Wills & Trusts

Wills / Living Wills / Trusts / Powers of Attorney / Powers of Attorney for Health Care / Powers of Attorney for Property

A will is a document that tells a person’s family or heirs and the courts how to distribute his or her money and property.  A will is a basic estate planning tool, and a current and valid will is the best way to make sure your property is distributed according to your wishes and your family is taken care of after you’re gone.

Many people also use trusts in conjunction with their will, as an independent estate planning tool, or both.  Whether you want to prepare your first will or you are interested in updating your estate plan or exploring trusts, an attorney at the Steele Law Firm can help you tailor a plan to your needs.  Divorcing families often require updated financial plans, and we continue to work with you after your divorce to ensure that your estate plan and will are updated to preserve the property that we’ve worked so hard to protect during the divorce process.

Wills

A will is the most basic estate planning tool.  It is a piece of paper in which you tell your friends and family who you want to give your money and property to, and it can address a wide range of personal and financial matters. In Illinois you must be 18 or over and of sound mind and memory to make a valid will. 

A will is always helpful, however, there are some situations when a will is necessary. You should write a will if:

• You want to leave any of your property someone who is not a member of your immediate family. For example, if you want to leave a gift to the church, a friend, or a relative who would not inherit under Illinois law.
• You want to leave a family member, such as a child, more or less than he or she would get under Illinois law. This might be because one of your children has special needs that require a larger gift, or may no longer be close to you so that you might want to leave them nothing.

Under Illinois Law, there are some things a will can and cannot do.  A will:

• Can say who gets what
• Can choose executor and guardian for kids
• Can waive surety on executor’s bond (a surety is an insurance company which agrees to pay if executor defaults - quite expensive)
• Can direct executor to take specific action he might not otherwise be able to take (retain family company)
• Can give some property free of debts and other property subject to debts
• Can make gifts of specific items to particular people
• Can make conditional gifts (i.e., to X if he does something and if he does not to Y) - it must be a legal condition
• Can disinherit wife or kids
• Cannot defeat wife’s right to take against will.  She can elect to take what will gives or one-third of the probate estate if there are descendants or one-half if there are no descendants.
• Cannot defeat spouse’s award, which is in addition to what will gives spouse, of amount necessary for support for nine months - at least $10,000 plus $5,000 for each dependent child.

If you die without a will, your property will be divided up according to Illinois law.  Under this formula the first $10,000 of your estate goes to your spouse (if he or she is still alive). The rest of your property is divided between your spouse and your children. If you do not have a living spouse, then your property is divided among your children.

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Living Wills

A living will records health care decisions regarding terminal illness and life-support options.  It is also known as a “health care directive.”  It is a basic form that says that if you get a terminal illness, you do not want your life prolonged by "heroic" measures such as a breathing machine.

Under Illinois law, a living will has very limited value.  First, in order for a living will to be used you must have an incurable and irreversible condition which is such that death is imminent.  Secondly, in Illinois a living will can only be used to withhold or withdraw such procedures as assisted breathing, artificial kidney treatments, intravenous medication, or blood transfusions. In Illinois, a living will cannot be used to withhold or withdraw hydration and nutrition.

Very few people have the type of condition and treatment which would be aided by a living will.  For the large majority of the population, a Power of Attorney for Health Care would be much better than a living will.  To learn how to get a Power of Attorney for Health Care, read the Powers of Attorney section below.

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Trusts

A trust is a legal document designating a person or corporation to act as a trustee to receive and hold legal title to property and administer the property in accordance with the instructions in the trust document.  

A living trust is created during your lifetime and is revocable (capable of being changed, amended, or terminated).  You can act as trustee and have broad powers to invest and use the trust fund.  If you become incapacitated, the trust provides for a successor trustee to manage the trust assets.  Upon your death the living trust contains instructions for the distribution of your assets, just as a will would.  

The primary difference between a living trust and a will is that assets held in trust do not have to go through the probate process.  When you set up a living trust, you transfer your assets to the trust, and the trust is considered the owner of your assets.   When you die, there is no probate because the trust is considered the owner of the assets and not you.  The assets are then distributed according to the instructions in the trust.

The main advantages of a living trust are these:

1. If you want or need to have someone else manage your property and pay your bills in case of illness, the living trust is by far the best arrangement.  One alternative is a probate court guardianship proceeding, which is public, costly and inconvenient.  Another alternative is the power of attorney for property which is discussed in the next section of this pamphlet.
2. Avoiding probate at death may save time and money.   However, Illinois probate procedures are very simple especially when independent administration is used, and the importance of avoiding probate can be exaggerated.
3. Because a trust is not filed in court, its provisions are private, unlike a will, which must be filed in court at death.  However, copies of the trust may be required by people dealing with the trustee such as, for example, banks, stock brokers, etc.

The main disadvantages are these:

1. If you use a bank or professional trustee, there are fees to pay during your lifetime that will probably be much more than the potential probate cost savings.
2. Even if there are no trustee’s fees to pay, there will be costs and inconveniences during your life -- the initial cost of setting up the trust and transferring your property into trust, inconvenience of maintaining a separate bank account and books and records for the trust, and the annual filing of fiduciary income tax returns may be required.
3. A trust only disposes of assets transferred to the trust.

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Powers of Attorney

A power of attorney is a legal document in which a person (the principal) designates and authorizes another person (the agent or attorney-in-fact) to transact business or make certain decisions on his or her behalf.  Powers of attorney can grant broad, general authority or they can limit the attorney-in-fact’s power to act on behalf of the principal to particular situations.  Because there are many different types of powers of attorney available to address a variety of situations, powers of attorney are extremely useful estate planning tools.

If you are interested in drafting a power of attorney, contact the Steele Law Firm at (312) 893-5888 to schedule a consultation with an estate planning attorney.

There are two different kinds of Powers of Attorney, with two different purposes Powers of Attorney for Health Care and Powers of Attorney for Property.

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Powers of Attorney for Health Care

In this form you can give someone the power to make a full range of medical decisions for you.  Examples include consent to medical treatment, admission to the hospital, admission to long-term care facilities, disposition of your body after your death, and almost any type of health care decision that would have to be made. It could also express your desires about what should happen to you if you have a terminal illness and are maintained only through heroic means.  

In this way, a Power of Attorney for Health Care is like a living will, but it is a much broader and more powerful instrument. It does not just cover terminal illness, but also provides for what should happen in a whole range of situations that may arise as you get older.  A Power of Attorney for Health Care may become effective immediately, or you can state that it should only become effective if your physician or more than one physician certifies that you are no longer able to make these decisions yourself.

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Powers of Attorney for Property

With this form you can give someone the power to make decisions about your money and property.  For example, you could authorize someone to deposit and withdraw money from your bank account, pay your bills, deal with insurance, transfer real estate, and make other types of business transactions and decisions.  You can limit the scope of the power of attorney to specific types of transactions or you can make the power as broad as you like.  Again, the power can be effective immediately or only upon the certification of a physician.

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Call the Steele Law Firm at (312) 893-5888 for a FREE consultation and to learn more about how we can help you.