In this article, we will discuss the top 5 reasons that you should have an estate plan when you have minor children in Illinois.
Naming a Guardian: The most important concern for most families with minor children is usually naming a legal guardian to be responsible for raising your children should both parents pass away or become mentally incompetent. Most people will name successor guardians to act if the initial choice for guardian is unable or unwilling to act. Guardians are named through a will. Click here to learn more about naming guardians for minor children.
In this article we will explain everything you need to know about Illinois custodianships and the Illinois Uniform Transfers to Minors Act.
What is a custodianship?
The Illinois Uniform Transfer to Minors Act (760 ILCS 20, et. seq.) allows one to transfer property to a minor, subject to the management of a custodian. A custodianship in Illinois is a relationship whereby an adult is given the power to manage a particular piece of property on behalf of a minor until the minor reaches age 21. The transfer is an irrevocable gift, and the minor receives legal title to the custodial property. The minor’s guardian will have no authority with respect to the property.
In this article we will explain how to use special needs trusts in order to maximize social security benefits for individuals with disabilities. This article is the seventh in a series of nine articles explaining the Eight Goals of a Good Estate Plan.
In Illinois, a disabled individual is entitled to receive up to $733.00 per month inSupplemental Security Income (“SSI”) if two things are true:
This article is the sixth in a series of nine articles explaining the Eight Goals of a Good Estate Plan. In this article we will explain estate tax and discuss some tools used to avoid it or minimize it.
What is Estate Tax?
In addition to the taxes that you pay during your lifetime, both the federal and the Illinois state governments require your estate to pay a tax before passing to your heirs. The good news is that both the federal and state estate taxes are subject toexemptions. If the value of your estate is less than the applicable exemption the estate tax in question will not apply. Only amounts over and above the applicable exemption are taxable.
What is a living will? In this article we will discuss using a Living Will to provide for end of life instruction. This article is the fifth in a series of nine articles explaining the Eight Goals of a Good Estate Plan.
In our previous article, we discussed using a Healthcare Power of Attorney to appoint an agent to make healthcare decisions on your behalf if you are mentally incompetent. A Living Will is a tool used to make the decision, while you are still mentally competent, to terminate life-sustaining treatment in the event that you are in an irreversible vegetative state. The Living Will takes this decision out of the hands of your healthcare agent.
How to Prevent a Guardianship Proceeding Using Healthcare Powers of Attorney | Illinois Estate Planning
This article is the fourth in a series of nine articles explaining the Eight Goals of a Good Estate Plan. In this Article we will discuss using Powers of Attorney to avoid the necessity of lengthy and costly guardianship proceedings if you become mentally incompetent.
What is a guardianship proceeding?
If you become mentally incompetent, whether through injury, disease, or simply old age, your spouse or next of kin cannot simply take over the management of your financial affairs and major life decisions. If your loved one would like to sell your house or access your accounts for your benefit, or check you into a long-term care facility, he or she will not be able to do so unless either:
Employing a trust is a wonderful technique to avoid probate, and control your estate beyond the grave. One consideration, prior to drafting a trust, is whether or not to name the trust as a beneficiary for a retirement plan, such as a 401(k), 403(b), IRA, or Roth IRA, and if so, how to properly structure the trust. Although retirement plans achieve the objective of avoiding probate through title if living beneficiaries are named, there are some benefits to naming a trust as a beneficiary. See below for a few advantages and disadvantages of naming a trust as the beneficiary of a retirement plan.
This article is the third in a series of nine articles explaining the Eight Goals of a Good Estate Plan. In this article we will discuss using a trust to ensure that your estate avoids probate when you pass.
If you or a loved one is likely to need long term care within the next few years, you should begin your planning as soon as possible. Because of the high cost of long term care, many individuals rely on Medicaid to pay for this service. As discussed in our previous article, Transferring Assets to Qualify For Medicaid, in order to be eligible to receive Medicaid benefits for long-term care, you must be able to show that you have already "spent down" the majority of your own assets.
We also discussed the 5-year look back period. Generally, if you transfer your assets for less than fair market value within 5 years prior to applying to Medicaid, your eligibility will be delayed by a penalty period. The length of the penalty period will depend on the amount of assets you transferred during the 5 years prior to applying for Medicaid.
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.
A. Distribution of Assets
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:
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. Last week’s “part A” discussed distribution of assets. This “part B” will discuss appointment of Fiduciaries.
This article is the first in a series of nine articles explaining the Eight Goals of a Good Estate Plan. The next eight articles in this series will each examine one of the Eight Goals of a Good Estate Plan in detail and explain the tools we use to accomplish that goal.
The purpose of this article is to provide you with a road map of the goals and the tools we use for each.
Medicaid in Illinois: Protection of the healthy spouse's assets and income | Community Spouse Resource Allowance
Most people are aware that in order to apply for Medicaid for long-term care you are required to spend down the majority of your own assets. In Illinois, in order to be eligible for Medicaid assistance, the recipient must have less than $2,000.00 in non-exempt assets. But what happens when the Medicaid recipient has a healthy spouse? States have recognized that, due to the financial burden of long-term care, there should be a mechanism for one spouse to receive Medicaid benefits while the other spouse (called a "community spouse") retains enough income and assets to live on. This is the purpose for the "community spouse resource allowance" in Illinois.
Illinois Probate: What is the difference between independent administration and supervised administration?
The purpose of this article is to explain the difference between supervised administration and independent administration for probate cases in Illinois. For some foundational information about the probate process, please check out the "Further Reading" section below.
Probate cases can be handled in one of two ways: Supervised Administration and Independent Administration. Supervised Administration requires the executor or administrator of the estate to seek court approval for most decisions that he or she makes. Independent Administration, on the other hand allows the executor to potentially appear in court only twice: once at the opening of the probate estate, in order to be appointed executor; and a second time at the closing of the estate in order to file his or her final report with the court, close the case, and be discharged as executor.
This week, I received the following question from a reader.
Q: Hi I read your blog about funding a revocable trust. My husband and I are talking about getting them, but all we have of significant value (besides house, and a money market ($500,000), is life insurance on his life ($2M). Your article says you should keep the beneficiary of a life insurance policy first to a wife then to a trust. Why?
"Why should I have a Healthcare Power of Attorney?" In this Learn About Law podcast & videoblog, Illinois estate planning attorney attorney Kevin O'Flaherty of O'Flaherty Law discusses how to use Powers of Attorney to avoid costly guardianship proceedings in the case of mental competency.
Special Needs Trusts, also known as Supplemental Needs Trusts, are a tool that allow individuals with disabilities to earn income, accumulate wealth, receive gifts and inheritances, and maintain a quality lifestyle while still qualifying for government benefits.
Many government programs for which disabled individuals may be eligible, such as Supplemental Security Income, Medicaid, subsidized housing, and vocational rehabilitation, require that, in order to receive benefits, the disabled individual must have less than $2,000.00 in assets. Most also require that the individual’s income be less than a certain threshold level.
In this episode of the Learn About Law podcast & videoblog, Kevin O'Flaherty of O'Flaherty Law discusses when probate is necessary in order to administer the estate of a deceased individual. Probate is typically necessary in Illinois when the decedent owns any real estate or more than $100,000.00 of non-real-estate assets outside of a trust. If probate is necessary, then the executor of the estate must receive Letters of Office from the probate court in order to collect the assets of the estate for the payment of creditors and heirs or legatees. If probate is not necessary, then the executor or trustee can administer the estate immediately with the use of a small estate affidavit.
In deciding which attorney to hire, legal skills and experience are prerequisites. The top 3 qualities that set good attorneys apart from mediocre ones, which you can assess early in the relationship are:
Medicaid is a government program intended to pay for long-term care once an individual's assets have been depleted. Elderly individuals who anticipate the need for institutional or in-home long term care may seek to transfer their assets to loved ones prior to applying to Medicaid in order to qualify for Medicaid and avoid having those assets depleted in the course of their long-term care.
However, there is a five-year "look back" period that allows the state to review transfers made 5 years prior to the date that you apply for Medicaid benefits. If an improper transfer of assets was made during this period, a "penalty period" is imposed during which your eligibility for Medicaid will be delayed. The length of the "penalty period" depends on the amount of the transfer. Certain types of transfers are exempt from the "look back" period, and will not delay your eligibility from Medicaid.
What are the Responsibilities of a Trustee When Selling Real Estate? | Illinois Trust Administration
If you are a trustee responsible for the administration of a trust after the passing of a loved one, you have a fiduciary duty to act in the best interest of the beneficiaries of the trust, within the limitations and instructions laid out by the trust document.
If a trust is in place and estate planning has been done properly prior to the death of the grantor of the trust, it should not be necessary to open a probate estate. However, if the beneficiaries disagree with the actions of the trustee, the beneficiaries may open a probate case and seek to make the trustee personally liable for mismanaged assets of the estate.
In a recent article, we explained how Special Needs Trusts, also known as Supplemental Needs Trusts, can be used to allow individuals with disabilities to earn income, accumulate wealth, receive gifts and inheritances, and maintain a quality lifestyle while still qualifying for government benefits.
As explained in that article, assets held by a Special Needs Trust cannot be used on "shelter" or groceries without reducing the amount of SSI benefits that the beneficiary of the trust is entitled to receive.
This article is the last a series of nine articles explaining the Eight Goals of a Good Estate Plan. In this Article we will explain how to use Life Estates and Irrevocable Trusts to make yourself eligible for Medicaid assistance for long-term care without losing your assets and to prevent Medicaid from seizing your assets upon your death.
Assisted living care can be extremely expensive. Fortunately, if you qualify for Medicaid, the government will foot the bill for this care. Unfortunately, in order to qualify for Medicaid, you must show that you have already expended most or all of your assets. You cannot qualify for Medicaid unless you have less than $14,400.00 in countable resources.
This article is the eighth in a series of nine articles explaining the Eight Goals of a Good Estate Plan. In this Article we will explain how to use Family Limited Partnerships and Irrevocable Trusts to protect assets from creditors in Illinois.
Tenancy By the Entirety
In Illinois, a married couple can own their primary residence in a manner called“Tenancy by the Entirety.” Creditors of only one spouse cannot place a lien on property held in Tenancy by the Entirety. This method of ownership is reflected on the deed to the property. It is restricted to married couples’ primary residences. Ensuring that your residence is held as tenants by the entirety, rather than joint tenancy or tenancy in common is a good first step in protecting your assets from creditors.
Illinois Law Blog: Learn About Law
O’Flaherty Law is based in Downers Grove, Elmhurst, and Naperville, Illinois. Our team has expertise in many areas of law including but not limited to bankruptcy law, business & corporate representation, civil litigation, criminal defense, estate planning, divorce & family law, immigration; probate, guardianship & elder law; and real estate law. If you have any questions or would like to schedule a free consultation, please e-mail us at firstname.lastname@example.org or call us at (630)324-6666.
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Located in Downers Grove, Illinois, O'Flaherty Law serves DuPage County, Dekalb County, Will County, Cook County, Lake County, Kendall County, Kane County, McHenry County Winnebago County in Illinois, as well as the following cities: Wheaton, Naperville, Woodridge, Downers Grove, Darien, Willowbrook, Westmont, Lisle, Oak Brook, Warrenville, Glen Ellyn, Aurora, North Aurora, Batavia, Geneva, St. Charles, Lemont, Joliet, Bolingbrook, Plainfield, Crest Hill, Lake Forest, Lake Bluff, Northbrook, Highland Park and Chicago.
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