Thursday, May 17, 2018

What Happens When You Die Part 3

In the last installment (Part 2) we discussed the role of the Personal Representative in an estate administration. So, if there is a Personal Representative appointed for the estate, what does the Attorney do?

In practice, the attorney prepares documents for the Personal Representative. These may include Petitions, Affidavits, Notices, Accountings, Reports, Letters, etc. The laws of the State place many requirements on the Personal Representative, and the process of administering the estate must be followed. 

The attorney is available to guide the Personal Representative through the process of administering the estate of the deceased. As indicated in previous posts, the probate process is a procedure that is very foreign to most people. An experienced probate attorney can answer questions as the process moves forward and help the Personal Representative avoid potential pitfalls.  

As an example, a beneficiary may contact the Personal Representative and inquire about their distribution from the estate. The Personal Representative would be well advised not to distribute any funds from the estate until the claim period runs. (More to come on this later.)  

As with all cases, issues do arise, and the attorney is responsible for guiding the Personal Representative through the process. Sometimes the attorney can take on tasks that the Personal Representative may not be able to accomplish or has not been able to accomplish. For instance, some institutions or governmental agencies are very difficult to deal with. (The IRS immediately comes to mind.) It is sometimes much more expedient for the attorney to deal with these individuals than have the Personal Representative make multiple calls to resolve an issue.  

Many times, the attorney can attempt to mediate family disputes as an uninterested third party. This usually relieves the Personal Representative from having to deal with these types of issues in an already stressful time.  

The attorney's role in the process is varied, but it can be extremely helpful. I am somewhat biased, but the guidance and advice of an attorney throughout this process is indispensable. 

In Part 4 we will discuss how claims against the estate may arise, how they get satisfied, and their timing.    

Thursday, May 10, 2018

What Happens When You Die Part 2

In Part 1 we outlined the road map for this blog series. Today we will focus on the role of the Executor/Administrator of the estate of the deceased.

A person's Last Will & Testament typically makes a nomination as to who the deceased wants to act as the Executor or Personal Representative of the Estate. Usually the document will make a backup designation for that position and waive certain statutory requirements for the Executor, such as waiving the posting of a bond, which is otherwise required to ensure the Executor does not misappropriate the funds.

When the deceased died without a Will, the Personal Representative of the Estate is known as an Administrator. The law dictates who will have preference to act as Administrator and the formalities that the Administrator must follow in order to act. Typically a spouse would have priority to act, and then the children of a deceased. Again, these default provisions may not be what the deceased would have wanted, but a Will is the only way to make nominations different from the State defaults.

Once a Personal Representative is appointed, they have several responsibilities. These responsibilities vary depending on the assets and debts of the deceased and who the beneficiaries will be. Some of these tasks include:

- Determining and notifying beneficiaries and creditors of the opening of the estate
- Notifying financial institutions of the death of the account owner
- Taking possession of real and personal property of the deceased
- Collecting any income due to the deceased
- Publishing a notice in a local newspaper
- Paying debts and taxes of the deceased
- Selling or transferring real estate and personal property
- Distributing all assets left after payment of debts and expenses

In Illinois, this process will take at least six months to finalize. However, a diligent Personal Representative can have the estate ready for distribution within that timeframe.

In the next installment, we will discuss the attorney's role in assisting the Personal Representative in the estate administration process.

Thursday, May 3, 2018

What Happens When You Die Part 1

One of the certainties in this life is that we will one day die. What happens when we are gone depends greatly on what we did while we were alive. For the purposes of this post, I will leave the philosophical debates on the issue for another time and just focus on legalities.

When someone passes away, it puts into motion a series of events that attempt to finalize the affairs of the deceased on Earth. These include making notification to loved ones, funerals, burials, etc.—all that fun stuff that nobody wants to talk about but is inevitable for all of us.

One thing that seems like a mystery to those who do not have experience with it is the probate process, the legal process most commonly used to wind up and distribute the assets of the deceased. Through this series of posts, I hope to demystify this process.

Usually, when I meet with a loved one of a deceased, the first question I ask is whether or not the deceased had a Last Will and Testament. If so, the deceased is referred to as having died "testate." If not, the deceased died "intestate." When the decedent had a Will, I will read through the document to get some guidance on the course the probate process should take. When they do not, we must turn to the laws of the great State of Illinois. (I live and practice in Illinois, so this post is state specific.)

In the absence of a Will, the decedent has adopted the estate planning of the ever brilliant state lawmakers. The statutes give precedence to certain individuals to act as the Administrator of the Estate. They also dictate where the assets of the decedent should be distributed. At the risk of spoiling one of the overall takeaways of these posts, the default State rules usually are not desirable.

In the next installment, we will explore the role and difference between an Executor and an Administrator.

Wednesday, April 11, 2018

How Often Should I Review My Estate Plan?

There is no hard and fast rule about when an estate plan should be reviewed. However, with the new tax laws going into effect this year, it is probably as good a time as any.
As with any major life event, changes in the tax laws affect us all. For many Americans, an eleven million dollar estate tax exemption amount per individual means very few citizens will need to plan to avoid federal estate tax. However, there is a punitive State estate tax in Illinois, and that exemption amount is far less. The State estate tax lacks what is called “portability.” Without proper planning, you may be saddling your survivors with a large State tax liability that could have easily been avoided. 
What should you be reviewing? First and foremost, you need to make sure the estate plan still accomplishes the goals that were set out. Do my assets go where I want? Are my loved ones protected and will they be taken care of?

Next, are the individuals appointed to fill positions still able to do so? Are they alive? Are they capable? Do I still want those people to fill those roles? Your sister, who was your best friend but hasn’t spoke to you in five years, may not be the right person to raise your kids anymore.

Finally, you should make sure your assets are owned in a way that does not thwart your planning objectives. And consider: Do I want to make any gifts while I’m alive?

An estate plan is not a “set it and forget it” deal. It is ever evolving and always needs to adapt to changing life circumstances. An hour reviewing the plan with a competent attorney could save you or your loved ones a lot of time, money, and effort in the long run.

Wednesday, January 24, 2018

Guardians for Children

If you have children, once or twice every year or so you may have a minute of quiet reflection. In that excessive downtime, you may find yourself wondering who would take care of those precious bundles of concentrated energy if something happened to their parents. 

Those blessed to reside in the Utopian State of Illinois can control their own destiny with that determination. (Nobody tell Mike Madigan we are still allowed freedoms and have money that is not paid over to the State.) 

The Probate Act allows a parent to designate, in writing, who they would like to act as Guardian of a minor child if the minor child does not have a living parent. This written nomination must follow certain formalities, and including it within the terms of a Last Will and Testament meets those formalities. 

The laws of the State differentiate between a Guardian of the Person and a Guardian of the Estate.  The Guardian of the Person essentially steps into the caretaker role of a parent. This would be the person who takes the kids to school, feeds them, clothes them, bathes them (more accurately, argues with them until they finally surrender and take a bath), takes them to the doctor, etc. The Guardian of the Estate handles any assets that the minor owns, inherits, or comes to own until they reach the age of majority (18). There is another law that allows a Guardian of the Estate to hold assets until the minor attains the age of 21, but that is a topic for another day. 

A parent can nominate the same individual to act as the Guardian of the Person and Estate, or they can nominate different individuals for each position. For example, Aunt Suzie may be a wonderful caretaker of the children, but she would probably manage to spend the minors' inheritance before they attain the age of...tomorrow. In that scenario, a different nomination for the Guardian of the Estate would probably be smart.   

Whenever I draft a Guardian designation in a Will, it is always my hope that it will never be necessary. However, in this uncertain world, there is some peace of mind in having at least made the nomination, just in case. 

Monday, January 1, 2018


As I looked through my camera roll for the past year, I was reminded of many things. First of all, I do not take many pictures, and the ones I take are not great. But, more importantly, I was reminded of all the positive and great things that happened in my life the last 365 days.

If you are anything like me, I sometimes (a lot of times) forget the positive, and get caught up in the negative. Sometimes the negative seems all consuming. We are bombarded with negative news stories and articles. After all, negative and tragic gets pageviews.

What sometimes gets lost in the overhyped negative is the good and the positive, which I believe continues to far outweigh the negative. The most tragic moments seem to bring out the best in people. 2017 has certainly seen its share of bad and negative.  But, in the face of the bad and negative, people have banded together to support and help. This proves to me that the good and positive is still winning.

I’m certainly not going to sit here singing koombaya and pretending bad things don’t happen. They have, they do, and they always will. There is evil in this world, and sometimes unexplainable, unimaginably bad things happen to good and innocent people.  That said, my hope and prayer for 2018 is that, God-willing, the good and positive will continue to tip the balance in its favor and that we all be reminded that the good is still winning.

Wednesday, August 9, 2017

Make A Will Month

I recently read that August is National Make A Will Month. I have not received any greeting cards yet, so I figured I would write a blog post to mark the occasion.

Estate planning attorney Gerald M. Condon stated, "You really don't know your children - until they divide their inheritance." Mr. Condon passed away several years ago, but I imagine he was not one to leave anything to chance when he did.

I have written fairly exhaustively on the importance of planning for one's inevitable demise on this blog along with how to get started doing so. However, Mr. Condon brings up an interesting question: How can I assure the transition of assets is seamless when I am gone?

The very simple answer: Plan and Communicate.

Some of the biggest arguments I have witnessed in administration of a decedent's estate deal with tangible personal property that has only sentimental value. The cost of those arguments, in both time and expense, far exceeds any financial value of the item.

Arguments among heirs, especially with respect to items of nominal financial value, could easily have been avoided if the deceased had better communicated their intent. A meeting with a parent and their children while the parent is still alive is a great way to hash out who wants what. At the same time, it is a great opportunity for a parent to set expectations: "You have drained money from me your entire lives, I'm giving everything I own to the animal shelter when I die. I have always liked dogs better than people anyway." Perhaps the direction will be more loving than the example, but setting an expectation is always key.

Also, make sure you have competent people set to take responsibility for Trust/Estate administration when you are gone. Evaluate their capacity to effectively handle assets and understand a somewhat complex process. Jimmy, who is 45, stays out all night, and lives in Mom's basement, may be your oldest and best friend, but he may not be who you want handling your affairs when you are gone.

Finally, point your appointed representatives in the right direction for assistance when the time comes. They very well may need the assistance of an attorney, CPA, land appraiser, auctioneer, banker, etc.

Plan and Communicate.  Seems like a good slogan for life.