There is a training exercise that is used to demonstrate the way that information can get distorted if it changes as it is passed down along the line. The facilitator will whisper a brief anecdote in the first person’s ear, and it is passed along down the line confidentially from person-to-person.
When the last person has heard the story, they are asked to share it out loud. Invariably, it is quite a bit different than the original message that was conveyed to the first person.
This phenomenon definitely enters the picture when it comes to certain aspects of the estate planning process that apply to the process of probate.
When someone passes away without a will or any other estate plan, the estate is called an intestate estate. In Illinois, when the probate. assets are over $100,000, the probate court must supervise the estate administration process.
The probate court would appoint a personal representative to act as the administrator, and the administrator would take care of the tasks that must be completed to administer the estate. The administrator will notify creditors, pay final debts, and prepare the assets for distribution to the heirs.
This is a time-consuming process, and at the end of it, the assets will be distributed according to the intestate succession laws of the state of Illinois. It is very possible that the distribution of the assets would not be in accordance with the true wishes of the decedent.
You should definitely have a will or trust in place to prevent intestacy so you can decide how your assets will be distributed. Unfortunately, some people are of the mistaken belief that they will also avoid probate as long as they have a will. In fact, this is not the case at all if your assets are worth more than $100,000. If you have a will, it will be admitted to probate, and the executor will complete the same tasks that would be assigned to the administrator. The major difference is the simple fact that the decedent’s actual wishes would be honored with regard to the distribution of the inheritances.
We touched upon the fact that probate is time-consuming, and no inheritances are distributed while the estate is being probated. The exact duration will depend on the circumstances, but it will usually take somewhere between eight months and a year in most jurisdictions.
When you read news pieces about the inheritances that were left by celebrities, did you ever wonder how the press gets this information? They can obtain probate records, because this is a public proceeding, and you don’t need press credentials to access the information.
Expenses that accumulate during probate include a filing fee with the court, potential legal and accounting charges, bond fees, the executor’s payment, appraisal charges, liquidation expenses, and incidentals. As money is spent, the estate gets smaller and smaller.
Revocable Living Trust
As you can see, you cannot avoid probate if you use a simple will. A living trust is an alternative that will facilitate asset transfers outside of probate, and this is just one of the benefits.
You would act as the trustee while you are alive, so you would have total access to your property at all times. This would be a revocable trust, so you can rescind the trust and take back direct personal possession of the property if you choose to do so.
A significant percentage of elders become unable to handle their own affairs eventually, and you can account for this when you have a living trust. You can name a disability trustee to step into the role if it ever becomes necessary.
When you have a living trust, you can include a spendthrift clause that would protect certain beneficiaries from their creditors. You can prevent careless spending if this is a source of concern because you can instruct the trustee to provide limited incremental distributions.
If you and your spouse own most of your property jointly, and you are going to leave your respective interests to one another, a shared living trust can be a turnkey solution. You would be co-trustees, and the surviving spouse would become the sole trustee.
Each person would be able to convey their separate property into the trust as well, and different beneficiaries can potentially be named.
Attend a Free Workshop!
Now that things are getting back to normal, we are conducting live, in-person workshops again, and it is great to be able to interact with our neighbors face-to-face.
The sessions are free, and you can visit our Naperville, IL estate planning workshop page to see the dates and obtain more information.