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Persons with larger estates should review their estate plans at a set time each year. Estate plans are prepared on the basis of certain things. As these things change, so should the plan. Births, deaths, changes in marital status, changes in law, changes in residence, changes in wealth, changes in the composition and titling of one’s assets are all things which can require estate plan changes.

For help with your estate planning matters, call Don Thompson at 312-201-1436 or email him at donthompsonlaw@sbcglobal.net.

Estate Planning starts with an analysis of —

• Your assets
• Your liabilities
• Your present and future needs and desires
• The present and future needs and desires of your family and relatives
• Your and their future prospects.

Estate planning consists of planning and structuring your assets to meet those needs and desires. Some of the considerations are –

• Determining who is to get your assets
• Naming the executor of your will
• Naming the trustee of any trusts you may create
• Naming the guardian of your children, if both you and your spouse die
• Naming someone who will care for you and your assets if you are disabled.

Wealth building

• Providing for your children’s education
• Providing insurance coverage for illness, disability or death
• Providing for investment and management of your assets after your death
• Tax planning to reduce income and estate taxes
• Avoiding probate.

These are often used in estate planning when businesses or farms are involved, especially if there are other owners. All the owners agree to buy out the interest of any owner who dies. This provides cash to the estate of the dead owner for what might otherwise be an unsalable asset and protects the other owners against having to deal with a new owner who they may not want. Sometimes these agreements provide for carrying life insurance to pay for the buy-outs. Buy-outs are also frequently provided for under these agreements if one of the owners wants to sell to an outsider or becomes disabled. These agreements are also sometimes used to fix the price at which shares of the business are valued in the dead owner’s taxable estate.

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Common estate litigation involves disputes over the validity of a will or the meaning of a valid will. There are also disputes over who the heirs or legatees are or over who owns property claimed by the estate. Litigation where an interested party charges the executor or administrator with wrongdoing is also common.

There are also suits by estates to recover amounts owed or for wrongful death. Similarly there are suits against estates for amounts owed or for property damage or personal injuries.

The only common denominator is the expense. Litigation is very expensive. Unfortunately litigation involving family members is often not rational and the costs escalate way out of proportion to the amount involved. One way to avoid family litigation is to consult everyone about everything and to act only when there is some kind of consensus.

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The
representative (administrator or executor) of an estate can sue in any court for property taken from the decedent. A
summary procedure is also provided for in a supplemental proceeding before the same probate court handling the estate.

The representative can file a petition for a citation either to discover property or to recover it.

The court orders the citation to issue commanding the person to  whom it is directed to appear and respond and the citation is served on the respondent by the Sheriff just like any  other lawsuit. Any interested party can also bring a citation against the representative.

ABATEMENT

When an estate is not large enough to pay all the expenses, taxes and gifts in a will then there are rules to determine which payments will decrease or "abate". Generally residuary bequests abate first. These are gifts of "everything else" or "the balance of my estate". Then general legacies abate pro rata and then specific legacies abate pro rata.

Trusts for pets are now enforceable in Illinois. Before recent legislation providing for this such trusts were problematic in that the beneficiary (the pet) could not sue to enforce the trust and no one else had a right to after the grantor’s death.  Visit Chicago Wills, Estates &Trusts for more information.

Minors do not have legal capacity to contract or deal with assets. They have no capacity to sue or be sued. For this reason minors do not usually hold title to property in their own name. Instead title to a minor’s assets is usually held by a guardian or property is given to a trustee to hold for the benefit of the minor. Guardianships and trusts are expensive and for that reason, among others, are not suitable for smaller amounts of money or other property. For this reason Illinois and most other states have statutes similar to the Uniform Transfer To Minors Act.

In Illinois the Act allows a transfer to be made to a custodian for the benefit of the minor. The Act specifies the consequences of the transfer and the rights and duties of the parties. There are no documentation requirements beyond the form of the transfer itself. There are particular requirements for different kinds of property, but generally the document of transfer must state that the transfer is being made to a named custodian to hold for a named minor and the document must state the transfer is being made under the Illinois Uniform Transfers to Minors Act.

The transfer can be made to any adult or a trust company except in certain cases such as a transfer from a trust or estate where the adult must be a member of the minor’s family. The transferor can be the custodian.

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Chicago Estate Planning attorney Donald M. Thompson is licensed to practice law by the Supreme Court of Illinois, U. S. District Court in Chicago, U. S. Circuit Court of Appeals for the 7th Circuit, and the U.S. Tax Court. He is a member of the Federal Trial Bar. He is a 1966 graduate of the University of Chicago Law School where he was in the top quarter of his class and received the Mandel Legal Aid Award. He was assistant professor of law at I.I.T.-Chicago-Kent College of Law from 1966 to 1970 teaching tax and property subjects.

He is a member of the Chicago, Illinois State, American and 7th Federal Circuit bar associations. He serves on the Chicago Bar Association’s tax, trust probate, securities law and corporation law committees and is past chairman of the corporation law and legal education committees.

He is a member of the Chicago Bar Association’s estate planning, probate, corporation and tax referral panels. He is an Arbitrator for the National Association of Securities Dealers and the Circuit Court of Cook County.

There is a yearly exclusion from gift tax of $11,000 per year per donee in 2003 (the amount rises periodically). This applies only to gifts of present interests. A gift in trust is not considered a present interest. For instance there is a gift in trust if you give money to a trustee to hold and pay the income to grandchildren each year until the youngest reaches 25 when all the rest of the trust assets are distributed to them. Since the grandchildren cannot get the trust assets presently, this is not considered a present gift.

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