Tag: Estate Planning

Have You Looked at Your Estate Plan Documents Lately?

Does this sound familiar?

“John and Mary kept delaying any discussions about preparing estate planning. After they had their first child, Jack, they finally decided it was time to discuss their estate plan with a lawyer. They set up a trust for Jack if anything happened to John and Mary and designated John’s parents, who were then 65, as Jack’s guardian and the trustee of the trust. Since they had meager assets, they left everything outright to him at age 25. John and Mary ignored these documents and made none of the transfers recommended by their lawyer to avoid probate.

Ten years passed by. They now have three children, Jack, (10) Jackie (7) and Maureen (4). Jack’s parents have moved away to enjoy warmer climates.

John and Mary should revisit their estate planning desires. Are his parents still capable of raising their children? When Maureen is 16, Jack’s parents will be 87. Have Jack and Mary considered planning possibilities for their digital assets? What about their business? Can it operate after they are no longer able to manage it? Are their children able to handle their inheritance as originally planned? Are John and Mary’s health care powers and living will directions up-to-date? Have they considered the effect that taxes and probate might have on their plan? Are there any other special circumstances they need to plan for?

We recommend you review your estate plan every 2-3 years or more often based upon your changes in family and your finances. Isn’t it time you reviewed your estate plan??

To discuss any questions you have regarding your estate plan or for a complimentary estate plan review, please contact:

Morris Saunders at:

msaunders@lgattorneys.com or (312) 368-0100.

Have You Planned For The Disposition Of Your Digital Assets?

Many of us have accounts with Facebook, Twitter, Instagram, Google Mail, and similar accounts, digital files such as photos, music, movies, and also online accounts with banks, merchants and others. These types of files and accounts are often referred to as digital assets. Have you ever thought about what would happen to those digital assets upon the disability or death of the owner? Does anyone have the right of access? Does anyone have the right to keep the asset or to destroy (discontinue) it? If nothing is done, the keeper (“custodian”) of those digital assets may eventually terminate the asset and delete them.

Digital assets are generally governed by a complex set of Terms of Service, which are drafted to protect the provider of the service – not the user.

Illinois recently passed The Revised Uniform Fiduciary Access to Digital Assets Act, which may provide certain fiduciaries with access to your digital assets. This Act, while appearing to provide access to a deceased user’s digital assets, may not provide complete access. So, what should you do?

  1. Make an inventory of your digital assets and make sure it is accessible to those whom you trust. Include the name of the internet site, your user name and your password, and if applicable your account number and other relevant information.
  1. Provide in your estate planning documents that your trustee, executor or other fiduciary has the power to be granted access to your digital assets. OR, perhaps you do not want anyone else to be granted access. In that event you should expressly prohibit access to anyone else.

If you would like to discuss your estate planning, including the disposition of your digital assets, please contact:

Morris R. Saunders at:

312-368-0100 or at msaunders@lgattorneys.com.

 

Powers of Attorney v. Guardianship: How They Interact

Powers of attorney are an essential piece of the estate planning puzzle.  There are two types of powers of attorney in Illinois.  A “power of attorney for property” appoints an agent to make financial decisions for the principal; meanwhile a “power of attorney for health care” appoints an agent to make day to day living and health care decisions for the principal.  In an estate planning context, powers of attorney are usually used to ensure someone you trust is in place to make the difficult decisions that, due to unfortunate circumstances, you are not capable of making yourself.

But powers of attorney are revocable by the person making the power of attorney, at any time.  755 ILCS 45/3 et seq.  So, what happens when someone slowly loses the ability to make his or her personal and financial decisions and does not realize it?

This is all too common in the case of someone suffering from dementia.  The person executes a power of attorney (let’s call him Steve) while still fully cognizant and appoints an agent (let’s call her Sally) to act for him in the event he becomes disabled.  But now Steve has slowly lost the ability to make decisions, and is unable to recognize the extent of his own decline.  Steve wants to continue living alone but he is unable to safely do so, and Sally finds herself in conflict with Steve over what is in his best interest.  Or alternatively, problems could arise if Sally decides that Steve should continue to live alone, when it is not in his best interest.

Under such circumstances, a guardianship may be necessary.  As noted above, Steve may revoke the power of attorney at any time, even if he no longer as capacity to make his own decisions.  The law provides that any interested person, including the agent under the power of attorney, may petition the court to construe the power of attorney and review the agent’s conduct under the power of attorney.  755 ILCS 45/2-10. Depending upon the court’s findings, the court may uphold the power of attorney or revoke the agency.  If the court revokes the agency and finds that the holder of the power of attorney disabled, upon appropriate petition, the court will likely appoint a guardian.  The guardian will have the authority and responsibility of making the personal and financial decisions for the disabled adult under the watchful eye of the court.

Using our example above, if Steve advised others that he orally revoked his power of attorney and Sally feared for Steve’s safety, Sally could petition the court to have herself appointed as Steve’s guardian. Likewise, if another interested party (including Steve) believed that Sally was not acting in Steve’s best interest under the power of attorney, that party could petition to revoke the powers and appoint a different person as Steve’s guardian.

If the principal and the agent are acting harmoniously under the power of attorney, it is a preferable arrangement to guardianship.  If the disabled adult has any assets, Guardianship comes with considerable additional financial burdens, including the entry of a probate bond, guardian ad litem fees and attorney’s fees related to administration of the estate.  However, when the principal under the power of attorney and the agent disagree as to what is in the principal’s best interest, or if an interested party believes that the agent is not acting in the best interest of the principal, then a guardianship proceeding may be necessary to either appoint a guardian or to give the agent the authority he/she needs to keep acting in the best interest of the principal.

If you would like to learn more about the adult guardianship process or if you need assistance preparing an estate plan, please contact:

Robert G. Cooper at:

rcooper@lgattorneys.com or 312-368-0100.

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