Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

When you give someone a gift you sign a check. When you buy a meal in a restaurant you sign a credit card receipt. When you sell your home you sign a deed.

In each of these situations it is your signature which marks that the sale has taken place.

If you wish to give assets to someone after your death something different has to happen. Since you can not sign after you have died, someone’s signature must be substituted in place of yours.

The judge, in probate court, substitutes his or her signature in place of yours. This way any money and property, which was in your name when you died, can get into the hands of the new owner.

This is one of the main purposes of the probate court.

The process is more complicated than I have described but when you boil it down, we are getting stuff out of your name and into the name of the people you let it to in your will.

There is nothing wrong with the process. Probate allows for the orderly passing of assets from generation to generation.

The reasons which most people give for wanting to avoid probate can be boiled down to these:

1. Probate takes too long. Probate generally takes between 1 and 2 years. During the process the family must relive the death of their loved one with each new letter and each meeting with the executor. If the process can be made shorter then the family will be able to come to closure more quickly.

2. Probate costs too much. The fees for Probate in Illinois can average around 5% of the estate. With home values over $300,000, in many cases, it is easy to see why people would like more of their money to go to their children and less to court costs and fees.

3. Probate is not private. The courts are public and so are most court records. Many people I talk with keep their financial matters private during their lives and tell me that they would like to keep their information private even after their deaths. It makes sense, then, to stay keep the estate distribution process private. This can be done by staying out of court.

Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

by Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

If you have a child with special needs then you have special issues to consider. When your child reaches the age of 18 she will become eligible for state benefits. If you or other family members give valuable gifts to your child you may endanger their eligibility for those benefits.

It is important that any gifts of cash or property be left to a specially written trust and not directly to your special needs child.

The special needs trust will name a manager who can hold and distribute assets for your child and still allow them to receive government benefits.

This type of trust is called a special needs trust. They are set up to provide for “special” needs. Those needs which are over and above the expenses paid for by government programs or by charitable organizations.

The trustee of a special needs trust is given strict instructions on how the trust assets may be used. The trustee may pay only those expenses that will not be paid for by a governmental agency or by a charity.

Trust assets may be used to provide extras that make life more interesting and fun for your child. The trust can pay for the extra things you would privide for your child if you were still here.

Example: If a State agency will pay for medical care then the special needs trust can not pay for doctor visits. If there is no State program or charity that will pay for summer camp for your child then the trust can pay to send your child to camp.

The estate plans of family members should be adjusted.

Your planning should include letting all family members know about the special needs trust. It is very important to make sure that their estate plans do not make gifts directly to the special needs child. It is much better for them to make gifts to the special needs trust.

Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

by Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

If I have a trust do I still need a will? A living trust can help manage assets during lifetime and can control the transfer of assets after death. Then why do I still need a will?

A will does 5 very important things.

* Cancels your old will.
* Names a personal representative (executor).
* Waives the bond on the personal representative.
* A will can act as a back-up document to a living trust.
* Names a guardian for minor children and for special needs children.

There are several ways to cancel your old will. You can tear it up. You can burn it. You can write “revoked” across the pages or draw large X’s on each page. The most common way is to write a new will. The first paragraph of your will normally revokes all of your former wills.

When your will goes to probate a person is put in-charge of the paperwork. This person is called a personal representative. They may also be called an executor. Most people have someone in-mind for the job. Your will should name a personal representative and a back-up in case your first choice is not available.

A bond is an insurance policy that guard against mismanagement or dishonesty by your personal representative. It helps make sure that assets that end up going through probate will not be stolen or wasted. Since many people name their spouse or a trusted family friend as their personal representative it seems unecessary to require that person to be bonded.

Every living trust should be accompanied by a short will know as a “pour over will.” This legal document is set up to make sure that assets are put into the trust even when the Grantor failed to get the job finished during their lifetime.

The most important job that your will does is to name a guardian for your minor children or for children with special needs. If you do not name a guardian then the court may need to appoint one. Most people tell me that they want to make these choices rather than leaving them up to the Judge in probate or guardianship court.

Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

by Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

A trust is a relationship between three people, the grantor, the trustee, and the beneficiary.

The Grantor’s job is to set up the trust and put money and property into the trust. The Trustee’s job is to manage the money and property that is placed inside the trust. The Beneficiaries job is to sit back and get the benefits of the trust.

The Grantor sets up the trust and puts their assets into it. The Grantor then picks a trustee who will manage the assets for the benefit of the beneficiary.

My mother spent her birthday with my sister in Tucson, Arizona this year. I sent my sister a check to buy mom some flowers on her birthday.

In that situation I was the Grantor, my sister was the Trustee, and mom was the beneficiary. I picked my sister to go shopping because I knew she would do what I asked her to do.

Every trust, large or small, has a Grantor, a Trustee, and a Beneficiary.

With a living trust you can be the Grantor, Trustee, and Beneficiary of your own trust. While you are able to manage your own money and property then you remain the Trsutee. Your trust will have, written into it, special provisions, that provide for a time when you become ill or when you are no longer able to manage your money and assets.

Within your trust are the names of the people or professional trsutees who will take over management for you. You name the people who will take care of your assets for you when you are unable to do it for yourself.

Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

by Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193

power of attorney describes a relationship between two people. The first person (we will call him “Tom”) thinks there may come a time when he will not be able to handle his own affairs. He may think that he will become ill or that he will be out of the country, such as while he is in military service, he may be on vacation for a period or time or he may simply have some things coming up which he would rather have someone else handle for him.

If Tom wants someone else to be ready to stand in his place and take care of important matters for him he may name a trusted friend, relative, or attorney to take care of business for him.

Tom has a friend who we will call her Sue. Tom can name Sue as his agent to take care of his business at the bank. When this is done Sue is said to have “power of attorney” for Tom. Sue is now authorized to act on the behalf of Tom. Sue will have papers with him to show that Tom has asked him to help.

These papers are known as a Power of Attorney. The papers are evidence that Tom trusts Sue to help him with his business matters.

Sue must be careful with the money and assets of Tom and Sue must never use Tom’s money for Sue’s benefit. Sue is a trusted person which is known as a fiduciary. As a fiduciary Sue must do only what is best for Tom.

Sue can get paid for being an agent. The fees must be reasonable but Sue can be paid for her efforts.

Powers of attorney differ in when the power starts. Sue can get her power right when the paper is signed or after Tom’s doctor says he is ill enough to need help.

Powers of attorney are also differ in when the power ends. the power of attorney papers show that the authority expires at a certain future date such as after Sue has finished selling Tom’s car.

The authority under some power of attorney papers can end when Tom becomes unable to speak for himself.

If a power of attorney grants authority which lasts beyond any disability Tom may have in the future is called a ‘durable’ power of attorney. It is said to be durable because it lasts through the disability.

In any case all powers of attorney end with the death of Tom. No authority lasts after Tom has died.

Tom Olofsson, Attorney at Law, www.MyTrustLawyer.com (773) 905-1193