Pour-Over Wills in Illinois
Everyone works hard to build wealth. It's understandably hard to give up control during one's lifetime, but most people still want to have a say in what happens to their property upon their death rather than leaving it up to nameless faceless lawmakers a hundred miles away. A common solution is to establish and "fund" a living trust with some, or even most, assets - that means the trust would continue to hold that property at the time of your death and can continue with a trustee you choose and be dealt with as you decide. But what happens if there are assets at the time of your death that didn't get funded into the trust? How can a trust maker (called a "settlor" in Illinois law) make certain those assets will be administered according to their wishes? A pour-over will in Illinois is often an important part of the solution.
At Fagan, Fagan & Davis, our estate planning attorney in the Chicago area will review your estate and develop a plan aligned with your wishes, and address any concerns you might have. A pour-over will is a valuable and often vital tool in an estate plan, and we will discuss what it can (and cannot) do. Contact us today at (847) 635-8200 to schedule a brief, free initial phone consultation and to learn more about estate planning and pour-over wills.
What Are Pour-Over Wills?
To understand what constitutes a pour-over will, it is important to understand just a bit about revocable living trusts. A living trust holds the assets of the settlor - again, in Illinois this means the person creating the trust. A trustee is a person with the fiduciary responsibility of managing the assets in the trust for the benefit of the beneficiaries. In most cases, revocable living trusts Living trusts are revocable, and to be valid, they must be funded. In other words, they must actually hold assets. When the settlor passes away, there may be assets that have not yet been transferred into the living trust. That is where the pour-over earns its place in an estate planning portfolio.
A pour-over will is a type of will stating that any assets or property owned by the settlor at their death will transfer (or pour over) into the trust. The transfer is automatic, as the living trust and pour-over will were created prior to the death of the settlor.
Who Needs a Pour-Over Will in Illinois?
Anyone who wants all their assets that can be moved into their existing living trust at the time of their death should consider a pour-over will. Even with the best-laid plans, life can be unpredictable, and one or more assets may not be transferred into the trust while the testator is alive. A pour-over will can be viewed as a safety net, catching all the assets that the testator did not transfer into the trust while they were living, and transferring them after they pass away.
There are other times when a testator simply forgot about an asset or was not aware of the asset. For example, they may have inherited the asset shortly before their death and had not yet been made aware of its existence. A pour-over will is able to move all of these assets into the trust.
What is the Difference Between a Will and a Pour-Over Will?
A regular Last Will & Testament (“will”) is a way for a testator (the person creating the will) to leave final instructions on how they want their assets distributed. It is a way for them to name who they wish to receive their belongings after they are gone, as well as who they desire to have custody of their minor children. The testator appoints a personal representative ( this is the term used in Illinois for what many commonly refer to as an "executor") to distribute the assets as directed by the will and according to the law.
A pour-over will is generally a simpler document whose purpose is to transfer any assets owned by the testator at the time of their death into the living trust. Simply put, an Illinois pour-over will acts as a backstop.
Probate and Pour-Over Wills in Illinois
Probate is a court-supervised process wherein the decedent's estate is administered. It requires mandatory publication (an invitation to all potential parties to engage in litigation) and involves paying creditors and distributing assets. It can be a tedious, time-consuming process, and it's also a public process. Illinois law requires the process to take no less than six months, and local county rules can extend that - for example, Cook county generally requires no less than 14 months before a probate can be closed. One of the reasons so many people choose to use living trusts in their estate planning is because of their ability to avoid probate. However, all wills, including pour-over wills, must go through the probate process.
Depending on your circumstances, it may be a good idea to have a pour-over will in place if you want all your assets handled through a trust when you die. However, in most cases, it is best to still transfer most if not all assets into the trust while you are alive and have the pour-over will in place just in case it is needed. The reason is twofold:
Assets placed in a trust avoid probate while those that go through a pour-over will might not be able to avoid probate; and
A pour-over will can be challenged, creating costly and time-consuming litigation.
Keep in mind though that some jurisdictions allow some assets (especially those that do not satisfy a certain threshold amount in terms of value) to avoid probate. In this situation, some people may transfer their larger assets into the trust, leaving out smaller assets that do not meet the threshold, thus, avoiding probate. Illinois generally requires any estate with a total value of $100,000 or more to go through probate, but if your assets outside the living trust do not exceed $100,000 in value, then these assets will not go through probate, and other means can be used such as a "small estate affidavit".
An estate planning attorney knows the laws and rules of your jurisdiction. At Fagan, Fagan & Davis, we will help you determine if a pour-over will is necessary and, if so, what assets are best transferred into the living trust.
Do You Need an Estate Planning Lawyer for Pour-Over Wills in Illinois?
A pour-over will is typically executed at the same time other estate planning documents are, such as a living trust. Because these legal documents must adhere to certain rules and legal standards to be valid, it is in your best interest to consult with an estate planning lawyer. An attorney experienced in this area can review your particular circumstances, and if a pour-over will is needed, can prepare it for you.
Contact an Estate Planning Attorney in the Chicago area Today
At Fagan, Fagan & Davis, our estate planning lawyer based in the Chicago area is committed to drafting solid, comprehensive estate plans that work for you and your families. We aim to save your loved ones time and money upon your death. We also want to make sure that while you live and grow your estate, you benefit from the estate plan as well. Contact us today by filling out the online form or calling us at (847) 635-8200 to schedule a brief, free initial phone consultation.