ESTATE PLANNING QUESTIONS AND ANSWERS
What is a Will?
A Will is a written document explaining how you want your possessions and assets to be distributed after you die. A Will is put into effect at your death. You can change your Will at any time, as long as you are legally competent to do so. Your Will is filed with the Court after your death and becomes a public record.
How do I know if I need a Will?
If you have assets and want certain people or charities to inherit those assets, you should have a Will.
Why should I make a Will?
You should make a Will so that your estate is distributed in accordance with your wishes. Since a Will has no effect until you die, you cannot personally direct the distribution of your estate. A Will must be properly executed to be valid. If you have a Will which is not properly executed, you are deemed to have died without a Will. Letters, notes, computer entries, or other informal documents stating how you want your estate divided are not a valid Will and have no effect on the distribution of your estate. If you have minor children, you should also make a Will to name the person you want to be your children's custodian.
What makes a Will invalid?
There are many reasons a Will could be invalid. One of the common ways a Will is invalid is because it was not properly signed and witnessed. Illinois is clear about the requirements for a Will: it must be signed by the Testator (the person signing the Will) in the presence of two witnesses, and the witnesses must also sign the Will on the same occasion.
Why can't I just cross something out on my old Will and change it?
You cannot make any marks or changes to your Will once it has been signed and witnessed. If you do, you invalidate your Will because your changes are not properly witnessed according to Illinois law. If you want to change the terms of your Will, you must execute a new document.
What is a Power of Attorney?
A Power of Attorney is a legal document that gives another person the right to act on your behalf under certain circumstances. A Power of Attorney can be for a limited purpose such as signing documents for you when you are out of town, or for general purposes (such as managing your financial affairs if you become unable to do so). Some Powers of Attorney deal specifically with making medical decisions.
What are the two main types of Power of Attorney?
A FINANCIAL Power of Attorney allows you to name a person to manage your bills and investments for you.
A MEDICAL Power of Attorney allows you to name a person to speak with your doctor or other health care providers.
Does a Power of Attorney Expire?
Unless the Power of Attorney gives a specific expiration date, the Power of Attorney remains valid until you die.
What does "Durable" mean?
If a Power of Attorney is "durable," this means that the person to whom you give your power can make decisions and act on your behalf even if you become disabled. One type of Durable Power of Attorney does not become effective until the Principal (the person giving the power) becomes incapable of managing his or her affairs. Having a Durable Power of Attorney can sometimes avoid the need to have a Guardian appointed.
What is a Health Care Directive or Living Will?
A Health Care Directive, sometimes called a "Living Will," or a "Directive to Physicians," is a written statement of your wishes in the event you are in a "persistent, vegetative state" (such as a coma).
What is "Joint Tenancy with Right of Survivorship"?
If you own property in "Joint Tenancy with Right of Survivorship," you own the property equally with another person and each person is entitled to the asset. When you die, the other person inherits that asset immediately, without a probate. A common example of Joint Tenancy with Right of Survivorship is a bank account in the names of both a parent and an adult child. Both people are owners of the account, and either one of them can withdraw money from the account at any time, even if one has not deposited money in the account. When one person dies, the other person becomes the sole owner.
When preparing your estate plan, you should check to see if any of your assets are held in Joint Tenancy with Right of Survivorship, as these assets will pass to the "Joint Tenant" and will not pass according to your Will.
What does a bank "Pay on Death" account mean?
"Pay on Death" accounts are more restrictive than Joint Tenancy with Right of Survivorship accounts. If you have a bank or investment account that is Pay on Death, you are the sole owner of the account during your life. When you die, your designated beneficiary inherits the account. You designate the beneficiary when you open the account. The beneficiary takes the money in the Pay on Death account and this money is not controlled by your Will.
Can Estate Planning help my estate avoid paying estate taxes?
To a certain extent, yes. A qualified estate planning attorney can explain different options for distributing your estate and can help reduce the amount of tax your estate will pay.
Can't I just give everything away before I die?
"Gifting," which is giving property and money away while you are alive, is a technique that can reduce estate taxes. If you gift more than $14,000.00 to a single person in a calendar year, you must file a gift tax return with the IRS. Before you give property or money to someone, consult with a qualified estate planning attorney and a Certified Public Accountant.
Where should I keep my estate planning documents?
The originals of your estate planning documents, such as your Will, Powers of Attorney and Health Care Directive, should be kept in a fireproof, locked container. You may store them in your safe deposit box or a fireproof safe. If you do, it's a good idea to give access rights to one other person so that when you die, that person can retrieve your Will.
How much will estate planning documents cost?
The cost for estate planning documents varies depending on the complexity of your estate and your estate planning goals. I will discuss fees with you on the telephone and can usually provide you an estimate.
Is it really worth the expense to have an attorney prepare my estate planning documents?
Yes. Not only does having a complete professionally prepared estate plan give you peace of mind, it will reduce the costs of administering your estate after death. It will make the probate process easier for your loved ones.
Why can't I just use the forms I found on the internet?
The forms you find online are too general for most people to accomplish their estate planning goals. A qualified estate planning attorney can write documents specifically for your particular situation.