by Michelle Fabio, Esq.

It’s a given that you should have a written legal document distributing your assets at your death. Now the question becomes: should you have a will or living trust?

It is estimated that only about 20% of Americans have living trusts. So should you join that 20 percent?

Here are our top reasons why a living trust could just benefit you.

What is a living trust and how is it different from a last will?

A living trust (sometimes called an “inter vivos” or “revocable” trust) is a written legal document through which your assets are placed into a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by your chosen representative, called a “successor trustee.”

On the other hand, a will is a written legal document with a plan of distribution of your assets upon your death. Your executor, as named in the will, oversees this process, and notably, nothing in your will takes effect until after you die.

1. A Living Trust Avoids Probate

One of the first benefits of a living trust is that it avoids probate. With a valid will, your estate will go through probate, the court proceedings through which your assets are distributed according to your wishes by the executor.

A living trust, on the other hand, does not go through probate, which often means a faster distribution of assets to your heirs—from months or years with a will down to weeks with a living trust. Your successor trustee will pay your debts and distribute your assets according to your instructions.

Notably, both documents allow you to choose a guardian for your children in the event of your death.

2. A Living Trust May Save You Money

Remember this really all depends on your financial situation. At first, drafting a living trust will likely cost more than drafting a will as it is a more complex legal document. Moreover, you must also transfer your assets such as bank accounts, stocks, and bond accounts and certificates to the trust through separate paperwork; simply writing up a living trust does not actually “fund the trust.”

Other procedures involved in an estate plan with a living trust could also include changing the beneficiary on your life insurance policy to the trust, appropriately dealing with your IRA or 401(k) plan, and also creating a “pour-over will” that will provide for the distribution of any assets acquired after the creation of the living trust but before your death or any assets inadvertently excluded.

Note that the pour-over will, just like any will, will have to go through probate.

While a will costs less to draft, a living trust can save your estate money at the time of your death as the distribution of assets in the trust will not go through probate; court costs for probating your will are taken from estate, although note that for a simple, uncontested will, costs are often nominal.

Regarding contests, living trusts will likely hold up better in the event that someone comes forward contesting the distribution of your assets; accordingly, court costs to cover any will contests may also need to be considered.

As far as savings of income and estate taxes, there is often no substantial difference between living trusts and wills, although living trusts may provide savings for married couples in the form of joint living trusts.

Note that for people with simple estate plans and for young married couples with no children or significant assets, a living trust is probably not financially beneficial.

3. A Living Trust Provides Privacy

One big difference between the two legal documents is the level of privacy offered with a living trust. As a living trust is not made public, upon your death, your estate will be distributed in private. A will, on the hand, is public record and so all transactions will be public as well.

Another difference is the handling of out-of-state property you own upon your death. With a will, that property will have to go through probate in its own state; a living trust can help you avoid probate.

What other benefits does a living trust provide?

Beyond the top three main benefits, another benefit is that a living trust is written so that your trustee can automatically jump into the driver’s seat if you become ill or incapacitated.

On the other hand, if you simply have a will without a durable power of attorney, the court will appoint someone to oversee your financial affairs who will have to report to the court for approval of expenses, sales of property, etc. One widely reported public example of this is the conservatorship of Britney Spears’ father over his daughter’s financial affairs.

Note that if you draw up a durable power of attorney, including one for health care decisions, you can avoid a court-appointed conservator for your affairs.

With a living trust, however, your handpicked successor trustee can manage your affairs without court intervention, and since the trust is revocable, if you dispute your incapacity, you can retain control yourself.

While a living trust makes sense for some people, wills are just fine for others. A general rule among tax planners is that the larger the value of the estate, the greater need there is for a living trust—although even this is not foolproof.

The post The Top Three Benefits of a Living Trust appeared first on Libertyville Layer - Dan Sugrue.

With no wife or children, first in line, according to estate law, are Prince’s six siblings. Under simple court rules governing inheritances when there is no will, each of the siblings will get an equal share. That will apply whether Prince was fond of each of the siblings or not. And with Prince’s complex estate, massive business dealings, his practice of secrecy and millions in wealth at stake, attorneys don’t expect this case to culminate quickly or simply.

“It’s ironic,” said Avi Kestenbaum, a New York estate planning attorney with Meltzer Lippe. “Prince, at age 57, spent 37 years making his legacy. He fought the music industry for control, and now he has no control.”

It’s a lesson for other people, whether rich or poor, famous or regular. When you die without a will, you get no say. If you hated a relative, your children might end up in that person’s care. If you divorced and forgot to take a previous spouse’s name off an account or insurance policy, your new spouse or children might not benefit. If you have a business, and children with no interest in it and no business savvy get control, the value of your life’s work could be destroyed.

The post Prince’s death shows why you need a will appeared first on Libertyville Layer - Dan Sugrue.

Included among these are:

Homestead exemptions of up to $15,000

Some items of personal property, including:

Prepaid tuition

Cemetery funds

Motor vehicles up to $2,400

Clothing, school books, family pictures, personal injury settlements up to $15,000

85% of earned, but unpaid wages

401ks, IRAs and Roth IRAs

Public employee pensions

Social Security, unemployment, and workers comp benefits

Alimony and child support

Life insurance benefits, homeowners insurance benefits (up to $15,000)

Health and disability benefits, and a wildcard category of personal property up to $4,000.

Of course, these are only some of the exemptions that could be available to you. It is strongly recommended that you consult with a local bankruptcy attorney for Cook County or Lake County to go over your own personal situation.

The post What exemptions are available when you file for bankruptcy in Illinois? appeared first on Libertyville Layer - Dan Sugrue.

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The appellate court ruled that the administration of a decedent’s estate is a creature of statute, that the Court has the power to appoint an administrator, that the administrator has a right to be represented by counsel, and that counsel has a right to collect a reasonable fee for his services. Where the administrator of an estate has to perform a statutory duty, the expense of performing that duty is an administrative expense and should be charged against that estate. Since Mr. Zagaria was missing far more than seven years despite a diligent search for his whereabouts, the presumption of death entered by the Court was valid, and thus the administrative expenses of the estate were legitimate.

The post What happens when you administer an estate for someone who turns out to be alive? appeared first on Libertyville Layer - Dan Sugrue.

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This case involves a decedent who passed away, leaving a will, where an executor was properly appointed by the probate court. A claim was subsequently filed against the estate asserting that the decedent, who was a builder, sold him a house with a number of latent defects in 2005, four years before the decedent passed away. The claim also asserts a breach of the seller’s warranty of habitability in relation to those defects. The administrator filed a motion to dismiss, asserting that the underlying claim was barred by the statute of limitations, in that the claimant did not assert the date in which the defects were noticed in order to demonstrate that the claims were timely filed. The administrator also claimed that her warranty of habitability was not an issue because the claimant still lived in the house. The court granted the motion to dismiss.

Justice Schostak, in her opinion, stated that claims against estates in probate court do not have the same pleading requirements that are necessary in civil pleadings, and that it was not necessary for the builder to state when the defects were originally noticed in the initial claim against the estate. The fact that the claimant still lives in the house is not a sufficient defense on it’s own to defeat a claim of a breach of the warranty of habitability, especially when the claimant had undertaken repairs at his own expense. The was remanded back to the circuit court.

The post Claims against the Estate in Probate not subject to the same rules of procedure in civil proceedings appeared first on Libertyville Layer - Dan Sugrue.

In short, the main argument presented by the defendant-appellants, was that the original note upon which the loan originated was not made available to the defendants during the foreclosure proceeding. In the minds of the property owner appellants, this somehow disposes of the mortgage foreclosure suit. Perhaps this line of thinking had some merit before the advent of the copy machine and the fax machine. But today, copies of documents, or simply affidavits by the parties attesting to the relevant facts are more than enough. In the end, the number of frivolous arguments and delaying tactics were too much for this court and it imposed sanctions as an appellate court upon the Defendant-appellants.

The post Illinois Real Estate Law-Foreclosure defendants received sanctions for frivolous pleadings appeared first on Libertyville Layer - Dan Sugrue.

In this case, the attorney, Steven Miner, was a close family friend of the decedent, Glenn Burren, as well as his attorney.In January 2004, Glenn signed a will appointing his attorney Steven as the executor. In addition, the will bequeathed the entire estate to his three children and Steven’s two children in five equal shares.  In the years before Glenn passed away in 2007, he had had written checks totaling almost $500,000, payable to Steven.

After Glenn passed away, Steven petitioned the court to appoint him as executor under the will, which the court did. Glenn’s heirs contested the will and filed a petition to recover assets against Steven. The trial court ruled in favor of Glenn’s heirs, finding that there was a rebuttable presumption that Steven exerted undue influence over Glenn, in that Steven, as his attorney, had a fiduciary relationship with Glenn, Steven benefitted substantially from that fiduciary relationship, and Steven was instrumental in executing the will which benefitted him. Steven was unable to provide clear and convincing evidence that the decedent acted independent of his influence and that he did not receive a substantial benefit from the relationship.

The post Probate Law-Another reason not to appoint your lawyer as the executor of your will appeared first on Libertyville Layer - Dan Sugrue.