Author: Law Office of Andrew Szocka

What Is the Difference Between Irrevocable and Revocable Trusts?

When setting up a trust, you will need to decide whether it should be revocable or irrevocable. Choosing one of these two different kinds of trusts affects your involvement in the trust, its administration in general, taxes, and probate, among other things.

Revocable Versus Irrevocable

You can make changes to a revocable trust after you create it, including altering the language in the trust document or even removing property from the trust. Many revocable trusts provide that the trust creator (also called a grantor or settlor) receives distributions from the trust during his or her lifetime. After the trust creator’s death, other beneficiaries receive the distributions or the trust dissolves. A revocable trust gives the trust creator substantial control over the trust.

In contrast, the trust creator has little control over an irrevocable trust. After he or she signs the legal document, the trust language cannot be changed and property cannot be removed once it is placed in trust. The trustee maintains control over the property, with the responsibility to invest and manage it prudently. Beneficiaries receive distributions of income, dividends, or principal from the trust. While the trust creator can be one of the beneficiaries, this is less common than with a revocable trust.

Why Choose One Type of Trust Over the Other?

People who want to maintain control of assets and change their mind about trust property often prefer revocable trusts. However, assets held in a revocable trust could be considered part of your estate for probate and tax purposes. As a result, your estate might have to be probated or it might owe substantial taxes.

To attempt to keep this from happening, many people choose to relinquish control of revocable trusts on their deaths. The trusts may have language stating that they end upon death of the trust creator, or the trusts may convert to irrevocable trusts upon death.

People who want to remove assets from their estates immediately or who want trusts that begin operating after their deaths often prefer irrevocable trusts. If you maintain control over assets – even those in a trust – creditors may be able to access them. An irrevocable trust can protect against court judgments, child support assessments, or other creditor demands.

Alternatively, you may want a trust that only begins operating after you die. Various kinds of irrevocable trusts can distribute funds to relatives for many years after your death. Some people choose to “pour over” all of their assets into a trust by signing wills that give the assets to the trust. An estate planning attorney can help you choose the best method.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

How to Get Started Making an Estate Plan

If you would like to get started making an estate plan, you may not know which steps to take first. You will be on good footing if you assess which assets you own, think about your goals, and find a capable lawyer to help.

  1. Assess Which Assets You Own

Before you go see a lawyer to prepare your estate planning documents, it is a good idea to figure out exactly what you own. For example, you may have:

  • Real estate
  • Investments such as stocks, mutual funds, bonds, or ETFs
  • Retirement accounts like IRAs, 401(k)s, or pensions
  • Valuable items such as jewelry or cars
  • Cash

Make a list of your accounts and your assets to bring with you when you meet with lawyers. This will help the lawyer assess your situation and prepare appropriate estate planning documents. Make sure to mention if you own any property in another country or state, and mention if you jointly own any of your assets.

  1. What Are Your Estate Planning Goals?

In addition to listing out your assets, think about your goals. Why do you want to make an estate plan? Are there particular relatives or friends to whom you want to leave inheritances? Are you concerned about future medical problems? Do you want to protect your children? Identifying some basic goals in making an estate plan can help your lawyer address them in the legal documents. Your lawyer may have suggestions about different ways to accomplish the goals.

  1. Finding an Estate Planning Lawyer

Now that you have a better idea of your assets and your goals, it is time to find an estate planning lawyer. Having a lawyer gives you peace of mind that your plan meets legal formalities and can be enforced after you pass away. Moreover, a lawyer can advise you on the best ways to accomplish your goals considering the assets you own. Your lawyer should spend time with you discussing your goals and why you need particular estate planning documents. Look for an estate planning lawyer in your local area that you can trust.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

When Should You Update Your Estate Plan?

If you already have an estate plan, you may not realize that you need to update it regularly. But how often do you need to update the plan, and how will you know that it needs some changes? We recommend that you revisit your estate plan just before or just after any major life changes, or at least every few years.

Major Life Changes Often Require Estate Plan Updates

The most frequent reason you will need to update your estate plan is because of major life changes. Lawyers customize wills, trusts, and other estate planning documents to fit each client’s individual circumstances. When those circumstances change, the plan may no longer match the client’s wishes.

Major life changes that may trigger the need for an estate plan update could include:

  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Death of a relative
  • Major financial problems
  • Receiving an inheritance
  • Moving
  • Buying a house or other property
  • Changing jobs

Everyone’s circumstances are different, and you may experience other changes that lead you to change your plan. For example, some people decide to edit their wills after major disagreements with relatives or losing touch with family.

Other Reasons to Update Your Estate Plan

In addition, you may need to update your plan (but not know it!) if the laws change in your state or nationwide. In particular, many changes to the federal tax laws went into effect at the beginning of 2018. The new estate tax provisions could affect your plan.

Another reason to change your plan could arise over time. As you increase retirement savings or begin thinking about your legacy to your relatives, you may want to set up more estate planning. You could start a family trust, decide to open a foundation, or want to sign a medical directive. Updating your estate plan every few years will keep your planning in line with your goals.

Want to update your estate plan today? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

Modifying A Written Contract Orally: What Most Won’t Anticipate in Their Breach of Contract

Our Crystal Lake breach of contract lawyers recognize that the legal qualities inherent to contractual agreements can appear to be contradictory or confusing, so we’re dedicated to analyzing all breach of contract cases individually to provide our clients with the highest standard of counsel.

A breach of contract lawsuit generally comes about when one party neglects or fails to uphold a contractual duty. The court is going to examine the majority of arguments for a case between each side regarding the established boundaries of the written agreement. The verdict will be reached through reinforcing the contract’s requirements. One significant rule many clients and lawyers will not be aware of is how oral modifications can override the guidelines on a written contract, even if the agreement includes a “no oral modification” statement.

During Tadros v. Kuzmak (1995), Ms. Tardos was sent to court for a non-payment of $105,777 with a commercial real estate property through Joseph Walinchus, Walter Kuzmak and the Bank of Evergreen Park. The court determined that the merchants’ oral modification breach of contract regarding tax escrow dismissed Tardos of any duty to fulfill monthly tax installments and permitted the forfeiture of the estate.

Simply, since the sellers didn’t uphold part of the oral amendment, Ms. Tardos could leave the contract and bypass the non-payment fees. That means the presence of a “no oral modification” holds no legal weight and may be misleading instead of protective. The importance of this legal item rests in the way strict understandings of the actions of each party within the legal contractual boundaries can be short-sighted sometimes.

The legal mechanics and the oral amendments of agreements are suitable as the veritable interpretation of the contract. In Caulfield v. Packer Engineering (2015), similar precepts were applied to an employment contract agreement as the court described that, “the requirements of written contracts can be altered by a succeeding oral agreement even if the agreement precludes oral modifications.”

Contact Our Cary Breach of Contract Attorneys

Our Fox River Grove breach of contract lawyers have decades of experience combined in managing a multitude of different business litigation and dispute cases in the Greater Chicago Area. To speak with one of our attorneys today, please reach us online or give us ring at (815) 242-9153.

***This is not intended to be legal advice and you should consult with an attorney.