Below is a breakdown of what you need to know about the features of wills and trusts. For a more in depth discussion of the subject, please visit our estate planning resource page or view the video of our recent estate planning seminar, the remaining portions of which can be viewed on our YouTube page.
Consequences of Intestacy in Illinois (No Estate Plan):
Probate: Probate case must be opened
After opening the probate case with the court, the personal representative takes the following steps:
inventory and collect the decedent’s property
pay any debts and taxes
distribute the remaining property to the beneficiaries
Estate is diminished by attorney fees
Heirs do not have immediate access to assets
Bond: Executor must pay surety bond to probate court
Distribution: Assets are distributed according to state intestacy laws
Advantages of a Will over Intestacy
Waiver of Bond: Although estate will still go through probate, the executor’s surety bond can be waived
Distribution: Assets are distributed according to decedent’s wishes
Guardianship: Ability to name a guardian for minor children
Advantages of a Revocable Trust over a Will
Probate Avoidance: Any assets transferred to a trust during your lifetime will avoid probate at death
Diminished attorney Fees
Immediate access to assets
No need to appear in court or obtain court approval for payment of debts, distribution, and termination of the trusts
Disability Planning: A revocable trust allows a trustee to manage a disabled client’s trust assets without the need to resort to guardianship arrangements, which can be expensive
Confidentiality: Unlike a will, a living trust is not filed with the probate court when the client dies. Therefore, the details of the client’s estate plan do not become a part of the public record.
Protection from Renunciation: Under Illinois law, a surviving spouse may renounce a will and elect to take a third of the estate (half if there is no descendant after payment of creditors). Trust assets are not included in the estate for this purposes.
Financial Control: By properly drafting your trust, you can ensure that the assets in question are distributed in a financially responsible manner to your heirs
Note: Wills DO have some advantages over trusts
Ability to Select a Fiscal Year: The estate can select a fiscal year, while the trust must be a calendar-year taxpayer.
Shortened Claims Period: Probate shortens claims period from two years to six months – For professionals who have personal exposure for their work, probating may be desirable.
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