Estate Planning Questions and Answers
Q. What is a will?
A. A will is a written legal document with instructions for distributing an individual's assets after his or her death. A will must be formally executed as required by state law to be legally valid and enforceable.
Q. What is a trust?
A. A trust is a legal entity created to hold assets for the benefit of another person or entity. There are many types of trusts that can be used to achieve a person's or entity's estate planning objectives.
Q. What is a living trust?
A. A living trust, also called an inter vivos trust, is a trust which becomes effective during the lifetime of the person who created it. Because a living trust typically contains instructions for managing trust assets during the creator's lifetime, as well as instructions for distributing trust assets upon the creator's incapacity or after his or her death, a living trust usually eliminates the need for guardianship or probate proceedings.
Q. What is a revocable trust?
A. Often called a "living" trust, a revocable trust is the most flexible way to own property and is commonly used to avoid probate in the event of death or disability.
Q. What is a Durable Power of Attorney for Health?
A. A Healthcare Power of Attorney is a document wherein you name an individual to make medical decisions and act on your behalf if you are unable to do so.
Q. What is a Durable Power of Attorney for Property?
A. A Durable Power of Attorney for Property is a document that gives power to an individual that you name to act on your behalf for financial purposes.
Q. How often should I review my Estate Plan?
A. Generally, every five years. However, if you have a significant change in your family or financial situation, or if there are significant changes in tax or property law then your Estate Planning documents should be reviewed.
Q. Do wills help you avoid probate?
A. No, nor do wills help in the event of your disability. The provisions and powers authorized in a will do not take effect until the testator's death.
Q. If I don't write a will, does more of my estate go to the government?
Q. When is probate required?
A. Assets in the decedent's name alone, with no joint tenancy and no beneficiary designation, must go through the probate process to determine who is entitled to receive them. If some assets must be probated, that does not mean that every asset the decedent owned is subject to the probate process -- only those assets in the decedent's name alone need to be probated.
Q. Is there a mechanism to avoid probate for small estates?
A. Yes. In Illinois an estate of less than $100,000.00 not containing real property can be collected through use of a document known as a Small Estates Affidavit.
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