Estate planning is the process of deciding how your assets are managed during your lifetime and after your death, and making appropriate arrangements to ensure your wishes are carried out. Basic goals of estate planning include ensuring that your assets pass to the people who you want to receive them (the beneficiaries of your estate) smoothly, efficiently, and without the need for probate, and minimizing the amount of estate taxes that must be paid upon your death (for estates whose total value exceeds applicable state and/or federal thresholds). Estate planning allows you to be in control of your assets and decide a number of key issues, including: • how your assets are handled while you are still living but are incapacitated, • who you would like to receive your assets after death (the beneficiaries of your estate), • how the beneficiaries of your estate receive the inheritance you leave them, • who is in charge of administering your assets after death, and • who you would like to be the guardian of your minor children (if applicable). Some key documents an estate plan may include are: • a Revocable Trust • a Will • a Power of Attorney for Health Care • a Power of Attorney for Property If an individual dies without an estate plan, state law determines who receives their assets, and depending on the assets the individual had, probate may be required to administer the individual's estate. A well thought-out, properly implemented estate plan can help avoid the need for probate upon the individual's death, which can save a lot of time and money in the long run.

Probate is the legal process by which a decedent's estate is administered under court supervision. The process is intended to ensure that the decedent's assets are properly managed and distributed, providing a legal framework for the orderly transfer of property after death. The process involves several key steps, including the proving of the decedent's will (if one exists), the appointment of an administrator or executor to handle the administration, the identification of the heirs or beneficiaries of the estate, collecting and valuing the decedent's assets, paying debts and taxes, and distributing the remaining assets to the rightful heirs or beneficiaries. The probate court has the authority to handle all matters related to the estate, including the appointment of executors or administrators, the resolution of disputes, and the final distribution of the estate. Probate proceedings can vary in complexity depending on the size of the estate, whether a will exists, and any disputes among heirs or creditors.

In Illinois, a decedent's estate must go through the probate process if the decedent had $100,000 or more in his or her individual name (with no beneficiaries designated on said assets) on the date of death, or if the decedent owned real estate. If the decedent did not own real estate or have $100,000 or more worth of assets in his or her individual name, it may be possible for the decedent's assets to be administered without going through the probate process and with the use of a Small Estate Affidavit.

If an individual dies without an estate plan, the laws of the state he resided in at the time of his death will determine (i) who is entitled to gain authority to administer the decedent's estate, and (ii) who is entitled to receive the decedent's estate. Initially, the estate is divided among the decedent's immediate family, such as a surviving spouse, children, parents, siblings, and other relatives in a specific order of priority. If there are no surviving immediate family members, the estate is distributed to more remote relatives, such as grandparents or their descendants. This may have a number of unintended consequences, such as: • Leaving assets to minors. Minors cannot own assets, so someone will need to be appointed to take care of the minors' assets until they reach age 18, at which time they will receive access to the funds left for them. Furthermore, many parents may not want their children to receive their inheritance until a later age when they have developed a greater sense of responsibility (maybe 25 or 30), even if they are over the age of 18. • Leaving assets to someone who receives government benefits. Leaving assets to someone who receives government benefits may disqualify them from receiving government benefits until their assets are depleted, at which time they will need to reapply for those government benefits. For example, if you have a child or sibling who is under a disability, you should make sure to make provisions in your estate plan that any assets left to them are not given to them outright, but left to them in trust so that they are not disqualified from receiving government benefits. • Cutting a partner out of an inheritance. If you are unmarried but have a long-time partner to whom you would like to leave your assets, that partner may not be entitled to receive anything from your estate absent an estate plan.

Conflicts among heirs can arise in a number of areas, such as: • Who is appointed to be the administrator of the estate? • If there is distrust among parties with the same level of preference to serve, it may be difficult for them to agree upon who is appointed by the court. This can lead to multiple court appearances and legal fees, potentially depleting estate funds. • Who receives which asset(s)? • While law provides in what proportion assets are to be distributed, that's not necessarily practical for certain items. For example, a watch, a piece of precious jewelry, a set of golf clubs, an article of clothing, etc. There is no clean way to divide items with sentimental value if the heirs cannot agree or if heirs are spiteful towards one another. Perhaps someone has an expectation that they will receive a specific item of the decedent's - maybe it was promised to them while the decedent was still living; however, absent that wish being memorialized in an estate plan, that promise is not binding or enforceable. • Who is an heir? • Whether certain individuals are heirs or not is not always so clear cut, especially in situations where a child of the decedent was estranged from the family from a young age, where children were born out of wedlock, or within families where parents may have separated or divorced when children were young. Tensions rise and resentment can build between those who had more involvement in the decedent's life than those who were less present. Of course, the list above contains only a few examples and is not exhaustive. While there is no guaranteed way to ensure disputes don't arise, having an estate plan in place can eliminate a lot of the guessing and minimize the potential for disputes to arise between those left behind, resulting in a smoother transfer of assets.

No, a Will, in and of itself, does not avoid the need for probate. Conversely, just because an individual doesn't have an estate plan in place does not necessarily mean that individual's estate will need to go through probate after death. Whether probate is required depends on a number of factors. While it is certainly possible to set up your assets in such a way as to avoid the need for probate upon your death without the implementation of a trust, simply having a Will does not achieve that objective. If your goal is to ensure that your estate does not need to go through probate upon death, you should consult with an attorney to make sure the estate plan you have in place accomplishes that goal.

A Power of Attorney (POA) is a document in which you can designate who you would like to act as your agent and have authority to make decisions for you or transact on your behalf. You can make the POA effective either immediately upon execution, or only upon your incapacity. If it is a "Durable" Power of Attorney, it remains in effect even after you are determined to be incapacitated or disabled. In Illinois, there are two main types of Powers of Attorney: a Power of Attorney for Health Care, and a Power of Attorney for Property. In a Power of Attorney for Health Care, you can designate who you would like to have the authority to make health care related decisions on your behalf. Similarly, in the Power of Attorney for Property, you designate who you would like to have the authority to make decisions on your behalf relating to property, finances, etc. In each type of POA, you can insert restrictions or add specific powers. Durable POAs are important to have in place as they not only (i) allow you to choose someone you trust to handle your affairs after incapacity or disability, but they can also (ii) help avoid the need for guardianship. For example, absent a POA, financial institutions or doctors may not be willing to allow someone else to access your records or make decisions for you if that person cannot demonstrate that they have the authority to do so. If a Durable POA is not in place, the only other way for someone to demonstrate authority to act on your behalf may be to open a guardianship, whereby they are granted authority by the probate court.

A revocable trust, sometimes also known as a "living" trust, is a trust that can be modified or revoked by the person creating the trust (also known as the "grantor" or "settlor") during the grantor's lifetime. Because the grantor can alter the terms of the trust or terminate it entirely, the grantor can regain outright ownership of the trust property at any time.

Having a trust is only effective if it is properly funded. A trust only has authority over the assets it owns. After a trust is created, assets must be retitled to reflect the trust as owner in order for those assets to be subject to the terms of the trust. For example, rather than the deed to your real estate reflecting the owner to be "John Doe", it would read "John Doe, as Trustee under the John Doe Trust dated xx/xx/xxxx." Similarly, your bank statements would read something along the lines of "John Doe, as Trustee under the John Doe Trust dated xx/xx/xxxx." Feel free to reach out if you have questions regarding retitling your assets to your trust.

A will is an important part of an estate plan, even if it is a trust-based estate plan. However, in a trust-based estate plan, the main function of the will is to ensure that any assets which were in the decedent's individual name upon his or her death (as opposed to being retitled to the decedent's trust) are transferred to the decedent's trust. That way, the trust will ultimately determine how those assets are to be managed and distributed. For this reason, the will in a trust-based estate plan is often called a "pour-over will" - because its main purpose is to ensure that any asset that may not already have been retitled to the trust during the decedent's lifetime still "pours" into the trust and is subject to the terms of the trust.

If it is a revocable trust, you probably do not need to file a separate tax return, or even obtain a separate tax ID (EIN) for that trust. It is treated as pass-through for tax purposes, and you may continue to use your social security number. If it is an irrevocable trust, you should obtain a separate tax ID for that trust, and if it earns income, you may need to file a separate tax return for that trust each year. However, it is important to note that a revocable trust becomes irrevocable upon the death of the grantor, and at that time, a separate tax ID must be obtained for the trust and taxes must be filed separately for that trust thereafter. As for joint trusts for spouses, whether he trust becomes irrevocable upon the death of the first grantor or the second grantor to die depends on the terms of the trust. If you are unsure whether you must file a tax return for a trust, it is important that you consult with an attorney and/or with your tax advisor.

Adding another owner to your assets (if properly done) may help avoid probate; however, this strategy can also have unintended consequences. Once you’ve added another owner to your asset, the asset is now equally that other individual’s. If you add another party to a bank account, that other individual has unfettered access to the funds in the account and can potentially empty out the account or use the funds for himself. If someone is added to title to real estate, the other individual is a joint owner and you will lose your ability to sell the real estate without the consent/signature of that other owner. Alternative options you may want to consider in order to help ensure your assets don’t need to go through probate are (1) naming beneficiaries or “transfer on death” designations on your bank accounts, or (2) retitling your assets to your trust, and specifying in your trust who you would like to receive those assets. A third option available for real estate, if you do not want to create a trust, is to record a “Transfer on Death Instrument” or “TODI” for each property you own. A TODI is similar to a deed but specifies who you would like to receive said real estate upon your death. These alternative options allow you to retain complete control over your assets during your lifetime, but can help ensure they don’t need to go through probate upon your death. Passing assets through inheritance rather than by gifting them during your lifetime may also provide certain tax benefits to the beneficiaries who receive your assets.

“Letters of Office” or “Letters of Administration” does not actually refer to a letter. Rather, it is an official document provided by the probate court after an estate is opened, which designates the party who has authority to administer the estate. “Letters of Office” is the title given to the document when an Executor is appointed, in which case the decedent died leaving a valid will in which he or she appointed an Executor to administer the estate. “Letters of Administration” is the title given to the document when the decedent did not have a valid will.

An Executor and an Administrator have essentially the same responsibilities in terms of administering a probate estate; however, the title “Administrator” is given to a party who is appointed by the probate court to administer a decedent’s estate when the decedent died without a will (also called “intestate”), whereas “Executor” is the title given to the party appointed by the probate court to administer the decedent’s estate when the decedent died with a will and named an Executor in it. "Trustee" is the title given to the party who has the authority and responsibility to administer a trust.

Under independent administration, a probate estate is opened and the independent administrator or independent executor, as applicable, is given broad authority to administer the estate, so that said estate representative does not need to obtain court approval for various tasks during the administration. Under supervised administration, the supervised administrator or supervised executor has more limited authority, so the representative of the estate must obtain court approval before performing certain actions, like selling real estate. Because supervised administration requires the estate representative to obtain the court’s approval before performing many of its duties, supervised administration can be more expensive than independent administration. However, in situations where the heirs or legatees of an estate do not trust each other, supervised administration is available and is intended to provide more transparency throughout the administration process. That said, because supervised administration requires much more court involvement and can therefore be more expensive than independent administration, it can deplete estate funds and result in less funds remaining for the parties entitled to receive the estate's assets. As such, one should weigh the benefits against the costs before requesting supervised administration, especially for estates that are not high in value.

No, inheritances are not taxable. However, if the inheritance you receive generates income, the income generated is taxable. For example, if you received stock upon someone’s death and that stock generated income after the individual's death, the income generated after the date of death is taxable income. Similarly, if you received real estate upon someone’s death and the real estate increased in value, then you sold it, the gain (the increase in its value between the date of death and the date on which it sold) is taxable income. For example, if you received real estate which was valued at $350,000 on the date of death, and you later sold it for $400,000, you realized a gain of $50,000 which is taxable income. It is always a good idea to discuss with an attorney and/or a tax advisor to ensure all necessary tax returns are filed in a timely manner.

For individuals who live in Illinois, there are two thresholds that must be considered: First, Illinois has a $4 million estate tax exemption, which means an individual can transfer up to $4 million upon death tax-free. If an individual has a taxable estate that exceeds $4 million, tax will be owed to the state of Illinois on the portion that exceeds $4 million. The second threshold that must be considered is the federal estate tax exemption. In 2025, the federal estate tax exemption is $13.99 million per individual. Unlike the Illinois estate tax exemption, the federal estate tax exemption is “portable”, which means that any applicable exclusion amount that remains unused as of the death of the first spouse to die will be added to the applicable exclusion amount available for use by the surviving spouse, provided the proper election is made on the estate tax return of the first spouse to die. This allows spouses to combine their exemptions and transfer up to $27.98 million (in 2025) free from owing estate tax to the federal government. Note, however, that the federal estate tax exemption is set to sunset at the end of 2025 and be reduced to around $7million per individual.

In Illinois, an individual's taxable estate includes all assets that are part of the decedent's gross estate as defined by federal law. This encompasses virtually all assets owned by the decedent at the time of death, including real estate, stocks, bonds, mortgages, notes, cash, collectibles, automobiles, jewelry, and personal effects. Additionally, the gross estate includes property in which the decedent had any legal title or interest at the time of death, including assets conveyed to a survivor, heir, or assignee through joint tenancy, tenancy in common, survivorship, life estate, living trusts, or other arrangements. Non-probate assets, such as jointly held property and life insurance proceeds, are also included in the gross estate for federal estate tax purposes.

Business succession planning includes (i) making arrangements for what happens to your interest in a business upon your incapacity or death, and (ii) ensuring your interest in a business transfers to the parties you would like to receive it (whether your family members, the business, or the other business owners). Depending on the size and needs of the business, it is not uncommon for life insurance to be a part of this equation. Having a business succession plan in place can help smoothen the transition of ownership and minimize the disruption to a business upon the death or incapacity of an owner.