left a substantial portion to the step-kids? Ahhh…the privacy of trusts. Don’t ignore documents with beneficiary designations if you’re recently divorced. Imagine winning a handsome settlement because Peter Pan was also Mr. Gigolo and then, the unthinkable happens, and you didn’t change the designations on your will and life insurance? Antacids don’t work for the dearly departed. Don’t ignore planning if you’re recently married, especially if a prenuptial agreement is involved. And for goodness sake, ensure that your attorney takes care to explicitly define certain items, such as the marital residence, but is not so explicit as in providing the exact address. What if years later, you divorce and the prenupt states you get the house on Rosemary Lane no matter what but your spouse convinced you to sell the house on Rosemary Lane but your will states that in the event of a divorce, the terms of the prenupt govern the property that shall be considered your estate? Don’t ignore planning if you’ve more than one intended beneficiary. Beneficiaries will fight over pennies, over tattered recliners, over cats, over who gets to be administrator. Maybe you’ll enjoy the bickering in the karmic impish sense, but do you really want your estate to pay lawyers’ fees to straighten this out because that’s who will pay, if at all possible, not the beneficiaries, but you and you’ll be dead!
The Illinois 10-Step Probate Program
[vc_row type=\”in_container\” full_screen_row_position=\”middle\” column_margin=\”default\” column_direction=\”default\” column_direction_tablet=\”default\” column_direction_phone=\”default\” scene_position=\”center\” text_color=\”dark\” text_align=\”left\” row_border_radius=\”none\” row_border_radius_applies=\”bg\” overflow=\”visible\” overlay_strength=\”0.3\” gradient_direction=\”left_to_right\” shape_divider_position=\”bottom\” bg_image_animation=\”none\”][vc_column column_padding=\”no-extra-padding\” column_padding_tablet=\”inherit\” column_padding_phone=\”inherit\” column_padding_position=\”all\” column_element_direction_desktop=\”default\” column_element_spacing=\”default\” desktop_text_alignment=\”default\” tablet_text_alignment=\”default\” phone_text_alignment=\”default\” background_color_opacity=\”1\” background_hover_color_opacity=\”1\” column_backdrop_filter=\”none\” column_shadow=\”none\” column_border_radius=\”none\” column_link_target=\”_self\” column_position=\”default\” gradient_direction=\”left_to_right\” overlay_strength=\”0.3\” width=\”1/1\” tablet_width_inherit=\”default\” animation_type=\”default\” bg_image_animation=\”none\” border_type=\”simple\” column_border_width=\”none\” column_border_style=\”solid\”][vc_column_text text_direction=\”default\”]In Illinois, if a loved one passes away without a will or a trust in place, he or she has died “intestate.” Depending on the size and assets of the estate, probate may or may not be needed. Probate is a court proceeding where the judge appoints an “administrator” to the estate. If a will did exist and was appropriately filed, then the judge would probably appoint the will’s “executor.” The only difference between an administrator and an executor is that one is appointed intestate and the other is designated by a will. The administrator is responsible for paying all just debts and taxes, responding to claims on the estate, and concluding the final affairs of the deceased that includes distributing the assets of the estate. Sounds simple, right? Well, in today’s world, probate can be anything but simple. And unlike New Jersey, where it’s quick and cheap, in Illinois probate is long and costly. For example, the first thing one has to do is to get into court, which requires completing a petition that nominates one person as the administrator. What if Jack’s evil twin, Jill, wants to b administrator, too? Hopefully, Jill knows the slayer statute would keep her from collecting if Jack were to meet an untimely demise. The next to do is provide a list of all the heirs to the judge and prove – with birth and death certificates, and divorce decrees – where the heirship line has been broken. What if Thelma’s mom had 2 husbands and 2 children, Thelma and Louise, but Thelma could only find one set of divorce papers – the set involving the divorce from Louise’s father? And that’s all she’s going to find because Thelma’s mom and her dad were in a common law marriage in Kansas before she moved to Illinois. Let’s say the heir hurdles have been successfully jumped and you’ve been named administrator of grandma’s estate. Next we must notify any heirs and creditors, whether known or unknown, that the estate has been opened. What if Grandma forgot to mention that she borrowed $10000 from Uncle Charlie last Christmas to pay for everyone’s gifts and Uncle Charlie accepted a promissory note with the house as collateral? What if there’s no house but you find that Grandma had 12 different accounts in 12 different financial institutions totaling more than $100,000? Get the petition ready and btw – Illinois does not allow pro se appearances in probate. It is because our families are different, mobile, and complex that trusts are often recommended for individuals in Illinois. However, so we have it on record, the following are steps for opening probate in Illinois: Petition the court Notify eligible potential administrators and obtain consent or waivers from them Pay an oath and bond on the estate\’s personal property Prove heirship Appear in court and receive letters of office Notify known and unknown heirs and creditors Take an inventory of the estate assets File the inventory with surety company and heirs’ fiduciaries, e.g., guardians or conservators Respond to creditor claims Distribute assets after 6 month creditor claim period has ended The entire process from opening to closing probate can take anywhere from 9-14 months and perhaps why the steps involved in establishing a trust should be considered the \”probate-anonymous\” program. [/vc_column_text][/vc_column][/vc_row]
1 Question to Ask Before Saying You Will
A cardinal rule of estate planning is that the “intent of the testator” governs terms of the will or trust. The testator is the person who initially “writes” the will; the name for the person who writes the trust is a “grantor” or “settlor.” Lawyers draw the documents up but testators or grantors are the original writer – our clients. The terms of a will or trust are carried out by a fiduciary – an executor or a trustee. Fiduciaries are held to a higher legal standard of integrity because their roles are considered so important. So they can be sued if they do not follow the “intent of the writer,” so to speak. Yet, though I try to remind them, folks tend to forget about the other fiduciary roles that also carry a kind of “intent of the writer” rule. Let’s consider a brother-best friend story. Carrie was a single 35 year-old woman who, as a young teenager, witnessed her father die an agonizing death when he was stricken with a slowly debilitating and malignant brain tumor. So when Carrie got the bad news about her condition, she got her affairs in order and instead of designating her brother Don as the agent under her healthcare power of attorney, she named her best buddy, Tim. Carrie and Tim were just as close as Carrie and Don but they talked more openly about end-of-life issues ever since Carrie’s father passed. Carrie told Tim that she would never want to die in a hospital like her father and said she knew that she could count on him to fulfill her wishes. Well, Carrie’s days started dwindling and Don pleaded with Carrie to go into the hospital or into a hospice facility. Carrie refused. From her spacious apartment, she could hear birds chirp and children laugh outside. The pain was tolerable and she could move around a little with a cane. Daily care was difficult and speaking was getting even more difficult, but she was staying put. Then one day, Carrie couldn’t talk. Don pleaded with Tim now. Tim looked at his dear friend who had no appetite, occasionally winced at the pain, but smiled at the children\’s laughter underneath her bedroom window. Don wanted Carrie in a facility to be watched 24/7 because he couldn’t do it and Tim could only be with her a few hours a day. Tim agonized because he understood Don’s concerns and really wanted the same thing. But Tim saw Carrie’s smile at the sound of the birds, recalled her horrific struggles with her father’s death, and when Carrie passed on, in her home wearing a slight grin, Tim was also at peace. Healthcare decisions under a power of attorney include end-of-life decisions, and it\’s not just about medicine. But the agent’s role, as a fiduciary, is to step inside the shoes of the principal and make the decisions the principal would make. Doing anything less, even if it means what we would perceive as more and a better quality at the end of life is going against one’s fiduciary duty, ignoring the cardinal rule. So when you’re asked to be a fiduciary, think long and hard and then think again. How well do you know the principal’s shoes and can you stand to completely take yours off to walk in someone else’s?
5 Mentoring Tips from the Grave
As a wills and trusts attorney, frequently, clients or friends ask me how they or their parents can prevent young, adult beneficiaries from wasting their “hard-earned” inheritance. I explain that this can be managed in at least 5 ways: Use hard cold facts and an iron club. Tell them that the money was hard-earned by you and don’t leave them anything but a videotape of the family history. Leave all the money and possessions to charity. Bribe the youngsters and hope for the best. Of course, these are 2 actions that make most lawyers’ skin crawl. Educate the little people from the time they get their first piggy bank from Grandpa. Use conditional provisions that don’t “offend public policy.” This means that, while you can’t disinherit your child from marrying outside his ethnicity and can’t tell him he won’t get a dime unless he divorces his current spouse, you can cut the cord if he becomes a lifetime criminal. You can shorten the cord if she becomes a lifetime substance abuser. And you can make the cord’s length dependent on grades and gainful employment. “Staggered mentoring,” which I’ve mentioned before, is another tool. With a “staggered mentoring” provision, Grandpa leaves Hermoine 30% of her pot of gold when she turns 25, another 30% when she turns 30, and the balance at the age of 35. My favorite is a combination of 3 through 5, but as my favorite contracts professor said, “If it walks like a duck and squawks like a duck, it ain’t a beagle.” So, if Hermoine’s been in and out of jail since the age of 16 and she’s 25 now, education, at least of the financial planning kind, isn’t probably going to work.