An estate refers to the many assets left behind by an individual at the time of his or her death. These assets include everything, including money, possessions, homes, and more. The assets that do not otherwise have designated beneficiaries, sometimes referred to as assets that are transferred by “operation of law”, are a subset of assets called a Probate Estate
A Beneficiary is an individual who is designated to receive specific assets from a deceased person. Beneficiaries typically include the spouse, children, relatives, and/or friends of the deceased.
Sometimes called a personal representative or administrator, an executor is a person who has been designated in a will to carry out the will’s instructions. Those who are named as executors are typically friends or family of the deceased, but may be a financial institution.
When a person creates a will, he or she typically designates an executor to represent the estate after he or she has passed. If an executor is not designated, the courts will appoint an administrator to represent the estate. The administrator will distribute the assets of the deceased in accordance with the will and applicable law.
A fiduciary is a person who has been appointed to act in the best interest of another person, or of a business. Fiduciaries must act without any personal biases, making estate decisions which benefit the estate only. Fiduciaries are the persons named to act under your will, trust, power of attorney for property or power of attorney for health care, and may be different for each role.
The testator, sometimes called the grantor, is the creator of a will. He or she designates certain assets which are to be passed down to specific beneficiaries. He or she can also establish living wills, trusts, and other such legal entities as part of the estate plan.
A will is a document which designates where probate assets, and only probate assets, will be passed after a person has died. Wills are proven through probate court. Under Illinois law, a will can be given effect through the use of a small estate affidavit if the total probate assets are less than $100,000.00.
A living trust is a separate legal entity established during your life in which assets are placed to be administered over a period of time, both before and after a person’s death, for the benefit of specific individuals and entities. Parents and grandparents often establish trusts for their children and grandchildren. Passing assets down through a legally established trust will typically maximize the benefit to younger or incapacitated heirs, ease administration of financial affairs before and after death, keep the family process confidential and out of court, and minimize inheritance taxes at death.
When a person dies without having made a will, that person is said to have died intestate. When an intestate situation occurs, the probate courts must decide what happens to the deceased individual’s assets. You should avoid these types of intestate situations, because the State through the court process then writes your will, whether it is the way you intended or not. Costs of passing your estate this way are typically much higher than the legal fees incurred in planning your estate.
Estate planning is not just for passing down assets. It also should consider effects on the testator’s life as well. This is where an advance health care directive, the collective term for both a living will or a power of attorney for health care, comes in. A living will is a document stating that you have no desire to be kept alive artificially if death is imminent and your medical prognosis has become terminal. A more flexible document that covers much more medical circumstances, including disposition of your remains, is a Power of Attorney for Health Care. You use such a document to designate a third person to make medical decisions for you when you cannot, including end of life decisions.
Like any financial transaction in this country, the passing down of assets can be taxed, and can be subject to the cost of court proceedings. Therefore, when you’re receiving assets from a decedent, you will need to pay probate costs, and possibly death or inheritance taxes. Fortunately, the testator can legally minimize these taxes by planning his or her estate carefully with an estate attorney.
Looking to gain a better understanding of the probable process? In need of a Morton Grove probate lawyer to help you navigate through the process? If so, the experts here at John J. Pembroke & Associates are the people to call.
With decades of experience on our side, we are highly experienced in probate law. It is our goal to help you understand the probate process, and develop a legally ironclad estate plan on your behalf.
Contact us today to discuss your needs!