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This is a written agreement entered before a marriage that usually deals with what happens to the parties’ assets and income in the event of divorce or death. For instance, it can specify what a surviving spouse gets on the death of the other spouse. It can increase or decrease inheritance rights. To be enforceable each party should have separate legal counsel, each party should make full disclosure of all income, assets and other material facts, and no duress should be involved. This is also called a pre-nuptial agreement.

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In Illinois to make a will a person must be 18 and of sound mind and memory. The will must be in writing and signed by the person making it who is called the testator. It can also be signed by some other person for the testator if it is signed in the testator’s presence and at the testator’s direction. It must be attested in the presence of the testator by two or more credible witnesses. If a witness is also a beneficiary of the will the gift to that witness or his or her spouse is void, unless there are sufficient other witnesses to prove the will. However, the witness may receive as much as the witness would have received if there were no will.

To admit a will to probate each of the two attesting witnesses must state: 1) the witness was present and saw the testator or some person in the testator’s presence and at the testator’s direction sign the will in the presence of the witness – or the testator acknowledged it to the witness as the testator’s act; 2) The will was attested by the witness in the presence of the testator and; 3) The witness believed the testator to be of sound mind and memory at the time of signing or acknowledging the will. The statement of the witnesses can be presented to the court in person, by an attestation clause, which is part of the will, or by separate affidavit presented to the court. The affidavit does not have to be signed when the testator signed the will, but it has to recite the presence of the witness when the testator signed and all the other things required for admission of the will.

Naturally the witnesses have to be competent when they witnessed the will.

Contact Chicago will and trust attorney Don Thompson for more information.

In any trial where a deceased person’s administrator or executor or a disabled person’s or minor’s guardian sues or defends no adverse party or person directly interested in the action can testify on his or her own behalf to any conversation with the deceased or minor or disabled person or to any event which took place in the presence of the deceased or minor or disabled person. There are certain exceptions among which are:

1. When the representative introduces testimony as to the conversation or event.

2. Matters concerning heirship can be testified to.

Of course a person who is not a party and not interested can testify and can be called by the advance party.

Contact Chicago Probate lawyer Don Thompson today to learn more.

The organs, tissues or parts of a decedent’s body may be donated to hospitals, doctors, schools, organ banks or storage facilities, organ procurement agencies or individuals for research, therapy or transplantation. The gift may be made by the decedent while alive or by certain persons in the order designated by statute in the case of someone who has died. The persons who may make the gift in the order they may act are:

1) agent under power of attorney for health care;

2) designated health care surrogate at the time of death;

3) guardian of person at the time of death;

4) spouse;

5) any adult child;

6) either parent;

7) any adult brother or sister;

any adult grandchild;

9) a close friend who can provide an affidavit demonstrating facts showing the relationship and familiarity with the decedent’s health, social history and religious and moral beliefs;

10) guardian of estate at the time of death;

11) anyone authorized to dispose of the body.

If the decedent expressed a desire not to donate or there is reason to believe the gift is contrary to the decedent’s religious beliefs or a person with priority objects, the gift cannot be made. Only persons in the highest priority class available can consent.

The decedent, while living, can make the gift (to take effect on death) in a will or any writing. The writing need not be witnessed or delivered. The donee does not have to be identified. In the absence of specification of the donee, the attending physician at death may accept the gift. The donor can designate the doctor who will carry out the gift.

When someone other than the decedent makes the gift the gift must be made in writing or a recorded message.

Paying or even offering to pay for an anatomical gift is a misdemeanor and a felony if repeated, at least if the payment is to the donor or persons making a gift of a decedent’s organs. Whether or not payment to family members who are not involved in the consent is permissible has not been decided.

Contact Chicago probate lawyer Don Thompson today.

This refers to preventing creditors from getting your assets. There are no magic techniques. A variety of techniques are used which may include:

1. Transferring your assets to your spouse – or someone else who is cooperative. There is an unlimited gift tax exemption for transfers to a spouse.

2. Tenancy by the Entireties. This is a type of joint tenancy between married people for their residence. The creditors of one spouse cannot levy on the residence as they can when it is owned in an ordinary joint tenancy.

3. Putting your assets into a form exempt from execution by judgment creditors. A good example is a retirement plan or IRA (in Illinois.) Another exempt asset is life insurance payable to a spouse or dependant, including the cash value. (Creditors can levy on distributions from these plans or insurance).

Read more about asset protection or contact Chicago business lawyer Don Thompson and see what he can do for you.

The state dictates who gets your property and who will be the administrator (manager) of your estate and who will be guardian of your children if your spouse has already died and who will be your guardian if you are disabled.

If you die without a will survived by a spouse and children, the spouse gets one-half and the children get the rest. There are no exceptions.

Guardianships are expensive and time consuming and if money or property is involved court approval is needed for everything.

All your property must be collected and sold unless all the beneficiaries agree to keep it. The family business or farm must be sold.

There is no provision for professional management of your estate.

There will be probate of your estate if it exceeds $100,000. This is court determination of who is entitled to your property and supervision of its collection and distribution.

Taxes may be a lot higher.

Contact IL Estate Planning Attorney Don Thomson Today.

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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.

The transfer can be accomplished by any written document which is effective to transfer title. The Act covers all types of property, including real estate.

The transferor, an adult member of a minor’s family, a minor’s guardian and the minor if over 13, have various rights to an accounting and to enforce the terms of the transferor.

The custodian is obligated to invest and reinvest the custodial property as would a prudent person of discretion and intelligence who is seeking a reasonable income and the preservation of capital, although the custodian may keep it in a bank account. The custodian who does not take compensation, is not liable for investment losses unless they result from bad faith intentional wrongdoing or gross negligence or failure to meet the standard of investing required by the Act.

The custodian is not personally liable for custodial contracts if the custodian makes clear that the custodian is contracting in the custodial capacity.

The custodian is entitled to reimbursement of expenses and reasonable compensation.

When the minor reaches age 21 in the case of gift transfer, or age 18 for some other transfers, the custodianship terminates and the ex-minor holds title in his or her own name.

During the custodianship the custodian can pay the custodial assets to the minor or pay them to third parties for the minor’s benefit. The standard is what the custodian considers advisable for the use and benefit of the minor.

This Act allows parents to make yearly gift tax exempt gifts to their children without creating expensive trusts. The drawback is that the children get the assets without restriction at age 21. The Act also allows smaller amounts to be distributed from estates or trusts to custodians for minor beneficiaries without guardianships or trusts being set up.

To learn more contact Chicago estate planning lawyer Don Thompson.

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Trusts can be contested on some of the same grounds wills can be contested, namely –

1. Forgery

2. Fraud or duress

3. Lack of mental capacity

4. Undue influence

There is generally no time limit on contesting trusts other than the equitable doctrine of laches. However, if the trust is a revocable inter vivos trust (created while the grantor was still alive) to which the grantor’s will makes a gift, the six month from date of admission of the will limit applies if the will is admitted to probate.

The Dead Man’s Act does not usually apply to trust contests because the decedent’s administrator or executor is ordinarily not a party.

Learn more at Chicago Probate.

These are trusts designed to own or be the beneficiary of life insurance or both. They usually contain certain technical provisions governing the trustee’s powers concerning life insurance. One kind is revocable, designed merely to provide for estate tax savings by using the marital deduction and credit against tax and to provide for management of the insurance funds by someone other than the beneficiaries. The insured can retain the right to change beneficiaries and to borrow against the policy if it has cash value. The insured’s will very often pours over all other assets to this trust when the insured dies.

The other kind is an irrevocable life insurance trust. The insured gives up all rights over the policy and transfers it to a trust of which he or she is not trustee or a beneficiary. The object is usually to remove the proceeds from the taxable estate of the insured and sometimes the surviving spouse as well and to provide for trustee management of the proceeds. Special provisions of a technical nature called Crummey powers can be used to allow yearly gifts to the trust up to $5000 per trust beneficiary to be made free of gift tax to pay premiums on the policy. The gift tax is avoided on transfer of an existing policy into the trust by borrowing against the policy’s cash value of the policy. Frequently a new policy is purchased and transferred to the trust so there is no gift tax problem on creation of the trust.

NOTE: There currently is no Federal or state estate tax or generation skipping tax. The gift tax is still in effect. Whether or not the estate and generation skipping taxes will be reinstated this year is not known. Many people expect that they will be reinstated, but what will happen is not known. What the rates and exemptions will be if the taxes are reinstated is also not known.

To learn more contact Chicago estate planning lawyer Don Thompson.

The just-enacted Tax Relief, Unemployment Insurance Authorization, and Job Creation Act of 2010 makes great strides against the Federal estate tax burden that otherwise would have taken hold January 1, 2011.   The “exemption equivalent,” the amount of property an individual can leave free of estate tax, increases to $5,000,000.  The top estate tax rate is capped at 35%.  And the Act includes an unexpected provision to help a married couple make full use of each spouse’s exemption equivalent.

When a spouse dies, the surviving spouse succeeds to sole ownership of the couple’s marital property.  By virtue of the marital deduction, there is no estate tax.  At the surviving spouse’s death, the property passes to the couple’s children.  But there is no marital deduction at the surviving spouse’s death, and the surviving spouse’s estate is fully subject to estate tax except for that spouse’s exemption equivalent, $5,000,000.  The exemption equivalent of the first spouse to die is wasted.

To be assured of making use of each spouse’s exemption equivalent, each spouse needed a revocable trust, funded with at least the exemption equivalent amount of property.    Each trust would provide that if the settlor (creator of the trust) leaves a surviving spouse, the trust breaks into a marital trust and a credit shelter trust.  The credit shelter trust receives the first amount of property in the settlor’s revocable trust at his of her death up to the exemption equivalent in effect at his or her death.  All of the income of the marital trust is distributed to the surviving spouse.  The surviving spouse may be given the right to withdraw principal from the marital trust.  At the surviving spouse’s death, the remaining property in the marital trust passes either (1) as appointed by the surviving spouse, if the marital trust is a “power of appointment” trust, or (2) to the persons designated in the settlor’s trust document, if the marital trust is a qualified terminable interest property  (“QTIP”) trust  and the settlor’s personal representative has filed a QTIP election for the marital trust with the IRS.

Read full story or contact Chicago estate planning lawyer Don Thompson for help with planning an IL estate.