Kendall County Estates and Trusts Attorney
TRAGEDY AND ESTATE PLANNING: URGENCY OF ESTATE PLANNING
At the end of the day today, I got a strange phone call. An unknown person called me saying her name and stating that it was urgent that I speak with her. My receptionist took the message because I figured it was a sales call or a creditor of one of my probate calls attempting to secure a conversation with the attorney. Unfortunately, a former client of mine (hereinafter referred to as “Jack” and his real identity has been changed for privacy purposes) died of a heart attack in his middle forties last night. It was his wife who was battling him in divorce court who was panicking because she wanted to know whether he had a will or whether I knew whether he had life insurance or any proceeds.
Unfortunately, my answer was “no” on all accounts. My former client was a common person just like everybody else that worked hard and was busy. To be truthful, this former client did not have enough money to finalize his contested divorce. Furthermore, I addressed another urgent matter today as well. I do a lot of real estate documents for a small title company and one of their financial institutions had a client that lost an ex-fiancée after co-signing a mortgage with him. For this example, I am going to call him, John (names and facts have slightly been changed to protect identifies). Unfortunately, John had their primary residence titled as “tenants in common”.
Tenants in common is the type of ownership by two or more persons where each person’s interest in real estate passes to their heirs. Under Illinois Probate Law, when a decedent does not have a surviving spouse nor children, the parents and siblings split equally the estate when a person does not have a will. In John’s case, his fiancée, Becky, was survived by her parents and two sisters. Thus, there was a total of four (4) heirs of the decedent Becky. In this example, John owned a one-half interest in his property and the four (4) heirs of Becky owned a one-half interest in the property (upon a probate). John’s major problem was he wanted to refinance his property with the financial institution and John now has a major title issue. Becky deceased about five (5) years ago and John just got the bad news. Essentially, John owns a mortgage on his house and cannot sell his property without having the four (4) heirs of Becky sign an affidavit of heirship or go through the probate process. The naïve approach is assuming that the heirs of Becky will be willing to execute an affidavit of heirship and a quit claim deed to John without being compensated. The common answer is it is the right thing to do since Becky and John secured a mortgage together without being married. Becky and John planned on getting married and Becky deceased prior to their wedding in her middle forties of a heart attack.
Now, John has a property which has equity and he has a lot of credit card bills. John was planning on refinancing his mortgage and getting money to pay off his credit card bills. John’s day and week has been destroyed. John realizes that he cannot sell his house or refinance his house unless his ex-fiancée’s family signs over their interest in his property. Moreover, John has the prospect now of hiring a probate and litigation attorney to resolve this issue. Unfortunately, from a legal perspective, this situation may be impossible to solve because John likely does not have the money for a pro-tracted legal battle. Attorneys and court costs are expensive. John may face the reality like people every day that have real estate, personal property, and/or other property that cannot be given to them because they either cannot afford the legal fees to solve the problem or the person or persons decide that the rewards are not worth the risks and costs. Simply put, real estate and/or assets that can be rightfully owned after the probate process goes unclaimed. This happens daily, and it is the cost of failing to plan an estate or having an inadequate estate plan.
EXPERIENCED YORKVILLE, PLANO, AND OSWEGO PLANNING LAWYER: INGREDIENTS FOR A SOLID ESTATE PLAN IN YORKVILLE, ILLINOIS
A solid estate plan consists of four estate planning tools. The first estate planning tool is a Living Trust or otherwise known as a Revocable Living Trust. A Revocable Living Trust is an estate planning strategy that avoids probate court because the assets of the person are owned by a Living Trust and not the individual themselves. A Living Trust is a powerful estate planning tool because it involves incapacity and death planning. Unlike a Last Will, a Revocable Living Trust that is properly funded does not have to undergo a court process called “probate court”. Probate court is the court which is responsible for determining heir disputes and determining who is the rightful owner of a person’s estate upon death. The second estate planning tool is a Pour Over Will. A Pour Over Will is like a Last Will, but instead of being the only death planning document, the Pour Over Will transfers all a person’s assets to their Living Trust. Thus, a Pour Over Will transfers a person’s property upon their death to their Living Trust. A Pour Over Will is designed for assets that may not have had a beneficiary or failed to be transferred into the Living Trust’s name. The Pour Over Will is a contingent plan to address an unexpected event, which was unplanned.
The third estate planning document is called a Durable Power of Attorney for Property or otherwise known as a “Illinois Statutory Short-Form Power of Attorney for Property”. For simplicity purposes, we will call these documents the “financial power of attorney”. A financial power of attorney appoints an agent to make financial decisions for a person in case of an emergency or incapacity. Generally, there is a springing provision which appoints the attorney-in-fact or agent to make financial decisions in the case of an incapacity determined by a physician. One of the common traits of a failed estate plan is failing to provide a contingency plan in case the first one or two beneficiaries or agents are deceased or unavailable for any reason. A major reason for probate and real estate problems is a failure to plan a primary or contingent beneficiary (or second contingent beneficiary). The basis of a solid estate plan is planning. Planning helps with the assistance of an experienced estate planning attorney.
The fourth type of estate planning document is called a “Durable Power of Attorney for Healthcare or an Illinois Short Form Power of Attorney for Healthcare. For simplicity purposes, we will call the final estate planning tool as a “Healthcare Power of Attorney”. A person appoints an agent or attorney-in-fact to make health care decisions when they are incapable of making their own healthcare choices. Generally, a Living Will may also be created in combination with a Healthcare Power of Attorney. Again, the Healthcare Power of Attorney has a springing provision which requires a physician to state that the person lacks the mental capacity to make their own healthcare decisions.
EXPERIENCED YORKVILLE PROBATE AND LIVING TRUST COUNSEL AND GUIDANCE FOR ESTATE PLANNING MATTERS
In conclusion, people procrastinate and find reasons to delay their estate plan. Daily, I am reminded of the urgency of now. Young and middle-aged people are experiencing strokes and death too prematurely. Estate planning is simply planning for your family to have your financial affairs in order. Sean Robertson and Robertson Legal Group, LLC are passionate about helping people with their estate plans. Planning an estate plan is an example of love. Loved ones hurt upon tragedy and a failed estate plan adds to this agony. Instead of mourning a person’s death, a person is calling an attorney’s office desperate for answers. Prayers and answers are often delivered, but at times, prayers and answers are unanswered and bad news are delivered. Today’s point is the urgency of now and planning one’s estate plan and estate. An estate plan is part of a person’s legacy. Quite frankly, an estate plan also means that minor children will have life insurance proceeds to assist the surviving spouse provide a good life for their children. A planned estate is evidence of love.
Sean Robertson is a graduate of DePaul University College of Law and University of Illinois at Urbana-Champaign. Sean Robertson has over fourteen (14) years of experience as an estate planning and asset protection attorney. Sean Robertson concentrates in assisting families with their Wills, Trusts, Special Needs Trust, and Powers of Attorneys for Property and Healthcare. Sean Robertson is passionate about guiding families with their estate planning legal needs. Sean Robertson may be reached at 630-882-9117 or via online contact form.