Estate Planning is the process of looking at one's financial situation, preparing a plan for how income and property will be handled if a person should become disabled or die, and signing legal papers to implement the plan.
Most people are concerned about what will happen to their property when they die. If a person does not decide who should inherit from them and sign the appropriate legal documents, the law will "fill in the blanks" and make the decision for them. Under Illinois law, if a person dies without a will, or without some other legal mechanism for designating who will inherit from that person - such as naming a beneficiary on a bank account, insurance policy, or in a trust - that property will go to family members called "legal heirs."
For example, under Illinois law, property will go to the husband or wife of the deceased upon death, unless the deceased also has children, in which case only 50% goes to the husband or wife, and the other 50% is divided among the children. If the deceased person has no husband or wife, 100% is divided equally among the children. If the deceased person has no spouse and never had any children, the property goes to the parents and brothers and sisters, in equal shares. There are other legal rules governing who will inherit if certain family members died before the deceased person, or if none of the relatives listed above remain.
What Is a Will?
A will is a written statement directing who will wrap up the financial affairs, and who will receive someone's money and other property when the person passes away. The property left in the deceased's name at the time of death is called the "estate." The people named in the will to receive property upon the decedent's death are called "legatees." They may or may not also be the "legal heirs."
What is a Living Trust?
A "living" or "intervivos" trust is one that is set up and funded while the grantor is alive. Usually the grantor names himself or herself both trustee and beneficiary. In contrast, a trust which comes into being under the terms of a will, after the grantor's death, is called a "testamentary" trust.
One might set up a living trust to provide for a smooth transition to another trustee or beneficiary upon his or her death or incapacity. If the beneficiary of the trust dies, the property in the trust can pass to another beneficiary without the need for probate court proceedings. A living trust can also help avoid the need for appointment of a guardian. Where the grantor/trustee becomes incapacitated, a successor trustee can take over management of the trust.
What are Guardianships?
Parents or other family care givers may worry about who will care for, and protect, disabled children or adults, when the parents are no longer able to do so, either due to death or any other event which renders them unable to continue in their role as protector and/or care giver. It is especially important to assure that someone who has the knowledge, experience, and motivation, to adequately identify the disabled person's needs, and to find, and arrange for, the services necessary to meet those needs, can step in when needed.
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