Estate Planning and Probate
Our firm handles Estate Planning matters which is the area dealing with the distribution of an individual's property at his or her death, taking into account wills, taxes, insurance, property, and trusts so as to gain maximum benefit of all laws and, at the same time, carrying out the person's wishes. Probate is the court proceeding through which a will is proved to be valid and the estate of a decedent is administered. The process, generally, includes collecting a decedent's assets, liquidating liabilities, paying necessary taxes, and distribution of property to heirs.
Estate Planning Questionnaire
1. What is the purpose of an estate plan?
An estate plan ensures that your family and financial goals are met after you die.
2. What does an estate plan generally include?
A basic estate plan includes a will, power of attorney for property, power of attorney for health care, a living will. You also must consider both federal and state laws governing your estate.
3. What do your assets generally include?
Your assets generally include your business interests and/or real estate, insurance policies, investments, retirement savings, and personal property.
4. What is the purpose of a will?
A will tells everyone specifically how you want your assets to be distributed when you die. It is equally important, if not more so, to let everyone know who your want to be the guardians of your children. When someone dies without a will, also known as dying "intestate", it can be costly to your heirs and does not allow for you to have a say as to how your assets will be distributed. Even if you have a trust, you still need a will to take care of any holdings that are held outside of the trust when you die.
5. What is the purpose of the Powers?
A Power of Attorney for Property allows you to appoint an agent who can act for you in order to handle your financial affairs. The importance of creating a Durable Power of Attorney for Property is to insure that if, for any reason, you are incapable of handling your own financial affairs due to accident, illness, or unavailability, the person you name (your agent) can step in and handle these matters for you. The Power of Attorney for Property will allow your agent to deal with those assets which have your name on the title such as assets you own in your own name, in joint tenancy or tenants in common with others.
A Power of Attorney for Health Care allows you to appoint an agent who can make health care decisions on your behalf. The Durable Power of Attorney for Health Care includes the right to make medical decisions, to withdraw life support, and to authorize the donation of vital organs. This document transfers the responsibility of withdrawing life support systems from the attending physician to the person designated as agent once the physician has determined that there is no hope of recovery. It lifts from the shoulders of the physician the potential liability for withdrawing life support.
6. What is the purpose of a trust?
Trusts are legal mechanisms that allow for you to put conditions or "strings" on how and when your assets will be distributed upon your death. They also allow you to potentially reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay, and publicity of probate court, which administers wills. Some trusts also offer greater protections of your assets from creditors and lawsuits.
7. What is the federal estate tax exemption?
The federal estate tax exemption - the amount you may leave to heirs free of federal tax - is $12,060,000 in 2022 until 2025.
8. How much can I leave to my spouse tax-free?
You may leave an unlimited amount of to your spouse tax-free, but this isn't always your best course of action. By leaving all of your assets to your spouse, you don't use your estate tax exemption and instead increase your surviving spouse's taxable estate. That means your children are likely to pay more in estate taxes if your spouse leaves them the money when he or she dies. In addition, it defers tough decisions about the distribution of your assets until your spouse's death.
9. What two simple ways can I reduce my estate taxes?
You may give up to $12,000 a year to an individual (or $24,000 if you are married and giving the gift with your spouse). You may also pay an unlimited amount of medical and education bills for someone else if you pay the expenses directly to the institutions where they were incurred.
10. Is there a benefit to donating to charities?
If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given both before and after you die.
11. What is Probate?
Probate is the court administration of an estate at death. Probate becomes necessary when you die owning assets titled in your individual name and which have no beneficiary designation. The idea behind probate is that, since you are not here to sign your assets over to your loved ones, the courts must oversee that process. Even if you die with a valid will (testate estate), the will does not avoid probate. The will acts essentially as a letter of instruction to the court defining who you want to administer your estate (your executor) and to whom you want your assets distributed (your beneficiaries). If you do not have a will (intestate estate), the state in which you resided at the time of your death has laws that will determine the administration and distribution of your estate.
12. How does the probate process begin?
The executor must first file the will. The court process is usually initiated by an attorney, who prepares appropriate documents for filing with the court. If the judge finds everything to be in order, he or she will admit the will to probate and issue Letters of Office to the executor named in the will, or to an Administrator if there is no will. The executor or administrator then has authority to access the decedent's assets to pay bills, taxes and ultimately make distribution of the remaining assets. Publication of notice of these proceedings is posted in a local newspaper, and anyone with standing has a right to contest the will and the proceedings. In Illinois, the estate must remain open for at least 6 months to permit creditors of the estate to file their claims.
13. How long does the probate process typically take?
It typically takes 9 months to as long as 2 years to conclude the administration of an estate. It is not unusual for the cost and expense of probate to average 3% to 10% of the value of assets being probated.