Estate planning is the process of preparing the distribution of one’s assets in the event of incapacity or death.
An estate plan provides for the efficient and protected transfer of the deceased’s assets to his or her beneficiaries with minimal impact by estate and gift taxes, as well as makes provisions for the special needs of the family. Perhaps most importantly, an estate plan avoids probate litigation, where the validity of a will is challenged.
In Illinois, estate planning benefits anyone who wants to control what happens to his or her assets. Estate planning is especially important for parents and small business owners.
At Stern Perkoski Mendez in Evanston, Chicago and Lake Forest, we pride ourselves on thorough and careful estate planning, which includes the drafting of a will, the establishment of applicable trusts, the execution of powers of attorney and, if need be, the formation of a corporation.
A will is one of the most basic, yet most important, components of an estate plan. A will addresses the disposition of an individual’s property upon his or her death and has broad powers in granting and qualifying the property rights of the beneficiaries. A will may be modified at any time prior to the death or incompetency of the testator (the individual who creates the will).
Trusts and Custodianships
- Revocable Trusts — Revocable trusts grant the trustee title to a piece of property, while permitting the grantor to retain control over the trust and receive benefits from the property during his or her lifetime. True to its name, revocable trusts may be revoked or modified during the grantor’s lifetime.
- Living Trust — A living trust, also known as a inter vivos trust, permits the distribution of assets during the grantor’s lifetime.
- Land Title Trust — A land title trust may hold one or more parcels of real estate, with the designated beneficiary receiving the income, rent and proceeds from any sale. The beneficiary interest in a land title trust may be gifted or bequeathed by the owner—and may be done periodically and in small increments—while permitting the trust title holder to retain control of the property.
- Totten Trusts — A Totten trust is a trust unique to savings accounts whereby the trustees retain full control over the account and its assets during their lifetimes, with the account passing to the beneficiaries upon the death of the last trustee.
- Transfer-On-Death Registrations — Similar to a Totten trust, this form of ownership applies to securities, including brokerage accounts, as well as property and business interests. The trustee retains full control over the securities or accounts during his or her lifetime. Upon the death of the trustee, the beneficiaries retain joint ownership of the securities until divided or sold.
- Uniform Transfers To Minors Act — The Uniform Transfers to Minors Act permits the transferor to give property to a minor while naming a custodian to care for and maintain that property. Typically, the designated property must be given to the child once they turn 21.
Powers of Attorney
- Power of Attorney For Property — A power of attorney for property permits a designated party to control and dispose of the property of the principal.
- Power of Attorney For Healthcare — A power of attorney for property permits a designated party to make healthcare decisions for the principal, giving him or her similar powers to those possessed by the principal.
There are some assets, including small businesses, that are best transferred by way of a family limited partnership or family LLC. An existing entity may be reincorporated or ownership may be transferred from an individual to a family corporate entity.