Common misconceptions about Wills

Many people believe a will protects from having your loved one’s estate probated but this is not true! Having a will REQUIRES the estate to be probated. Read below to find out more about why a will IS NOT sufficient estate planning.

  1. I have a will, so my family will avoid probate when I pass. Unfortunately, this is not true. A will REQUIRES your property to go through probate after you pass. Probate is the legal process through which the court makes sure your assets are distributed according to the instructions in your will. A will is a set of instructions to the probate court and only works if there is a probate.

 

  1. I DON’T have a will, so my family will not have to go through probate. If you own assets in your name and you don’t have a will, the state in which you live will require your estate to be divided through the probate court. Also, the laws in most states allow for the inheritance of property only by bloodline or marriage, so an unmarried partner or close friend would not receive anything.

 

  1. If I become incapacitated, my executor will be able to handle my financial affairs. Unfortunately, any instructions in a Will are ignored if you become incapacitated. That’s because a will can only go into effect after you pass; it is of no use before then. Unless you have established Power of Attorney documents, the court will likely appoint an individual to take control of your assets and your care if you become unable to conduct business. This person is commonly referred to as a guardian, and the court will continue to supervise the actions of the guardian.

 

  1. Joint ownership is a good way to avoid probate. Joint ownership with right of survivorship (the most commonly used form of joint ownership) allows the jointly owned asset to transfer automatically to the other joint owner when one owner passes, without probate. However, if both owners pass simultaneously or if the surviving owner does not add a new joint owner before he or she passes, the asset will have to go through probate before it can go to the heirs. In most cases, joint ownership merely postpones probate.

 

  1. I don’t need to do any estate planning because I own much less than the federal estate tax exemption. Don’t confuse estate planning with estate tax planning. Estate planning is about making sure your assets will go to the people you want to have them with the least amount of delay and costs. Good estate planning also includes a plan for incapacity. This is something everyone needs to do, regardless of the size of your estate.
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The Advantages of a Land Trust

 

Should I have a Land Trust OR Transfer On Death Instrument (TODI)?

Well, here are the similaries; both documents allow property to pass property from one person to another without probate.  AND THATS IT!

  1. The TODI must be recorded with the County Recorder of Deeds office before the owner passes, making the owners information public as well as the beneficiaries.  This is a major privacy concern and only a Land Trust can keep your personal information offline.  In the Land Trust,  the Trustee protects your privacy and will only disclose this information if required by law.
  2.  The TODI is also only applies to residential properties.  A Land Trust can be used for all types of properties including, but not limited to, residential, commercial, investment and industrial.
  3. In order to amend a TODI, the owner must follow a tedious process of re-drafting, and recording both a revocation of the previous TODI and a new TODI.  With a Land Trust, all you have to do it fill out a one page form and send it back to the title company.
  4. In order to establish or revoke a TODI, Power of Attorney documents cannot be used.  With a Land Trust, a Power of Attorney can be use to establish, amend or revoke a trust.
  5. A Land Trust Protects you from judgement liens, A TODI doesn’t protect you or your beneficiaries.

Land Trust is the way to go!

Home Buying 101

Home Buying 101

Closing your home in a Land Trust is EXTREMELY  important when estate planning, there’s also privacy benefits…

Looking to purchase a home? Already in the process? Well, take a moment to consider these things BEFORE finalizing a new purchase. Closing you home in  a land trust not only secures a legacy, but also protects personal information online. When closing a home in a Land Trust, all your personal information regarding the purchase of the home is kept OFF LINE.  Your name will NOT appear when the property address is searched, only a trust number will appear.  This keeps eager “house hunting enthusiasts” from digging into any personal business.  Here are so other useful tips when purchasing a home for the first time. Here are 3  checklists you need to keep in your back pocket!

 

Real Estate Checklist

  • Get pre-approval for a mortgage
  • Hire a Real Estate Broker
  • Look at several properties
  • Negotiate sales price and get a contrac
  • HIRE A LAWYER and deposit earnest money
  • Get a home inspection and appraisal
  • Have your ATTORNEY schedule the closing date
  • Do a final walkthrough of the property
  • Have the balance of down payment and other documents required from the lender
  • Be prepared to sign final documents and close in a Land Trust

 

Important Documents for Closing

  • The deed – A document that transfers the property from seller to buyer.
  • The Bill of Sale – This transfers all personal property being sold along with the home.
  • Affidavit of Title or Seller’s Affidavit – This document is a notarized statement by the seller confirming ownership of the property and describing an known title defects.
  • Transfer Tax Declarations – Many states, counties and municipal governments charge real estate property transfer taxes and require the buyer and seller to sign declarations disclosing the purchase price and tax.

 

What does the closing Attorney do?

  • Title Examination – The closing attorney will identify any existing mortgages against the real estate that will need to be satisfied at closing in order to transfer good title.
  • Title insurance –  Title insurance protects the purchaser and the lender in the event a future problem is found with the title.
  • Coordinator – The closing attorney creates lines of communication between many parties for the real estate closing.
  • Review of documents –  On the day of closing the closing attorney is present to review the various instruments associated with the real estate and loan closing.
  • Record and disburse –  The closing attorney is responsible for closing on the transaction and distributing all monies.

 

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Why You Want To Avoid Probate?

Probate is the legal process used to validate your will and settle your estate. It can be costly, take time, expose the details of your estate to public scrutiny, and freeze assets at a time when loved ones may need them most. Any assets that you can pass on without a will (by asset titling or naming beneficiaries) can go directly to heirs with no need to wait for the probate process.

Probate costs: 1%–6% of estate’s market value

Time required: 6–9 months minimum; can be 2 or more years on average.

So, what does this mean for my family?  This means…

1.)  Wasting time and money on probate court.

2.) Eliminating privacy – probate court is public record.

3.) Maximizes emotional stress on your family.

4.) Doesn’t protect from beneficiaries’ creditors, spouses, divorce proceedings, irresponsible spending and future death taxes.

5.) Allows the court to control inheritance of minor children. If you want to delegate specific amounts to money to children, your preferences are not considered. Everything is left for the courts to decide.

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Estate Planning in Chicago

Chicago Estate Planning

Estate PlanningDid you know that if you do not create your own estate plan, the state and IRS have created one for you?

Most people are completely unaware of this and their heirs are often surprised and disappointed at the consequences. Only through a carefully considered estate plan can you have complete control over who receives your legacy.

Proper estate planning is crucial for the protection of those you love.

We will work to ensure taxes do not consume too much of what you have accumulated over many years of hard work and that your financial legacy is passed on to your loved ones. Our goal is to ensure that your belongings are passed down to the people that you choose at the time you choose, and under the conditions that you choose – and not pursuant to the state’s plan.

Even if you have an existing estate plan, did you know that an incomplete or outdated plan could be worse than no plan at all? At the Ted London and Associates, we review many Chicago estate plans and often find their original objectives to be obsolete, and changed circumstances to be completely unaddressed. We will be happy to review yours.

A good Chicago estate plan is also a way of preserving your family’s legacy – protecting the assets you have left to your children or grandchildren from creditors, predators or, in some cases, from your children themselves. At the Morton Law Firm, we can create the proper type of plan that will protect your hard-earned assets from passing to anyone other than those you intended.

Why Plan Your Estate in Chicago

The knowledge that we will eventually die is one of the things that seems to distinguish humans from other living beings. At the same time, no one likes to dwell on the prospect of his or her own death. But if you postpone planning for your demise until it is too late, you run the risk that your intended beneficiaries — those you love the most — may not receive what you would want them to receive whether due to extra administration costs, unnecessary taxes or squabbling among your heirs.

This is why estate planning is so important, no matter how small your estate may be. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs and attorneys’ fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

All estate plans should include, at minimum, these important estate planning instruments: a durable power of attorney, a will, and a medical directive. The first is for managing your property during your life, in case you are ever unable to do so yourself. The second is for the management and distribution of your property after death. In addition, more and more, Americans also are using revocable (or “living”) trusts to avoid probate and to manage their estates both during their lives and after they’re gone.

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Benefits of a Living Trust in Chicago

A LIVING TRUST IN CHICAGO

Many people  in Chicago now choose a living trust instead of relying on a will or joint ownership in their estate planning. A properly prepared and funded living will can provide many benefits for you and your loved ones.

Here’s how a Living Trust helps you….

  • Avoids wasting time and money on probate court (multiple probates if you own assets in more than one state).
  • Provides easier, more efficient administration of your estate
  • Gives you and your family maximum privacy by avoiding public court processes.
  • Minimizes emotional stress on your family.
  • Brings all of your assets into one plan controlled by one set of instructions.
  • Prevents unintentional disinheriting
  • Lets you keep assets in the trust until your beneficiaries reach the age(s) you want them to inherit.
  • Can continue longer to provide for a loved one with special needs.
  • Assets can remain in the trust and be protected from beneficiaries’ creditors, spouses, divorce proceedings, irresponsible spending and future death taxes.
  • Prevents the court from controlling inheritance of minor children.
  • More difficult than a will to contest.
  • Provides effective pre-nuptial protection.
  • Can be changed or cancelled at any time.
  • Can include tax planning to reduce or eliminate state and/or federal estate taxes.
  • Lets you keep maximum control while you are living (even if incapacitated) and after you die.
  • Peace of mind.

HOW MUCH DOES A LIVING TRUST COST IN ILLINOIS?

It will probably cost more initially to set up a well-drafted living trust than to have a will prepared. One reason is that a living trust has more provisions because it deals with estate management while you loved one is still living opposed to a will which is only valid after the passing of a loved one. When comparing costs, remember that the true cost of a will must include the costs of probate which is still required when you pass away, possible conservatorship if you become incapacitated and the costs of a guardianship if you leave assets to minor children.

After weighing the costs and benefits, it is easy to see why so many people and professionals prefer a living trust.

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Consequences of No Estate Planning

“We as African Americans have the capacity to pass on more wealth than any previous generation—wealth needed to continue to finance the progress and empowerment of future generations. But this potential cannot be realized if we don’t collectively commit to estate planning. Merely buying enough life insurance to cover the costs of our burials may have been acceptable for our parents, but it’s not even close to good enough for our children and grandchildren.

How big a crisis is this? Nearly 70% of African Americans estate plan in place. Not only does this put our ability to transfer wealth to future generations at risk, it also comes at a tremendous cost. Without an estate plan, your assets fall subject to probate. According to studies, probate costs surviving families a collective $2 billion annually—including more than $1.5 billion in attorney fees. Dying intestate (passing away without a valid will) not only blocks the transfer of wealth; it can leave a crippling financial burden to your heirs.

 

Estate planning means future generations not having to start from scratch to launch their businesses, or to finance the growth of those we leave to them. It means lessening our children’s and grandchildren’s dependence on student loans. It means providing the resources necessary to support the institutions, including historically black colleges and universities, necessary for the continued progress of African Americans.

To achieve all of this and more requires us to establish an estate plan NO WILLS!not tomorrow, or someday, but NOW! And once those are in place, it also means reviewing and updating these documents as necessary, as births, deaths, changes in marital status, and other life transitions take place.

Wealth building is not just about financing our lives; it’s about leaving a legacy for our children, and their children, to build upon. Our commitment to black financial empowerment requires us to put in place the tools and measures necessary for preserving and transferring our wealth, no matter how much—or how little—we believe we have, to future generations”.

– Earl G. Graves Sr. is the Founder and Publisher of Black Enterprise.

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Setting Up Estate Planning to Help Your Senior Parents?

93% of the parents surveyed feel it would be unacceptable to become financially dependent on their children, yet only 30% of children feel the same.

“While family conversations around important topics such as retirement preparedness, eldercare, and estate planning can be difficult and aren’t always easy to initiate, parents approaching retirement might be pleasantly surprised to discover their kids expect to help,” say survey researchers.

In addition to illuminating the differing attitudes between both groups when it comes to financial eldercare, the study also shows a disturbing lack of communication when it comes to health and estate planning.

  • 92% of parents expect one of their children to be the executor of their estate
  • Only 27% of the kids identified as filling the role knew this
  • Just 40% of the children identified as being the long-term caregiver were aware
  • and just 36% of the children identified as managing finances when their parents are unable knew this was his or her parent’s plan

“These discrepancies highlight the fact that many families need to do a better job of being on the same page when it comes to financial planning” says John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity.

Fidelity suggests families:

  • Initiate family discussions earlier. These conversations should begin taking place before retirement, and certainly well before any challenges arise.
  • Ask as many detailed questions as you can. Don’t be afraid to ask even the most seemingly obvious questions.
  • When having discussions, follow the “voice not vote” rule. While family members should have a role in the planning process, make sure the ultimate decisions made are consistent with the wishes of the parents, who are charting the course of the rest of their lives.
  • Define family roles. Advanced planning can help define roles and choose when and how different people will be involved. It’s also important to consider the personalities of each child, as well as their proximity, relationship with parents, and other nuances that play into long-term decision making.

Sweeney adds that it’s important to schedule as many get-togethers as needed—and revisit those plans at least annually, to make sure they still make sense.

We Care About Your Family… Do You?

The Family Care Expo is one-day resource fair and forum designed to provide you with the resources, products, and information to create a better future for you and your loved ones.

With over 30 exhibitors present, the expo will feature workshops , clinics, and one-on-one consultations. Looking to get informed? A broad range of topics will be covered, including:

-Immigration
-Expungement
-Estate planning
-Downsizing
-College planning
-Disability resources

JOB OPPORTUNITIES

There will be job opportunities available at WVON’s Family Care Expo on Saturday in the healthcare field. Become a Care Coordinator or learn how to earn while caring for your loved ones at home as a caregiver. This workshop starts promptly at 10am at Malcolm X College, 1900 West Jackson Blvd. The workshop is free because WVON is cool like that!

Sponsored by Meridian Health Plan!

 

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