Author: Law Office of Andrew Szocka

Estate Planning for Joint Tenants and Tenants in Common

Different methods of owning property, such as being joint tenants or tenants in common, could affect your estate planning. You may not realize how the ownership method changes your options for passing on real estate to your heirs.

What Is a Joint Tenancy?

A joint tenancy is one method of owning real estate in Illinois that gives multiple owners equal shares in the property. The key feature of a joint tenancy is that each owner (called a joint tenant) has a right of survivorship. This means that if there are two owners and one owner dies, the second owner automatically owns the entire property outright. If there are three owners and one dies, the other two owners now hold the property.

Importantly, property owned by joint tenancy does not go through probate. A deceased joint tenant’s estate executor does not distribute the property to heirs because the other joint tenants simply take over ownership via their right of survivorship. The surviving joint tenants simply need to update the property deed.

What Are Tenants in Common?

In contrast to joint tenants, tenants in common own fractional interests in real estate. For example, John might own 25% of a property, Bob owns 25%, and Joe owns 50%. Despite their different interests, each still has the same right to use the property as the others.

In addition, tenants in common have the ability to sell, transfer, or convey their interest (or a portion of their interest) to other people. The other tenants do not have to agree or give permission for a sale. This means that tenants in common can leave their interests in the property to their heirs in a will. They also can place their interest in a trust.

Estate Planning Options Depend on Your Ownership Method

Owning a property by joint tenancy as opposed to tenants in common changes how you can estate plan. Joint tenants cannot give property to their heirs in their will or place the property in trust. Instead, the other joint tenant will receive the entire property by right of survivorship. If, however, you survive the other joint tenants, you will own the property outright and can give it away in your will.

Tenants in common have more opportunities to pass on their ownership interests to others. They can place their percentage interest in a property in trust, give it to an heir in a will, or transfer it directly to another person.

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.

Is It a Good Idea to Sign a Joint Will with Your Spouse?

When planning your estate, you may wonder if it is a good idea to sign a joint will with your spouse. You love your spouse and want to share everything with him or her – why not make your wills together? Though joint wills once were widely used and popular, the major problems they create should deter you from making one.

What Is a Joint Will?

A joint will is a creature of convenience that many people used before modern technology became available. It saved a lot of time (and handwriting or typewriting) to list a married couple’s wishes in one document instead of two. Both of the spouses would sign the will, and it would dispose of all their property.

What Are the Disadvantages of a Joint Will?

Joint wills have many disadvantages, including:

  • Both spouses must agree to any changes to the will;
  • Both spouses must execute the will if it they modify it; and
  • If the will is worded improperly, the surviving spouse may not benefit from the other spouse’s property.

Importantly, the surviving spouse cannot change the will after the other spouse dies. Once one spouse dies, both spouses are not able to agree to any modifications. This could seriously hinder the surviving spouse from carrying out his or her wishes. For example, the surviving spouse may remarry and want to leave money to his or her new spouse or stepchildren. This would be impossible with a joint will. So would disinheriting someone listed in the joint will.

Alternatives to a Joint Will

Couples today often have separate property. Many people have children from a previous relationship. Others have individual ties to charities or organizations not shared with their spouse. All this means that spouses often have different wishes incompatible with a joint will.

One option instead of a joint will is each spouse forming a trust that benefits the other spouse. You also might consider beneficiary designations on life insurance or retirement accounts leaving the payouts to each other. Of course, each spouse should make a separate will too.

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.

What Happens If One of Your Heirs Dies Before You?

If one of your heirs listed in your will happens to die before you, your estate gets distributed differently. It is a good idea – for your own peace of mind – to figure out who would receive the inheritance instead. Also, you should be aware of the effect that the language in your will could have on estate distribution.

Figuring Out Who Inherits When an Heir Dies Before the Testator

If an heir listed in your will dies before you, ideally you would change your will to take that person out. But not everyone has the chance to make that change. Sometimes, the testator does not even know that the heir died. When the will leaves a gift to a deceased person, there are a few options for what happens to the gift.

Often, the will’s language explains that the gift will go to someone else (a successor). The will may use language like “to the survivor” or “if John does not survive me, then to Jane”. It is important to be very clear about the language you use to describe who inherits if an heir predeceases you. In one recent case, family members got into a dispute over the meaning of the phrase “to share and share alike in equal shares or to the survivor or survivors of them.”

What If the Will Doesn’t Mention a Successor?

If the will is silent about who inherits a gift if the heir dies, it matters whether the gift is to a descendant or to a group of people. If the gift is to a single descendant (child, grandchild, etc.) of the testator, then the descendants of the heir who are alive at the time will receive the gift “per stirpes” (each branch of the family receives an equal share of the gift). In other words, if the deceased heir was the testator’s sister and she had one living child and two living grandchildren from another deceased child, then the child gets 50% of the gift and each grandchild gets 25%.

If the gift is to a group of people, and one of the people dies, then the rest of the group receives the portion of the gift that the deceased heir would have received. However, if the deceased heir is the testator’s descendant, then the rule described above for a single descendant applies.

Finally, if neither of the two situations described above apply, then the gift becomes part of the residue of the estate (anything left over after making specific gifts). Whoever inherits the residue will inherit the gift.

As you can see, determining who inherits if an heir predeceases the testator is extremely complicated. It is best to include language in your will specifying what happens if an heir dies.

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.

Does Divorce Invalidate Gifts to Your Ex-Spouse in Your Will?

When you get divorced, you may wonder if the divorce decree invalidates gifts to your ex-spouse made in your will. In Illinois, a divorce nullifies any language in your will that makes your ex-spouse an heir.

Effect of Divorce on Gifts

The effect of divorce on gifts varies somewhat from state to state. The type of gift matters too. In Illinois, any gifts made to an ex-spouse in a will signed before the divorce cannot be enforced. The ex-spouse will not inherit no matter what.

It does not matter how specific the will’s language is – all gifts to ex-spouses are not valid. It also does not matter when the will was made. In one legal case, the testator signed his will long before his marriage when he decided to leave his estate to his friend. Later, he married the friend, and then they got divorced. The court found that his gift to his ex-wife was not valid, regardless of the fact that he made the will before the marriage and before the divorce.

However, the rule is different for life insurance policies in Illinois. There is no Illinois law that removes your ex-spouse as beneficiary of your life insurance policies. The reasoning is that if you wanted to change the beneficiary, you could have done so. As a result, you must review your life insurance after divorce. If your ex-spouse is the beneficiary and you do not want him or her to receive the proceeds, then update your beneficiary designation.

Updating Your Will After Divorce

Because of the effect of divorce on testamentary gifts in Illinois, you must update your will after a divorce. If you do not update the will, then the probate court will simply disregard a gift to your ex-spouse and distribute the estate to your other heirs. This may have a result that you did not intend. Updating your will is the best way to have peace of mind that your wishes will be carried out.

If you still want to leave property to your ex-spouse (perhaps you are on friendly terms, or he or she needs support), then you can. First, make sure the will is dated after the date of the final divorce decree. Also, you should consult a wills and trusts lawyer to ensure that the will includes appropriate language about the gift to your ex-spouse.

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.

Undue Influence When Making a Will: What You Need to Know

When someone uses undue influence to affect the contents of a will, that will may not be valid. If you are helping a relative manage his affairs, you should know how undue influence could negatively affect his legacy. Alternatively, if you are shocked at the contents of a deceased relative’s will, you may need to figure out whether it was the product of undue influence.

What Is Undue Influence?

Unfortunately, a friend or relative looking to inherit may persuade a person making his will to change the contents. The law calls this “undue influence” when it “prevents the testator from exercising his own will in the disposition of his estate”. In other words, the friend or relative’s wishes end up in the will, rather than the testator’s wishes.

When someone is unduly influenced, he or she may have been pressured, bullied, or misled. But even kindness or affection could become undue influence if they keep the testator from putting his own wishes in the will. For example, a relative who wants to inherit more money might begin spending more time with a testator, being friendly while subtly hinting that the other relatives do not deserve inheritances.

When Does Undue Influence Happen?

To call a will into question, the undue influence must have been directly connected with the will’s signing. It also must have been operating on the testator when the will is made. In other words, the undue influence can’t have happened years earlier. And it can’t have been on a subject other than the contents of the will. (However, elder abuse laws might prohibit other kinds of influence over an older person’s actions.)

Who Can Unduly Influence a Testator?

Heirs, potential heirs, and people connected to heirs can unduly influence a testator. For example, a son could convince his mother to increase his inheritance and disinherit his siblings. Or the son’s wife could convince her mother-in-law.

Suspected undue influence may lead to a will contest in probate court. The disinherited siblings, for example, could question whether the son unduly influenced the mother’s will. If the court finds that there was undue influence after reviewing the siblings’ evidence, the will would not be valid. A prior will or the order of intestate succession would dictate how to distribute the estate.

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.