ESTATE PLANNING BASICS

nat rosasco • March 1, 2019

In my interactions with people looking to set up their estate planning, the benefits of an estate plan seem to be fairly well understood: providing for the care of your children, taking care of your family upon your passing and protecting your assets while minimizing your expenses. What people often over-look are all of the documents that are typically needed for an effective estate plan and what exactly these documents accomplish. A complete estate plan in Illinois will generally consist of four documents: a Will, a Trust, a Healthcare Power of Attorney and a Property Power of Attorney. Here is a look at what each document is and the purpose it serves:



Will

A Will serves two crucial functions by (i) providing for how your property will be distributed at the time of your death, and (ii) allowing you to appoint a guardian for any minor children you have. With respect to directing the disposition of your property, if you do not have a Trust, the Will is the primary document that handles the disposition of your assets. However, if you have a Trust, then the Will acts as a catch-all with a “pour over” provision and any assets that are not titled in the name of your Trust will “pour over” into your Trust.


More importantly, a Will allows you to appoint a guardian for any of your minor children. If you do not appoint a guardian in the Will, the probate court will decide who the guardian will be. The court appointed guardian may not always be who you intended to entrust with your children. Accordingly, a Will is essential in ensuring that your children end up with your chosen caregivers after your death.


Trust

A revocable Trust, also known as a living Trust, is the most efficient and effective way to provide for the distribution of your property after your death. A Trust is a separate legal entity created to hold your property for you, and a living Trust allows you to still be in full control of your property during your lifetime. Upon your death or incapacity, the Trust will then provide for a Trustee to administer the Trust property per your directions. Most importantly, assets in a Trust are not subject to probate which can easily take 6 months to a year and be very costly. In other words, the probate process will cost more than a typical estate planning package that includes setting up a Trust.


A Trust also gives you greater control over your property upon your death than a Will does. In Illinois, with a Will, your children will receive all of your property at 18, or at the very latest, 21. With a Trust, you can distribute the desired percentage of your assets to your beneficiaries at whatever ages you desire. You can also make the size and timing of your beneficiaries’ inheritance contingent on certain life events or achieving certain goals and milestones, such as reaching a certain age, graduating college or getting married.


Healthcare Power of Attorney

This document appoints an agent to make medical decisions for you if you are unable to make those decisions yourself. These decisions can include end of life decisions and what you would like to happen with your remains upon your death. The Healthcare Power of Attorney will also permit your appointed agent to have access to your medical records. This is important in light of increasingly strict HIPAA regulations. Without having a Healthcare Power of Attorney, parents of children over the age of 18 and even spouses are often denied access to medical records.


Property Power of Attorney

This document appoints an agent to make certain financial decisions for you and to pay whatever ongoing expenses you may have (mortgage, utilities, etc.) if you are unable to make those decisions or payments yourself. Without this document, it will be nearly impossible for anybody to obtain the passwords to your accounts to make any of your required payments or to obtain authorization to act on your behalf.


While each estate plan is crafted specifically to fit the needs of a particular person, couple or family, the documents discussed above are generally what you should be looking for in setting up your Illinois estate plan. It is important to remember that while these estate planning documents are the best choice for certain people, they may not be the best choice for you. Accordingly, it is important to consult with an experienced attorney before determining what estate plan best suits your specific needs. Please feel free to reach out to me with any questions at bhaney@ghulaw.com or visit our website at www.ghulaw.com.

Options for Addressing Title Encumbrances in Loan Transactions

By Jordan Uditsky • January 4, 2022
An amendment to the Mechanics Lien Act (the "Act') permits the bonding over of mechanic's liens in the State of Illinois. The bill was signed into law ( 770 ILCS 60/38.1 ) on July 28, 2015, and went into effect on January 1, 2016. This statute is significant because it allows parties to "clear title" to real property that would otherwise be subject to a mechanic's lien. An eligible applicant will be permitted to substitute a bond for the real property subject to the underlying mechanic's lien so that the lien attaches to the bond instead of the real property. Who is Eligible? To take advantage of 770 ILCS 60/38.1 , the party desiring to bond over the lien must be an eligible applicant. The statute defines applicant relatively broadly to include the following parties: An owner; Other lien claimant; A party that has an interest in the property subject to the lien claim; An association representing owners organized under any statute or to which the Common Interest Community Association Act applies; or Any person who may be liable for the payment of the lien claim, including an owner, former owner, association representing owners organized under any statute or to which the Common Interest Community Association Act applies, or the contractor or subcontractor. Process for Filing a Petition To effectively substitute the bond for the real property, the applicant must file a petition with the clerk of the circuit court in the county where the property subject to the underlying lien claim is located. The petition must include the following: The name and address of the applicant and the applicant's attorney, if any; The name and address of the lien claimant; If there is a pending action to enforce the claim, the name of the attorney of record, or if there is no pending claim, but the claim has been recorded, the name of the preparer of the lien claim; The name and address of the owner of record of any real estate subject to the claim or the name and address of the homeowners association or the condominium association; A legal description of the property; A copy of the lien claim; A copy of the proposed eligible surety bond; A certified copy of the surety's certificate of authority from the Department of Insurance or the state agency charged with the duty to issue the certificate; and An undertaking by the applicant to replace the bond with another eligible surety bond in the event that the proposed eligible surety bond ceases to be an eligible bond. After filing a proper petition, the applicant must provide notice and a copy of the petition, either by personal service or certified mail, to every party whose name and address is stated in the petition and the lien party's attorney of record. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise business owners in the Chicago area.

On the Move: Legal Issues Affecting Motor Vehicle Manufacturer and Dealer Law

By Lou Chronowski • November 10, 2021
“Pandemic Impact? - New York Federal Court Allows Termination Dispute to Proceed” 

On the Move: The Future is Now!

By Lou Chronowski • October 19, 2021
Welcome to GHU’s newest blog – On the Move: The Future is Now! This blog focuses on legal and policy issues facing the vehicle industry. The future is now for the vehicle industry. Some states (CA and MA) have issued mandates requiring that vehicle manufacturers stop selling new ICE (internal combustion engine) vehicles by 2035. Most legacy vehicle manufacturers have made various announcements stating that their respective product portfolios will move from ICE to zero emission vehicles (EVs) over the next 10-14 years. Another significant issue facing the issue relates to how vehicles are purchased. Over the past several years, Tesla has charted a distribution model that rejects traditional dealerships and uses direct sales and service. Other EV manufacturers like Rivian and Lucid appear to be headed in a similar direction. It is well known that Apple and Amazon have plans to enter the vehicle space as well. Consumers will have a large role in determining how they want to purchase vehicles and vehicle services (much the same as they did with respect to on-demand transportation with the likes of Uber and Lyft). The question is whether traditional manufacturers will be kept on an uneven playing field with these newer market entrants. Finally, autonomous vehicles (AVs) are right around the corner as well. In addition to consumer adoption and acceptance of EVs, it is still unknown how consumers will react to AVs and whether AVs have a large role in America. The future is now. The changes in the industry are happening now and happening at fast pace. This blog will continue to explore issues facing the vehicle industry. For 20 years, Lou Chronowski has represented motor vehicle manufacturers helping them navigate complex laws and regulations and litigating disputes against dealers. If you have any questions, please contact Lou at lchronowski@ghulaw.com .
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