As you are probably aware, there are many different ways to distribute your assets at death.
As estate planners, our goal is to present the different options currently available, and then allow you to make an informed decision as to the best possible plan for your individual needs.
Answers to the most Frequently Asked Questions about Trustee, Guardianship and Executor Services
Answers to the most Frequently Asked Questions about Bankruptcy & Debt Consulting
Answers to the most Frequently Asked Questions
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A will guarantees probate. The word "probate" comes from Latin and means, "to prove the will". Having a will may not be the best way to plan your estate.
The court must verify all wills before they can be enforced. A will can only go into effect after you die, with no protection if you become mentally or physically incapacitated during lifetime.
A Living Trust avoids probate and is less likely to be modified by the courts if challenged by unhappy family members at your death or disability.
A Living Trust is a legal document that allows you to give what you have to whom you want, when you want and in the way you want. The trust can be changed or revoked according to your wishes while you are alive.
The trust avoids probate and can reduce or eliminate estate taxes provided that it is personalized to your needs, properly planned and properly drafted.
Death probate is a process that makes sure, when you die, your debts are paid and your assets are distributed according to your will.
Living probate is a process by which the court can take control of your assets, decide who should take care of you, and determine how you should be cared for in the event you become incapacitated.
It is expensive! A significant portion of your estate's gross value goes for legal/executor fees and court costs.
It is time consuming! Assets are frozen subject to probate court action during the probate process which lasts at least 6 months, and a year on average.
It is required in every state where you own real estate! There will need to be a separate probate proceeding in every state where you own real property, including vacant lots, vacation property, investment property and timeshare interests.
It is public! Anyone can read the probate files to see what you owned, who you owe, to whom you gave your assets and where those beneficiaries live.
No. It will only delay probate until the surviving joint tenant dies. The property is then probated before it goes to the heirs.
Yes. While an estate under $5,000,000.00 (for 2011 and 2012) is free from federal estate taxes, you will probably not avoid a living probate if you become disabled or a death probate when you die.
Remember, probate and federal estate taxes have nothing to do with each other. Estate taxes are paid to the federal government for the right to transfer property at your death.
Probate fees and costs are paid to the probate court, attorneys and the personal representatives of your estate for supervising the administration of your estate and distributing assets to your beneficiaries.
Trustee/Guardianship fees are based upon mutual agreement between the client and WEBSTER & SCHELLI. Generally, fees are based upon one of two methods:
The annual trustee fee is 0.5% of the value of the assets of the estate on the first $5,000,000.00 and 0.3% on the next $10,000,000 and 0.2% on any amount in excess of $15,000,000.00, excluding the value of real estate and any structured settlement annuities. The trustee fee is paid quarterly, in advance, based upon the value of the assets of the trust estate on the last day of the preceding calendar quarter.
No additions fees will be charged for tax services, holding of special assets or extraordinary services.
There are several “Chapters” of the bankruptcy code. Most individual debtors will chose between a Chapter 7 and a Chapter 13 bankruptcy.
Chapter 7 bankruptcy is known as a liquidating bankruptcy. A Chapter 13 bankruptcy is a reorganization, or payment plan bankruptcy. Most individuals would prefer to file a Chapter 7 bankruptcy. There are three general factors that could cause a debtor to choose a Chapter 13 instead of a Chapter 7. The first factor is having too much equity in the debtor’s assets. In this situation the debtor would file a Chapter 13 bankruptcy and pay the Trustee an amount of money at least equal to the “excess” equity in their assets. The second factor for filing a Chapter 13 is to stop a foreclosure or repossession of the debtor’s assets. A common example would be a debtor who, due to illness or unemployment, has fallen behind in their house or car payments but now is working and can afford to make the regular payments and perhaps a little more to catch-up on the arrearage. The lender, however, wants all the back payments immediately or they threaten to foreclose on, or repossess, the asset. If the debtor files a Chapter 13 bankruptcy the court, upon confirmation, will force the lender to allow the debtor additional time to pay back the arrearage. The third major factor causing the debtor to file a Chapter 13 bankruptcy would be if a debtor makes too much money as determined by a surplus in their budget (before deducting credit card payments) or if their income exceeds the median income for a family of the same size in the county where the debtor resides.
The means test is an objective calculation created by the Bankruptcy Reform Act that became effective in October 2005. The means test starts with comparing the debtor’s gross income to the median income for a family of the same size in the state and county where the debtor resides. If the debtor’s income is lower than the median income, it is said that the “presumption of abuse” does not arise and the debtor can file a Chapter 7. If the debtor’s income is higher than the applicable median income, the means test has additional calculations to determine whether the debtor’s personal expenses on its secured debt or medical expenses exceeds the average and thus might still allow the debtor to file a Chapter 7 bankruptcy. The means test is quite complex and in some situations a debtor may qualify for a Chapter 7 bankruptcy, notwithstanding personal income that exceeds the median income by thousands of dollars.
No. Tax deferred, tax qualified, retirement assets are considered exempt assets in Illinois.
Personal injury claims are only exempt up to the first $15,000.00. Any award in excess of $15,000.00 would likely be claimed by the Trustee to distribute to your unsecured creditors. Workman’s compensation claims are completely exempt under Illinois law so long as the debtor keeps the proceeds from that type of claim segregated from their other assets.
No. You can payoff any debt of your choice after your bankruptcy, but the Trustee can retrieve payments made up to a year in advance of your bankruptcy filing if paid to a friend, family member, or business associate.
There are several specific dates that apply to someone who has filed a personal bankruptcy. The bankruptcy will be reported on your credit report for up to 10 years, the same length as most other information, good or bad, is reported. Another date that is often confused is the time limit before a debtor is eligible to file another bankruptcy. In the case of a Chapter 7 debtor they cannot file another Chapter 7 bankruptcy until eight years after the date of discharge from the prior bankruptcy. The time period for your credit score to recover is not governed by any law; but, instead, your credit score and availability of credit is governed by the practices of lenders. In some cases, credit scores can increase by up to 100 points in the first 18 months after your bankruptcy. Some lenders will make offers to debtors immediately after filing their bankruptcy, although these offers tend to be high cost, high interest, low limit offers. 12 to 24 months after your bankruptcy most debtors who work to rebuild their credit scores will find themselves getting credit card offers from more traditional credit card issuers. Finally, most individuals find that they would be eligible for any loan as early as 36 months after their discharge, provided they make all their post bankruptcy payments timely and work to rebuild their credit scores.
Yes. Because your initial consultation will be with Mr. Schelli (as opposed to an intake clerk or paralegal) we charge $200.00 for the initial consultation. Consultations typically last between one and one and one-half hours and the fee represents approximately one-half of Mr. Schelli’s normal billing rate. The $200.00 consultation fee is, however, applied against the bankruptcy fee ultimately charged. Therefore, if you were to hire Mr. Schelli to represent you in your bankruptcy, the initial consultation really does not cost any extra.
Mr. Schelli’s bankruptcy practice is different than many other practitioner’s in that he conducts the initial consultation, he will work with you directly in completing and reviewing your petition, and he will be with you at your Section 341 Creditor’s Meeting. When comparing the services of other firms it may be wise to ask whom you will be dealing with, as well as whom will be returning your telephone calls if you should call with a question.
The 2005 Bankruptcy Reform Act did create the requirement that debtors take both a pre-filing credit counseling course as well as a post-filing financial management training course. Fortunately, both courses can be taken online or on the telephone from the privacy of your own home. Webster & Schelli has arranged an agreement with a service provider that will be billed to the firm and will be included in the cost of your bankruptcy.
While each case is unique, generally the legal fees for a Chapter 7 bankruptcy range from $3,000.00 - $5,000.00. Some very straightforward cases may be slightly less. Additionally, Mr. Schelli has the ability to discount further if the facts and the debtor’s ability to pay warrant a hardship exception. Mr. Schelli will determine a fixed fee and payment arrangements at the initial consultation.
Probate is a legal preceding that supervises the collection, liquidation and distribution of the Decedent’s property.
No. Some or all of the Decedent’s property may be held in Joint Tenancy, in an account with a “Payable upon Death” or beneficiary designation or held in the Decedent’s Trust. Simply put, probate property is any property that is not titled in such a way as to provide a successor owner.
In fact, it is very common that some of the Decedent’s property in not owned by the Decedent’s Trust. Some property gets overlooked or could not be put into the Trust. Some property, such as a personal injury claim or a wrongful death claim does not even exist until the Decedent’s death. For these reasons most Estate Planning attorneys provide their Trust clients with a “pour over” Will to control any of the Decedent’s property not owed by his or her Trust at the Decedent’s date of death.
Generally all probate assets have to go through probate. However, Illinois allows a simplified, less expensive, probate procedure if the total of all probate assets are less than $100,000 and all claims against the Decedent’s estate have been paid.
The length of time a probate proceeding may last depends upon many factors. All probate proceeding must remain open for a minimum of six months after the first date the notice of the probate proceeding is published in the newspaper. Most probate proceedings last between 12 and 24 months but some can be open for many years.
An Executor is named in the Will to handle the administration of the estate. An Administrator is used when there is no Will or if all the named Executor can not or will not serve. The Administrator does the exact same job as the Executor but but has to petition the court to become the Administrator.
Unless specifically waived by the Decedent in his Will, the Court will require the Executor to purchase a surety bond to insure that the Executor does not abscond with the assets of the estate. Most Wills however waive the requirement of a bond of any named Executor. Administrators will always need to purchase a bond.
A Legatee is someone who has been named in a Will as a beneficiary. An Heir is a person related to the decedent who would inherit some or all of the decedent’s property if the Decedent had no Will. A person can be both an Heir and a Legatee.
Typically an Executor or Administrator petition the court for unsupervised administration. This means that they do their job without direct supervision of the court and are required only to provide a First and Final accounting to the heirs and legatees. Any party of interest (i.e., an heir, a legatee or a representative of a minor heir or legatee) can petition the court to demand a supervised administration or that an independent administrator be appointed.
The property will not be lost to the State. Occasionally, banks, financial institutions and other entities will turn over unclaimed property to the State but the property can always be claimed by the rightful owners or heirs.
Generally, the most recently dated Will is the Decedent’s correct Will. Most Wills begin with language stating that “This is my Last Will and Testament, hereby revoking all my prior Wills and Codicils made by me”. However, If the Decedent left more that one originally executed Wills you should keep all of them until the Court have admitted the correct Will.