Most of us don’t want to think about the consequences of death or catastrophic illness.  Where is the fun in focusing on such negatives?  Unfortunately, real problems can result from failing to plan for such eventualities.

There are many issues to consider, only some of which are addressed by such questions as:

• Where will my property go when I die?
• What happens if I don’t have a will?
• Can I choose where my property will go?
• What is Probate?  Can I avoid it?
• Who will be making my healthcare/medical decisions if I am unable to do so?
• Can I decide in advance what will happen with my medical care?
• Will my family be forced to make my medical decisions for me?
• Can I keep my family from making my medical decisions for me?
• What will happen to my child/children if I die?  Who will take care of them?  Can I choose?
• Can I leave money to provide for my child’s/children’s education?
• Can I leave money to provide for someone I am not related to?
• What if I am not married?
• Can I make sure that my boyfriend/girlfriend/partner is taken care of?
• Will my boyfriend/girlfriend/partner be able to make my healthcare/medical decisions for me?
• Can I ensure that I am able to leave money/property to charity?
• Should I leave gifts from my estate before I die?  How much should/can I give?
• What is a Will?  A Trust?  A Living Trust?  A Living Will?  A Power of Attorney for Healthcare?  An Advance Healthcare Directive?

The questions can be overwhelming, but there are several legal instruments involved in Estate Planning, and  they can be used to help answer some of those questions.

Will

A Will is simply a legal document that describes what you want to happen to your property after you die.  Illinois has specific rules for creating a valid will and restrictions on who can be written out of a will, especially with spouses.  Always be sure to discuss with your attorney what you expect from a will to ensure those wishes are upheld.  If you have wishes as to where your property will go when you die, and you do not have any alternate legal instruments, such as trusts, then you should have a will.  A will also may specify what your wishes are as to your remains.

If you die without a will, you are said to be “intestate.”  Illinois has specific law regarding what is called “intestate succession” to determine who will get your property in such a case, and that will depend on what relatives you have (such as a spouse, children, grandchildren, etc.).  This is an important consideration, because without a will, your property will go to your relatives and not to anyone unrelated to you.

Whether or not you have a will at the time of death, your estate will go through “probate.”  Probate is simply the process whereby the court determines where your property will go.  If you have a fully valid will, the court will distribute your property accordingly; if not, the court will follow the rules of intestate succession and distribute the property to your relatives, and not necessarily according to your wishes.  Probate can be a lengthy and expensive process, and your attorney can help avoid such issues.

Durable Power of Attorney for Healthcare and Living Will

A Durable Power of Attorney for Healthcare (also known as a “Healthcare Proxy”) is a legal document that allows you to appoint an agent of your choosing to make health care decisions for you should you be unable to do so yourself.  Also, despite the wording, the agent need not be an actual attorney-at-law.  A Living Will (also known as an “Advanced Healthcare Directive”) is another legal document that directs your doctors not to prolong your life by hooking you up to life support (think about the Terri Schiavo case).  Even if you have a power of attorney for healthcare, a living will can ensure that your wishes are upheld even if the person you designate to make your medical decisions is unavailable.  Illinois also has Do Not Resuscitate (DNR) orders that will allow you to refuse CPR in case of heart or lung failure.  All of these documents are particularly important because they deal with situations in which your dignity is at stake.

In addition to ensuring that your wishes are upheld, these documents may also keep your loved ones from fighting over or simply agonizing over making such difficult decisions.  A power of attorney for healthcare can designate someone whom you trust as a final decision-maker for these matters, an issue particularly important for unmarried people.  A married person will generally have a spouse to make these decisions, but the situation becomes complicated for many people.  Some people are married but separated, and no longer wish to have a spouse making such decisions.  Some people have a devoted partner but are unmarried, and without a power of attorney, the law will not recognize that person as the decision-maker.  Others may wish not to burden their spouse with such decisions, especially if the spouse is ill or elderly.  Your attorney can help you prepare the legal documents required to ensure your wishes are upheld and your dignity protected.

Power of Attorney (Financial/General)

Powers of Attorney may also be assigned to ensure that your non-healthcare affairs are kept in order.  Your bank accounts, real estate, and business affairs, if not put into trust, may require regular attention.  Lengthy hospital stays - even those that result in a return to better health - can ruin one’s financial affairs if one fails to assign a competent agent to run those affairs.  Assigning a power of attorney to someone whom you trust can help to avoid these pitfalls.

Trusts and Living Trusts

A Trust is a legal device whereby you transfer ownership of all or some of your property to a Trustee, who controls and manages that property for the benefit of a person known as a Beneficiary.  The trustee can be a relative, a bank, an attorney or almost anyone else you choose, including you.  You also choose the beneficiary.  Beneficiaries are often one’s children, and trusts are an excellent way to ensure that younger children are taken care of when they would not have the ability to manage money or other property themselves.  You can also determine the purpose of the trust, as you may wish, for example, to put money in trust specifically for a child’s education or to care for someone unable to care for him/herself.  Trusts can be created for other purposes – in Illinois, one may even create a pet trust for the care of a beloved animal companion.

You may also create a Living Trust, which is a trust for which you are both the trustee and beneficiary.  This will allow you to control your own property even when that property is put into trust.  It also allows you to choose a new trustee and beneficiary upon your death, as well as setting rules for how the trust will be administered.  This serves as an excellent way to avoid a lengthy and expensive probate period, as technically, anything you put into trust is not owned by you upon your death.  Your attorney can help you sort out what can be put into living trust and what cannot.

Trusts are an excellent method of exercising control over where your property will go and for what purpose your property will be used, including those situations in which you might be incapacitated during a lengthy hospital stay.  Trusts may also be used to avoid estate taxes and probate, and your attorney can help with these issues.

Legal Advice

To ensure your wishes are carried out, the documents and devices you use must be properly prepared, particularly if there is a chance they may be challenged by relatives or others with interest in your estate.  Joseph P. McCaffery & Associates, with offices in Aurora, Chicago and Quincy, Illinois, is committed to ensuring that your wishes are fully upheld when the time comes.

More Information

For more information on preparing for your own and your loved-ones' futures, see our Estate Planning Checklist.