This article is the second in a series of nine articles explaining the Eight Goals of a Good Estate Plan. This article will explain how an estate plan can help you with the first goal of a good estate plan: Appointment of Fiduciaries and Distribution of Assets. For the sake of readability, I have broken this article into two parts. This “part A” will discuss distribution of assets. Next week’s “part B” will discuss appointment of fiduciaries.
In Illinois, if an individual dies without a will or a trust, state statute determines what will be done with her assets. This is called dying intestate. When an individual dies intestate, the assets will be distributed in equal shares to the first of the following groups that contains a living member:
Often, married couples with children seek to have their assets pass to their spouse and then in equal shares to their children. If these are their wishes, and they do not seek to make any specific gifts of tangible property, their property will likely pass the same way whether or not the couple executes a will or a trust.
However, even in this situation, a will or a trust may be important to ensure that the correct person will be managing the distribution of these assets (discussed below); and a trust may be necessary to ensure that the assets are not reduced significantly by going through the probate process (discussed in next week’s article).Wills and Trusts are important for distribution purposes, if the client:
The following are the most common scenarios in which changing the state statute’s distribution may be of the utmost importance to our clients:
Trusts are also commonly used to allow the spouse in a second marriage to live in the family home without the right to sell it or convey it to her heirs, thus preserving the home for the client’s descendants from her first marriage.
Clients have the ability to be as creative as they would like in directing the distribution of their assets. Almost any scenario that a client can envision can be effectuated through either a trust or a will.
In next week’s article we will discuss the use of an estate plan to appoint proper fiduciaries to handle the distribution of your assets.