ESTATE PLANNING & PROBATE: BASIC TERMS
What is a Last Testament & Will??In a will, a person (testator) directs the manner and method of distribution of property ? real estate, tangible or intangible, and personal property. The purpose of a will is to indicate to the Court the manner in which the person wants his or her estate handled and settled. It is entirely revocable and can remain private until the time of death. The original will must be filed with the Court after the person?s death in a timely manner.?
What is a Testator???A ?testator? is the person who makes a will. If a person dies with a will, then he or she is said to have died ?testate.? If the person dies without a will, then he or she is said to have died ?intestate.? When a person dies intestate, estate administration and the right to receive distribution are controlled by Probate Act of 1975,755 ILCS 5/1-1, et seq.
What is Probate??Probate is a statutory process for administering an estate. There are many types of assets that are not subject to Probate, such as joint tenancy property (property owned together), life insurance, retirement benefits, and trust assets.
What is Per Stirpes??It is a term used to define distribution of an estate by right of representation.
For example, if a parent has three (3) children, then these three (3) children would each receive an equal one-third share after the parent?s death. If one of the children predeceases (dies before) the parent, but left three (3) children (grandchildren to testator or decedent), then the two surviving children would each receive a one-third share. The three grandchildren would receive equal shares of their deceased parent?s one-third share
What is Intestate??If a person dies intestate, the person?s estate passes by ?intestate succession,? which means that the persons who are entitled to receive distribution are determined by the rules set forth under Article 2 of the Probate Act,?755 ILCS 5/2-1, et seq. This section of the Probate Act also provides rules for dealing with illegitimate children, posthumous children, and adopted children.
What is a Trust??A Trust is a method of holding title to an asset that is established when a grantor transfers possession of the asset to a trustee together with instructions on how to hold, manage, and distribute the asset. A Trust is a very useful tool in planning for larger estates and is flexible enough to accommodate a variety of circumstances and distribution plans.?Trusts may be revocable and irrevocable.
What are Tenants in Common??Tenants in Common own undivided interests in the same property; however, each person is the owner of only his or her separate share. There is?no right of survivorship?in property owned as tenants in common, and this property is a probate asset.
What is Joint Tenancy??If assets or property are held in Joint Tenancy?with rights of survivorship, such assets or property will?transfer?automatically?to the survivor at death. These assets are not subject to claims against the estate of a decedent. This type of ownerships should not be subjected to probate.
What is Tenancy by the Entirety??Tenancy by the Entirety is a method of holding property that is limited to ownership of a?marital home by a husband and wife, and this type of ownership carries a right of survivorship. When property is held in Tenancy by the Entirety, it is subject to judgment liens only for debts of both spouses.
What is are Payable-On-Death Accounts??Payable on Death Accounts are contractual arrangements with financial institutions and not probate assets. Persons may establish Payable-On-Death (POD) designations with regard to bank accounts, savings accounts, loan accounts, credit union accounts, certificates of deposit (CD?s), and U.S. savings bonds. Persons retain complete control over his or her funds until death. The named beneficiary has no rights to the account until the account holder?s death, but has complete access afterward.
What is a Residential Transfer on Death Instrument (a/k/aTODI)??Under 755 ILCS 27/1, et seq., the statute permits an owner to transfer residential real estate to one or more beneficiaries with the condition that the conveyance does not become effective until the death of the owner. The TODI must be signed and witnessed in a manner similar to a will and be recorded before the owner?s death. The TODI deed is revocable during the owner?s lifetime. The owner retains and keeps the right to sell or encumber his or her real estate. The beneficiary of a TODI deed must file a Notice of Death Affidavit in the county recorder?s office within 30 days of the owner?s death.
About the Author:
Stephanie A. King?practices in the areas of Estate Planning & Asset Protection, Guardianships, Probate, and Personal Injury. Stephanie is?licensed to practice law?in Illinois and Missouri and practices?in the following counties, Madison County, IL, Jersey County, IL, St. Clair County, IL, Macoupin County, IL, Montgomery County, IL, Greene County, IL, Calhoun County, IL, Bond County, IL, and Monroe?County, IL.?Stephanie also represents clients throughout the St. Louis Metropolitan Area and Missouri.
