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FREQUENTLY ASKED QUESTIONS: WILLS & TRUSTS

Question: Do I need a will?
Answer: Most people need a will in order to provide for the passing of their assets following their death, as well as to name their executors and the guardians of the estates and persons of their minor children.

Question: What happens if I die without a will?
Answer: State law will determine the division of your property among your heirs. If you have children, your spouse will receive one-half of your estate and your children will receive one-half, divided in equal shares between and among them. There may be a conflict among your heirs as to who should be your executor, and if your spouse does not survive you, who should be the guardian of your children.

Question: Will I have to pay estate taxes?
Answer: As an Illinois resident, persons with estates having a value of in excess of $4 million, will pay estate taxes on the excess amount. However, if the persons dies with a surviving spouse, any amount which qualifies for the marital deduction that is provided for the surviving spouse will be deducted from the amount of the taxable estate. There is a federal estate tax which is assessed against estates in excess of $11.18 million. The federal estate tax also includes a marital deduction for any amount left to the surviving spouse which qualifies for the marital deduction.

Question: Does having a will avoid probate?
Answer: No, having a will does not avoid probate. However, if a person has a will, the probate can be much less costly if certain provisions are included in the will.

Question: What does it cost to do a will?
Answer: The cost of the will is dependent upon the specific needs and desires of the person making the will. Usually, after an initial consultation, the cost can be determined.

Question: How do I avoid probate?
Answer: A very effective way of avoiding probate is creating a living trust. There are other ways to avoid probate which are dependent upon an individual’s choices.

Question: What is a trust?
Answer: There are many different types of trusts. The most common type of trust is a living trust. A living trust is a document which sets forth the terms and provisions concerning the management and distribution of a person’s assets during the person’s lifetime and upon the person’s death. Usually, the person who creates the trust is also the initial trustee of the trust. Therefore, that person continues to maintain control over their assets as if they were registered in that person’s name.

Question: Do I need a trust?
Answer: That is a question that should be taken up with your attorney.

Question: What is “Tenancy by the Entirety?
Answer: “Tenancy by the Entirety” is a means of holding title to residential property in which married people reside. It is only available to married persons. If a married couple holds title to their home as “tenants by the entirety” then judgment creditors are not able to satisfy a judgment against only one of the married persons.

Question: If I put my son or daughter on my bank account for convenience, will my other children share in the balance in the account at my death?
Answer: Under Illinois law, the surviving joint tenant of a bank account becomes the sole owner of the account upon the death of one of the joint tenants. Unless the surviving joint tenant agrees to share equally with his or her siblings, the other children will need to go to court in order to prove that the account was set up in joint tenancy as a convenience. The presumption is against such a finding, but it is rebutted upon clear and convincing evidence, which is tantamount to the criminal standard of “beyond a reasonable doubt.”

Question: Will my heirs pay taxes on the proceeds of my life insurance policies?
Answer: The proceeds of a life insurance policy are not ordinarily subject to income taxes. However, they are added to a person’s estate for Illinois and federal estate tax purposes and may be subject to such taxes.

Question: What does an executor do?
Answer: An executor manages the estate of the decedent through probate.

Question: Whom should I appoint as my agent under my power of attorney for property?
Answer: Someone who you trust implicitly and who is familiar with financial matters.

About Alan Sohn

Alan E. Sohn received his Juris Doctorate from the College of Law of the University of Illinois. Mr. Sohn has been a partner in both large and smaller law firms and for the past 21 years has been in private practice. Mr. Sohn - Chicago Estate Planning Lawyer and Business Attorney - is admitted to practice law by the Illinois Supreme Court, the Trial Bar of the United States District Court for the Northern District of Illinois, Seventh Circuit Court of Appeals and the United States Supreme Court. He is also a member of the Chicago Estate Planning Council and the Illinois State Bar Association.
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