Transfer on Death Instrument or Living Trust – Which One Should You Use?

Wheaton wills and trusts lawyersHistorically, estate planning has been overlooked by the non-wealthy. Times are changing, however. Retirees and even younger adults are starting to recognize the benefits of an effective estate plan – especially when there is a smaller estate. You see, probate can quickly eat away at the value of a moderate estate, which may lead to significant losses for beneficiaries. In situations where the only transferable item is real estate, the loss may even prevent the procurement of the asset.

Thankfully, there are some preventative strategies that you can use, including Transfer on Death Instruments (TODI) and living trusts. How do you decide which is most appropriate for your situation? The following explores these two solutions and explains where to find assistance with your Illinois estate planning needs.

Living Trusts

Revocable trusts (otherwise known as living trusts) are legal documents that authorize a trustee (beneficiary) to hold and manage the grantor's assets before death. This authorization can be extremely beneficial for those suffering from a degenerative brain disease, or someone that is at risk for incapacitation. However, it can be used by anyone to avoid probate upon their death. It should also be noted that grantors still own their funds until death, and they can alter or revoke a living trust at any time (provided they are of sound mind).

Unfortunately, there are some limitations and concerns with living trusts. They must be funded, so they can be expensive to set up. It should also be noted that a single mistake – even a minor one – can invalidate the trust and cause the estate to go to probate. Living trusts do not replace a will either, and there may be confusion about what should go in a will and what should be designated to the trust.

Transfer on Death Instrument

A TODI deals only with the transfer of real estate, so it is not a comprehensive estate plan. However, they are less complex (and often less expensive) than a living trust, and they can still be altered or revoked (with a few exclusions). Still, there are some limitations and exclusions that one must be aware of before setting up a Transfer on Death Instrument. For example, a TODI can only be signed by someone of sound mind who is not under duress. A TODI must also comply with all deed requirements, and it must be registered in the county or counties where the property is located.

Contact Our DuPage County Estate Planning Lawyers

Because each situation is unique, it is crucial that estate planners seek experienced legal assistance before moving forward. The skilled DuPage County estate planning lawyers at Stock, Carlson & Duff LLC can help. Knowledgeable and dedicated to protecting your best interests and the interests of your heirs, we will examine your situation and then strive to develop a creative solution that works for you. Schedule a personalized consultation to learn more. Call 630-665-2500 today.


Life-Changing Events That Should Prompt an Update to Your Estate Plan

Illinois estate planning lawyersIf there is one thing you can count on in life, it is that things will change. Some changes are more internal, such as a new passion or career goal. Others are external. The former, though often positive, are likely to have little impact on the future of your estate. In contrast, the latter may require a significant change to your estate plan. Learn more about these changes in the following sections, and how an attorney can help ensure they are effectively addressed.

Re-Marriage and Divorce

Changing your marital status – whether from single to married or married to divorce – will, in most cases, warrant an update to your estate plan. This is especially true in the case of divorce and second, third, or other subsequent marriages. You should not tackle the changes alone, however, since blended families and ex family members can further complicate an already complex process. Instead, ask an attorney for assistance.

Birth and Adoption

The welcoming of a new child is a joyous event, but if you do not change your estate plan, you risk leaving your newest family member out in the cold. This can be especially troublesome if you have an ex-spouse. Further, young children may be at risk for foster placement – even if only temporarily – if you do not appoint a guardian and both you and your spouse pass away unexpectedly. So protect your children and update your estate plan as soon as the birth or adoption has taken place.

Death, Illness, or Injury of an Heir

If one of your heirs becomes ill or seriously injured, you may need to update your estate plan to better reflect the situation. For example, if a child becomes disabled after a car crash, you may want to assign provisions for them to ensure they are properly cared for after your passing. This may mean changing the inheritance of other children or heirs. Death of an heir should also prompt a change since that person can no longer inherit.

Tax Law Changes

While not all tax law changes warrant a change to your estate plan, others certainly do. In fact, some could significantly impact how your estate is taxed or distributed. This is also why it is a good idea to ensure your estate plan is reviewed by an attorney on a regular basis; they can ensure you are taking advantage of the options available to you and your heirs, and that all new tax laws are being considered. If you have questions about your estate plan and how taxes may impact it, contact an experienced estate planning attorney today.

Schedule a Consultation with Our Estate Planning Lawyers

At Stock, Carlson & Duff LLC, we work hard to preserve the best interests of our clients and their heirs. Seasoned and knowledgeable, we can review your estate plan, no matter what changes have occurred in your life, and will ensure you understand your options. Learn more about how our DuPage County estate planning attorneys can assist you. Call 630-665-2500 and schedule a consultation with us today.



Estate Planning for Blended Families

If you have children from a previous marriage or relationship (or your spouse does), then careful estate planning is absolutely critical to the financial future of your loved ones. What does that really mean, though? How do you move forward and ensure that everyone receives their fair share upon your death, and that any minor children are cared for in your absence? The following explains, and provides some key information on where to find assistance with your blended family estate plan.

Why is Estate Planning is So Critical?

Estate planning is a difficult process – not just because it is a complex matter, but also because it requires you to think about your death: what might happen, what you want to happen, and how you want your assets to be distributed. Yet it truly is necessary, especially when you have children or a blended family. Children need a guardian named if they are minors. If they are adults, those who are not blood related could potentially lose out on an inheritance. Or it could cause arguments in your family after you are gone. Estate planning gives you the chance to make your wishes known, ensures that the right assets go to the right individuals, and protects minor children by ensuring they have a guardian that you and your spouse trust.

Things to Consider in a Blended Family Estate Plan

Because every family is unique, each estate plan is different. This remains true for blended families as well. However, there are a few similarities from one family to the next. Most must make considerations regarding the assets to be assigned to each child. Those with minor children should also name at least an emergency guardian, primary guardian, and a "backup" guardian, just in case the primary passes away, is no longer up to the task, or is otherwise unable to fulfill their duties at the time of the parent's death.

Family dynamics must also be considered. Unfortunately, some may struggle more with this consideration than any other. For example, a stepfather may want to leave an inheritance behind for his stepchildren, but is not certain how the rest of the family might react. The matter might be even further compounded if he also happens to have a natural child that has an addiction problem or trouble managing money. Then he not only has to worry about how the rest of the family might react to the step-child's inheritance; he may also have to worry about whether his natural child will feel slighted in his smaller (or even non-existent) inheritance.

Contact Our DuPage County Estate Planning Attorneys

If you do not have an estate plan in place, and are uncertain of where to start, contact Stock, Carlson & Duff LLC. We are dedicated to ensuring you and your family understand your options and will work to find creative solutions to fit your needs. Skilled and experienced, we protect your family's interests, now and into the future. Call 630-665-2500 to schedule your consultation with our DuPage County estate planning lawyers today.