Power of Attorney for Health Care
This is a legal document in which you designate a person to be your “Agent,” in the event that you are unable to make important decisions regarding your health care and personal needs. Essentially, a POA for health care says that you want someone to make all of your health-related decisions for you if you are suddenly unable to do so yourself.
Carefully choosing the agent who will make such important decisions on your behalf is critical. This agent could decide whether to keep you on or take you off life support after a traumatic injury, or decide whether to have you revived in an emergency situation. Your agent should be someone that you have full faith and trust in, no matter the scenario.
Although a health care power of attorney is a short and relatively simple document to draft, its importance cannot be understated. Having a power of attorney in place will ensure that both you and your loved ones have peace of mind at all times.
It is also worth noting that you must create this power of attorney while you are mentally competent. You cannot wait until your sickness or injury has occurred to appoint an agent. By this time, it is already too late, so be sure to plan ahead!
Power of Attorney Property
Much like a POA for health care, a Power of Attorney for property is a legal document which is used to designate a person to be your agent in the event that you are unable to make important decisions regarding your finances and assets. Specifically, a POA for property is used to allow another person to make financial decisions on your behalf, including how money is spent and how to best manage your property.
A power of attorney is a flexible document, so can decide what powers you want your agent to have. Typical responsibilities include: handling tax issues, paying bills, controlling bank accounts, etc. You can also change your agent and change your power of attorney at any time, as long as you are still competent to do so. Therefore, it is a no-brainer to put a POA for property, as well as a POA for health care in place while you are in good health. This will create a safety net for you and your assets.
Lastly, just like with the POA for Healthcare, you must create this power of attorney while you are mentally competent. You cannot wait until your sickness or injury has occurred to appoint an agent. By this time, it is already too late, so be sure to plan ahead!
By drafting your will, we will allow you to determine what is done with all of your assets after you pass away. If you pass without a will, these decisions will be made by the government and not you. If you would prefer determining what happens to your property after you pass and want to ensure your assets are distributed according to your preference, we strongly suggest that you consider drafting a will.
A will is a legal document that states who you want to give your property to after you die. You can also state how the debts you owe will be paid. If you have children under eighteen, you can name who will be their guardian. If you decide to retain an attorney, he or she will inform you of the requirements for naming a guardian but you should know that Illinois law requires you choose a guardian who is a U.S. resident.
Your will also chooses the executor of your estate, which is the person who will carry out the instructions in your will. The person who is your executor cannot receive any gifts from your will. For this reason, it is very common for an attorney to act as executor for the estate.
In Illinois, there are certain requirements for writing a will, such as how it is written and who can act as a witness. It is very important that you follow all these requirements or else your will may not be valid. If you were to make a mistake in writing your will, it would be as if you did not even write a will. In order to avoid such mistakes, we greatly encourage you to hire an attorney to draft a will for you.
When you die, your property will be distributed through a legal proceeding in the probate division of your local court. If you have a will, your executor will file with the local court. After being approved, your executor will be able to carry out the instructions written in your will. If you die without a will, a judge will decide who has control over your estate. Either way, the probate process can be very complicated and costly. With the help of an attorney, this process can be simplified.
Wills have limitations. There are certain things that a Will can do and others things that a Will cannot do. The following is a brief summary of what a Will can and cannot do.
A properly drafted and executed Will can:
- Specify how to dispose of property in your name through the probate process;
- Specify from what sources payment of debts and expenses are to be made;
- Designate your preference for who should be appointed as guardian of any minor children;
- Designate who you want to run your probate estate;
- Request waiver of representative's surety bond; and
- Indicate preference for independent or supervised probate estate administration.
A Will cannot:
- Dispose of property titled in joint tenancy or property subject to a valid beneficiary designation;
- Help your estate avoid probate court;
- Provide for management of your assets during disability or incapacity;
- Keep the affairs of your estate private; or
- Effectively disinherit a surviving spouse.
Even for "simple" outright wills, it is nearly always advisable to have a qualified attorney draft and oversee the execution of your Will. Unlike some other documents, courts strictly construe the language and execution of Wills, therefore, if proper terminology and procedure is not used in drafting and executing the Will, your wishes may not be carried out as you intend.
You can make a living trust to avoid probate for virtually any asset you own -- real estate, bank accounts, vehicles, and so on.
A living trust is simply a written property agreement wherein you transfer property to a trust while you are alive. While you are alive, you yourself are the trustee and control all of your assets. When you die, a different person you designated takes the position and has the job of distributing your assets to whomever you picked as beneficiaries.
Once the trust document is prepared you must transfer ownership of your property to the trust, which you will now be responsible for managing as the trustee. After this is completed, the property will be controlled by the terms of the trust and you control the trust while you are alive. After your death, your designated trustee will ensure that your assets are distributed to your beneficiaries accordingly. Your "successor trustee" will be able to transfer it to the beneficiaries without court proceedings.
A DEEPER UNDERSTANDING OF LIVING TRUSTS
A revocable living trust is basically the designation of a person or any entity to act as a trustee to manage the designated trust property and distribute assets upon the Settlor’s (creator of the trust) death. Remember, you can be your own trustee as long as you are alive.
A living trust is created and takes effect during your lifetime. A will does not take effect until after death and often requires court approval before distributing assets.
Parties Involved with a Trust
Settlor - The person who puts their property in the trust.
Trustee - The person who is in charge of managing the trust assets after the settlor passes away or becomes incapacitated.
Beneficiaries – The person(s), entity, etc., that will receive the trust assets whenever you wish for them to do so.
What are the Benefits of Creating a Living Trust?
No probate court àTrust assets pass to your beneficiaries (the person(s) you elect to receive the trust property) without the need to go to probate court
Less complicated and cheaperà A living trust transfers the trust property to your beneficiaries with less expense (for both you and your beneficiaries) and with less complexity than a will
Privacy à A trust will keep your personal and business affairs private, unlike a will which goes through the public court system
Flexibility à This is one of the biggest advantages of a trust. During your lifetime, you can amend the trust, add or transfer trust property, add/remove beneficiaries, add a successor trustee to manage the trust, borrow against trust property, or terminate the trust altogether, all without court oversight or intervention
Debts à Often, real estate held in a trust has a mortgage. If the beneficiaries receive a home that is saddled with an existing mortgage, the beneficiaries would have to make the mortgage payments. However, using the trust as a tool, you can direct the trust to pay off the existing mortgage before passing the real estate to your beneficiaries, assuming that your trust has enough existing assets to do so
- Children à if you are worried that some of your beneficiaries may inherit trust property before they are mature/capable enough to manage this property, you can keep the assets in the trust until you see fit
What goes into your living trust?
A trust is usually created to protect your major assets, including, but not limited to:
- Real property
- Financial accounts
- Business interests
- Intellectual property (copyrights, trademarks, patents)
- Jewelry, art, antiques, etc.
A pour-over will is created to enable the distribution of certain property that is not included in the living trust. Essentially, the pour-over will should serve as a safety net for you, as it states that any assets that have not been funded into your trust during your lifetime should pass to your trust upon death.
Avoid intestate distribution à if you forget to transfer your new boat to your trust and you pass away without a will, your boat might pass to an estranged relative solely because of his blood ties to you
A downside of adding a pour-over will is that any property that has not yet been transferred to the trust before your death will have to go through the probate process, even with a pour-over will.