Last Will & Testament, Powers of Attorney, and Trusts
A Last Will & Testament in Illinois is a legal document that directs how his/her final estate should be distributed upon death. A person who makes a Will is called the testator (male) or testatrix (female). The purpose of creating a Will is to provide clear instructions on how to disperse fiduciary assets/funds, real and personal property, and even digital property among any designated beneficiaries. The purpose is also to provide an individual with the ability to ensure loved ones inherit the portion of the estate that was intended or to disinherit a specific individual. If a person dies without a Will, Illinois succession laws determine who inherits the deceased’s property when there is no Will in place. There are specific statutory requirements for a Will to be valid and binding. Don’t leave your estate to chance, contact an attorney at FMGR today to work on your estate plan.
Powers of Attorney
A Power of Attorney (POA) is simply a legal authorization for one person to act for someone else. The POA gives an agent, or attorney-in-fact, the authority to act. The agent might have broad powers under a General Power of Attorney, or very narrow authority under a Limited Power of Attorney. POAs can be used for property, finances, investments, medical care, just to name a few.
Trusts
A Trust is a legal entity with separate and distinct rights, similar to a person or corporation, that has been established to manage personal or real property. When a Trust is created, a party known as a trustor or settlor gives another party, the Trustee, the right to hold title to and manage property or assets for the benefit of a third party, known as the beneficiary or beneficiaries. Individuals often create Trusts to provide legal protection for assets to ensure the assets are distributed at a later time, sometimes upon death or a loved one reaching a specific age, according to the Trustor’s or Settlor’s wishes. Trusts are frequently chosen to save time, reduce paperwork, and potentially reduce inheritance or estate taxes.
If you are named to serve as a Trustee of a Trust or as a personal representative of a decedent’s estate, you may face many complicated responsibilities. We can assist and advise you by, among other services, handling the following: preparing estate and inheritance tax returns; post-mortem estate planning, such as the use of disclaimers; probate administration, including appointing personal representatives and preparing and filing accountings and inventories; trust administration; re-titling and transferring assets to trusts and other beneficiaries; preparing trust and estate income tax returns; and transitioning businesses to the next generation. Contact FMGR if you have been named Trustee or desire to consult with an attorney about establishing a Trust for yourself or your loved ones.
FMGR can also assist families with estate planning for those with disabilities. We prepare and administer Special Needs Trusts. We can develop an estate plan through the preparation of a Special Needs Trust which will protect public benefits eligibility.
When should a Special Needs Trust be set up?
Parents may consider setting up a Special Needs Trust, also referred to as an SNT, when they begin their estate planning such as drawing up wills. If their child with a disability will likely have long-term medical or support needs, the SNT can be a vehicle to supply the funding to provide lifetime quality care. Even if the child’s future prognosis is unclear, it is never too early to put plans in place for contingencies such as the parents’ sudden death or disability.
How is a Special Needs Trust set up?
The laws governing trusts are complex and are subject to changes in legislation that may vary by state and which could affect a person’s eligibility for government benefits. New laws have considerably tightened the eligibility criteria for receiving government benefits, and thus have affected many aspects of Special Needs Trusts (SNT). These regulations are complex and require a knowledge of the current legislation and how it impacts people planning for their child with special needs in order to preserve eligibility. Setting up a special needs trust requires coordinated planning with an attorney knowledgeable in special needs planning.
When a parent or grandparent dies, additional assets can be distributed under a Last Will and Testament, to the SNT. A percentage of shares in an estate can be left to a child’s SNT. Funding can come from discretionary contributions while parents are alive, probate distributions, a living trust, life insurance, pension plan, or other sources. Therefore, the individual with a disability does not have to be left out of a Will, but should have their share of inheritance directed to his or her SNT. In the case of a life insurance policy, pension plan, or other source that would go to a beneficiary on death, the child’s SNT should be the beneficiary.
Managing the Special Needs Trust
Having a SNT requires that a trustee be appointed. A trustee is one who manages another’s property and may be a person or an institution such as a bank. In this case, the trustee is the manager of the trust and has general unlimited discretions to use trust proceeds provided for the needs of the individual with a disability. The trustee may be given full discretion to manage the money in the trust and to decide how the money is used for the person’s benefit. The SNT should be drafted in such a way as to direct the trustee how to use the trust’s resources for the individual’s needs.
Trustees should have good money management and/or financial skills. The SNT will likely exist for a long period of time. Trustees should be chosen with longevity in mind, and the trust itself should be drafted to adjust to changing circumstances, such as the substitution or removal of a Trustee.
After the death of the individual with a disability, the trustee oversees the final arrangements and the SNT usually ends.
Contact FMGR to discuss all your estate planning options including a Last Will & Testament, Powers of Attorney, Living Trusts, Health Care Surrogates, or to create or administer a Trust.
