Wills and Trusts
What’s a Will and what does a Will do?
A will is an instruction manual to the Probate judge. It tells the Court: (1) where a deceased person’s property should go; (2) who should be in charge of distributing that property; and (3) what sorts of conditions, if any, apply to the distribution of that property. A properly drafted Will substantially decreases the likelihood that an estate will be contested. A will can be changed at any time so long as a person has their wits and only goes into effect after the death of an individual.
What’s a trust and what does it usually do?
A Trust is usually an agreement with yourself that changes the future and/or present interests in property. A Trust is a technical document with complex legal implications. A Trust is typically used to avoid probate and for tax planning.
What’s a Power of Attorney? Why would I want a Power of Attorney?
A Power of Attorney is the opposite of a will. A will only goes into effect when a person is dead, but a Power of Attorney only goes into effect when a person is alive. A will gives property away, but a Power of Attorney does not. Instead, a Power of Attorney tells people to use property for the signor’s benefit. Designating a person as Power of Attorney is like nominating them to be your employee. The person nominated needs to use your own resources in a way that benefits you, the principle.
There are two flavors of Power of Attorney in Illinois. One nominates a person to manage your healthcare decisions for you. The other nominates a person to manage your financial affairs for you. I often have clients nominate me as a Power of Attorney for limited financial purposes. For instance, it can be used to give an attorney the limited ability to sign your name at a closing.