February - 2024

Adult & Minor Guardianship FAQs

Many jurisdictions across the country have provisions for those who want to apply to be a guardian for a minor child or an adult. Proceeding through this process can be complicated. However, with the help of an attorney, you can understand all the benefits and challenges of gaining guardianship of another individual. Here are a few adult & minor guardianship FAQs that you may want to check out. 

What Is Guardianship?

In most cases, the courts will give another person the legal right to handle finances or make decisions on their behalf. Generally, the person is too young or unable to handle their own personal affairs. These parties can include:

A child

A developmental disabled or incapacitated adult

In Illinois, these individuals are often referred to as wards. The probate court will award guardianship to manage the individual’s care and finances in these cases. 

Who Can Apply to Be a Guardian?

Any person over the age of 18 can apply to be a guardian of a minor or an adult. They must also be a legal resident of the United States and must not have a criminal background. 

Family members, friends, or even a state protection agency can petition the court to become a guardian of the child or adult. Anyone named as a guardian must have a sound mind and be approved by the courts. The process to determine guardians helps to protect the safety and welfare of the ward. 

Are There Different Types of Guardianships?

Depending on the jurisdiction, there are several types of guardianships. For example, Illinois has:

The court appoints a person guardianship to make decisions for the disabled individual or minor. 

Estate guardianship helps with the management of a person’s finances or estate. 

Permanent guardianship is a long-term commitment, and it occurs when the person is unlikely to regain any decision-making abilities in the future.  

Limited guardianship is awarded until the ward reaches an age or retains some decision-making capacity. 

What Are the Steps in the Guardianship Process?

The process to obtain guardianship does require a few steps. For example, in Illinois, you must:

File a petition in the probate court in the county where the person resides. The petition must include why guardianship is necessary and the relationship between the petitioner and the disabled person or minor child. 

After the petition is filed, the court clerk will set a date for a hearing. The petitioner must notify the disabled person and other interested parties about the hearing. 

At the hearing, the judge will review the evidence to determine whether the person is disabled and if the proposed guardian is suitable. 

If the judge determines that guardianship is necessary and the proposed guardian is suitable, the judge will issue an order appointing the guardian.

After being appointed, the guardian will take an oath to faithfully discharge their duties. The guardian may also have to post a bond to protect the disabled person’s estate if they fail to perform their duties properly.

Learn More About the Steps to Become a Guardian

Deciding to become a guardian can be a difficult decision. In this role, you will be responsible for the decisions of a child or an adult. Hopefully, these adult & minor guardianship FAQs have helped to answer a few of your questions. If you still want to learn more about this process, please contact Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

January - 2024

How to Navigate the Probate Process in Illinois

After someone dies, their assets go through a process known as probate. With that, the courts will ensure that their will is valid, along with identifying and distributing the property. Often, it can be lengthy and time-consuming. 

How can you better prepare yourself to navigate the probate process in Illinois? Here are a few tips:

How Probate Works in Illinois

Whether you are an executor, heir, or family member, you will want to know how the probate process works in Illinois. When a person dies and has property in their name, they must go through these legal proceedings. Property can include:

Bank accounts

Stocks

Real estate holdings

Keep in mind that not every asset will proceed through this process. Life insurance payouts, living trust assets, and joint tenancy properties can all skip probate. 

Navigating the Process

The probate process in Illinois involves several steps.  First, a petition needs to be filed in the county where the deceased individual had lived. Any interested parties can file the petition. However, the executor usually handles the paperwork for the person's will. 

With that, the case is opened, and the legal process proceeds. At this time, the executor must notify all the heirs and creditors of the person's death. Most of the time, this will be completed through the mail. However, some jurisdictions still require the executor to place an ad in the local newspaper. 

Now, the executor must inventory the deceased person's assets. Many times, they will have them appraised. Once everything has a value and has been inventoried, it is time to pay off any debt associated with the estate, including creditors claims and owed taxes. Some of the assets may need to be sold to clear any debts. 

With the remaining assets, the executor can start distributing them to the heirs or beneficiaries. Any estate without a designated will must abide by Illinois's intestate laws. 

Throughout the entire process, the executor must account for all the actions taken with the estate. The final step of the process involves reporting to the court the income, expenses, and distributions associated with the deceased's estate. After the court approves, the estate is closed and probate is finished. 

If you want to have the process go as hassle-free as possible. There are a few things that you can do. 

First, you want to make sure that there is a will that outlines the deceased person's wishes. Wills are an important step of the process, and without one, it can take a long time to settle the estate. 

After that, choose a responsible and reliable person as the executor. This individual will need to handle all the documentation, distribution, and final reports for the estate. You will want to choose someone who is trustworthy. 

Finally, prepare for the complications. There could always be issues, even with a well-crafted estate plan and will. For example, beneficiaries might dispute the property's value, or an unknown creditor could appear. 

Prepare for the Probate Process in Illinois

No one wants to go through probate. But sometimes, it is necessary for the courts to settle an estate and distribute assets to beneficiaries. If you would like to learn more about navigating through these steps, contact Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

Is Probate Required in Illinois?

After someone passes away, their estate may end up in probate. Generally, this process involves ensuring that the deceased individual's will is valid. The court will also identify and distribute their property to the person's heirs. Many people want to avoid these proceedings because they are lengthy and costly. Is probate required in Illinois? Here is what you need to know. 

How Probate Works in Illinois

This legal process takes place after a person passes away. The executor of the individual's estate will begin the legal proceeding. They must file the will with the probate court to start the process. After that, the executor takes the lead role in managing the distribution of the person's assets according to their will's terms. 

However, that is not the only duty of the executor. They need to pay off taxes and debts from the estate. These debts usually include credit card debt, medical bills, and federal or state taxes. If the estate does not have enough funds to resolve the debts, the executor will be responsible for selling off the deceased person’s assets.

For many individuals, they want to avoid going through the probate process. It can be complicated, time-consuming, and expensive. This process is also public, meaning there is no guarantee of privacy. Fortunately, not all estates have to proceed through probate in Illinois. 

When Is Probate Required in Illinois?

In the state of Illinois, probate is required when the deceased has personal property valued at over $100,000. This legal proceeding is necessary if they have owned real estate in their name. Remember that trusts and wills can also affect whether the estate must proceed through probate. In many cases, the assets can be distributed to the heirs or beneficiaries if there is a trust. 

However, a will may still need to go through the probate process. Certain assets, such as life insurance payouts, retirement accounts, and living trust assets, can skip the probate process. They will pass to the designated beneficiary without any additional legal proceedings.

For any deceased individual's personal property worth less than $100,000, the heirs can use a small estate affidavit to obtain that property. This affidavit can work in some situations, such as:

The estate does not have real estate.

No credit claims have been made.

The estate value is less than $100,000.

All the taxes and debts have been paid.

There are no disputes between the heirs or beneficiaries.

By using this affidavit, the estate can avoid any probate. However, there are more appropriate options in some cases. If you would like to know whether an estate must head to probate, contact an experienced attorney who handles estate planning..

Avoid Probate in Illinois

Is probate required in Illinois? In many cases, the answer is yes. But if you want to stay out of probate, there are options. Unfortunately, some estates must pass through this legal process. For others, there are ways to settle an estate without probate.

If you want to learn more about the probate process in Illinois, contact the legal team at Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

December - 2023

How to Discuss Estate Planning Over the Holidays

With the upcoming family celebrations, it may be an excellent time to discuss your plans for the next year and beyond, especially those involving your estate. Holidays are full of celebrating and spending time with loved ones. What better gift can you give than securing their future? Here are a few tips if you want to know how to discuss estate planning over the holidays. 

Choose the Appropriate Place and Moment

When should you bring up your estate plans? You want to choose a time when everyone is focused. There might be better times to discuss your assets and will than at the holiday dinner. You don't need a formal setting. Instead, select one that is calm and quiet. These plans are important. A casual talk in a cozy living room or during a holiday walk is all you need to discuss these matters. 

Bring Up the Conversation in a Thoughtful Manner

Approaching the topic of estate planning requires some sensitivity. Remember that your loved ones may not want to think about a time without you. Don't discount those feelings. These discussions are difficult but necessary. While the subject may be uncomfortable, make sure that your wishes are respected and understood. 

Highlight Your Family's Future

You will want to focus these conversations on securing the family's future. Estate plans should not be one-sided. A well-thought-out strategy will make sure that everyone's needs and wishes are taken into account. During this time, you want to make sure that everyone knows your wishes to avoid potential conflicts and uncertainties.

Don't Overwhelm Them

Estate planning covers so many aspects, such as wills, trusts, healthcare directives, and power of attorney. You may want to skip discussing all these topics at once. Taking your time will make sure that your family members are not overwhelmed. This approach allows them to focus on one area at a time.

Create a Follow-Up Plan

As you may already know, estate planning is an ongoing process. You can use these conversations during the holidays as a starting point. Whatever you do, make sure to establish a plan for follow-up discussions or actions. You may want someone to gather important documents or consult an estate planning attorney. 

End on a Positive Note

These conversations do not have to focus on the heartbreaking aspects of the future. When you recognize your family's commitment to planning for the future, you can celebrate those goals. Estate planning should never be about the worst of times. Instead, you will want to take this opportunity to secure your loved ones' future for many generations to come. 

Estate Planning Discussions Are Never Easy

Estate planning over the holidays is not a festive subject. However, with family members at your side, you can make sure your final wishes are carried out with dignity and respect. Give the gift of taking control of your family's future. 

If you want to learn more about how to discuss estate planning over the holidays, contact Bielski Chapman, LTD. Whether you have a plan in place or want to get started, our team can help put you on the right track. Schedule a consultation by calling (312) 583-9430.

The Importance of Estate Planning Over the Holidays

The holiday season is a time for fun, festivities, and family time. During the merriment, you may not think about estate planning. But bringing the family together is the ideal time to discuss these issues. You can outline your wishes and have peace of mind in the process. Here is what you need to know about the importance of estate planning over the holidays.

Reflect on Family Bonds

During this time, family time becomes a vital part of the season. While you are enjoying your loved ones' company, take time to think about your estate plan. Use this time to make beneficiary designations or determine who will be the executor of your estate. While estate plans can be a difficult topic to discuss, you need to talk to your family members about your wishes. 

Think About Tax Implications

For many individuals, they use the end of the year to review their finances. Along with that, you may want to use this time to think about how to optimize your wealth transfer. There are a few tax-efficient methods that can benefit both your heirs and your estate. You may want to establish a trust to help with tax liabilities and avoid the probate process. You can start the new year with a well-organized and tax-optimized plan by addressing these matters during the holidays.

Protect Your Loved Ones

During the holidays, you might focus on the happy gatherings. But you need to prepare for the unexpected. Estate planning is a safety net. With that, you can make sure your loved ones are taken care of in the event of your incapacity or demise. The best gift you can provide your family is providing for their future. Along with financial concerns, estate plans can help designate guardians for minor children and establish trusts that will offer financial security during challenging times.

Prevent Family Conflicts

Disputes over inheritances can strain family relationships. Often, these can cause long-lasting conflicts and costly legal battles. The last thing you want is to create disorder when it comes time to distribute assets. With a clear estate plan, you can stop the potential for disagreements between heirs. During this holiday season, make sure to create a positive legacy for generations to come.

Be Ready for Life Changes

Life is about change. You should never look at your estate plan as a set of static documents. Any plan should be reviewed on a yearly basis. The holidays offer a natural opportunity to review and update your estate plan to adjust to births, marriages, divorces, or changes in financial circumstances. An updated estate plan makes sure that your wishes adapt to the changing needs of your family. 

Learn More About the Importance of Estate Planning 

As you gather with loved ones this holiday season, think about your estate plan. You may want to consider the gift of security and peace of mind for future generations. Not only will you safeguard your legacy, but you can also contribute to your family's lasting happiness and prosperity. 

When you involve your entire family, you can make sure they understand your wishes. If you are ready to discuss your estate planning needs, contact the legal team at Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

How Do I Create a Succession Plan for a Small Business?

If you want to make sure your business is sustainable for the future, you need to have a succession plan. A succession plan outlines who will take over your business when you retire, become incapacitated, or pass away. Creating these plans can reduce any issues when it comes to transitioning leadership in a company. Here are a few steps to take to create a successful plan for your small business. 

Timeline of Succession

If you want to create a solid succession plan, you must set a clear transition timeline. You can select the date for when you plan to retire or want to turn over operations to another owner. These timelines should be done well in advance. Most planning professionals suggest that you have a process in place at least five to since years before the succession.

Choose Your Successor

Next, you will want to identify who will take over the business. This successor can be:

A family member

A business partner

A trusted employee

An outside buyer

Whoever you choose, you want someone capable and willing to take on the responsibility. Once you've identified a potential successor, this is the time to give them the proper training and mentorship to prepare them for their future role.

Set Up Your Standard Operating Procedures (SOPs)

With any plan, you need to document your business processes and procedures. You will want to cover everything from day-to-day operations to long-term strategies. When you have these procedures in place, you can help your future successor to understand all the operations for your company. 

Value Your Business

Your business needs to be appropriately valued as part of your succession planning. This assessment can help you determine the value of future owners' shares and obtain the necessary insurance for protection planning. Since business valuation is complicated, you should contact an experienced professional to complete this step. 

Communicate 

You will always want to discuss your plan with your employees, customers, and family members. Being transparent about your plan can help prevent misunderstandings. Plus, you can make sure that everyone is on the same page. However, be careful of the timing. You never want to cause unnecessary worry or disruption within your business. 

Make a Contingency Plan

Finally, your succession plan should cover unexpected events like death or illness. Consider setting up a power of attorney, creating a living will, or purchasing life insurance. With a contingency plan in place, you can make sure your business continues even in the face of adversity.

Do You Need an Attorney to Help with These Plans?

When it comes to these complicated issues, you may need to enlist the help of a skilled attorney. Many plans handle matters regarding finances and taxes. Whenever you create your plan, you want to make sure it adheres to all the laws in the state. 

Also, your plan should be reviewed every year or after any major changes to the company's structure. With that, your small business can be ready for the future. 

Get Assistance for Your Small Business Succession Plan

If you want to create a succession plan for your small business, you need to consider all your options. By taking this time, you can help secure the future success of your company. If you would like to learn more, reach out to the estate planning attorneys at Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

November - 2023

What Is the Difference Between Estate Planning and Business Succession Planning?

At first, estate planning and a business succession plan might seem the same. However, they are two different processes that help ensure a smooth transition of assets and delegation of responsibilities. These plans help with the transfer of wealth in a person's personal and professional life. If you want to know the difference between estate planning and business succession planning, here are a few points you will want to know.

Estate Planning

In the event of a person's incapacity or death, an estate plan protects the individual's assets and distributes them according to their wishes. These plans create a streamlined approach to transfer assets, minimize taxes, and designate beneficiaries.

An estate plan will include several key components, such as:

Will: This document details the distribution of the person's assets. If there are minor children, the Will also designates guardians for them.

Trusts: A trust and its trustee manage assets for an individual or entity. Whether established as a revocable or irrevocable trust, these trusts can help minimize estate taxes and avoid probate.

Power of Attorney: With this document, a designated person has the authority to make medical or financial decisions for the individual if they become incapacitated.

Healthcare Directive: This document is also known as a Living Will. It defines the person's medical treatment preferences if they cannot communicate their wishes.

Beneficiary Designations: Insurance policies and retirement accounts often require designated beneficiaries. These beneficiaries are often the same individuals named in the Will. However, it is still important to make sure the proper people are named to receive these payouts.

Business Succession Planning

With this type of plan, the focus is a little different. A business succession plan outlines the transfer of ownership and management of a business. Sometimes, ownership is passed to the next generation in a family, while other businesses may have a plan for the sale of the company. These plans make sure that the business will continue in the event of the owner's death.

Some parts of this succession planning include:

Exit Strategy: Most business succession plans will have an exit strategy for the owner. This part details what happens in the event of a person's retirement, death, or sale of the company.

Successor Identification: A business cannot operate without the proper leadership roles in place. This section names the potential successor in the family or organization who will take on those positions.

Valuation of the Business: All businesses should have their worth assessed from time to time. With that, there is a better chance of getting fair market value for the company.

Buy-Sell Agreements: These terms and conditions outline which interests can be sold or bought if the owner retires or passes away.

Tax Planning: In any situation, tax implications must be addressed. These strategies can minimize any tax liabilities regarding the sale of the business.

Do Estate and Business Succession Plans Work Together?

While estate planning and business succession plans have different purposes, they often intersect. Most of the time, business assets are a large component of an individual's estate. A smooth transition of these assets can help with the person's overall wealth management. You may want to create both plans together to avoid conflicts and make sure that your personal and business interests align in harmony.

Create an Estate and Business Succession Plan to Protect Your Interests

There is a difference between estate planning and business succession planning. However, these plans are not mutually exclusive. Instead, they are two sides of the same coin. Proper coordination between the two will help you make sure you have a comprehensive approach to wealth transfer and business continuity. Contact the Bielski Chapman, LTD team to learn more about estate or business succession planning. To schedule a free 15-minute consultation, please call our office at (312) 583-9430.

October - 2023

What Happens When a Business Owner Dies?

The death of a business owner can have far-reaching consequences, affecting the personal lives of their family and loved ones and the business's future. When a business owner dies, the remaining family members or partners must consider the company's legal, financial, and operational aspects. Learn about the steps to take once a business owner passes away.

Business Continuity

When someone passes away, it could leave plenty of questions about the business operations. With a transition plan in place, employees, partners, and shareholders know what steps to take to continue with the business. 

Many owners have a succession plan. With that, there is a strategy and designed successor to help with the seamless transition. If no plan exists, it could lead to a period of uncertainty and instability for the company. 

Fortunately, the business structure of the company also plays a major role. If the business is part of a sole proprietorship, its fate is tied to the owner's estate. On the other hand, a limited liability company (LLC) or corporation will often have a more structured process for succession. 

If the owner had other partners in the business, a buy-sell agreement is used to determine the terms of the sale to either a third party or surviving partners. Once again, these agreements help ensure a smooth ownership transition. 

Legal and Financial Implications

After an owner's death, numerous legal and financial aspects must be addressed. First, the remaining family members or partners will need to find out whether the estate will proceed through probate. If there is no estate plan, will, or trust, then the business assets may go through this legal stage. This process is often lengthy and costly.

If the assets or entire business will be sold, an outside party needs to evaluate the company's value. An impartial appraisal will make sure that it is sold or passed on to partners or heirs at a fair market value. 

During this time, the remaining partners or family members will need to address any financial issues. If there are debts or liabilities, those obligations must be transferred or settled as part of the transition process. 

Additionally, there may also be federal or state tax liabilities to consider. Before the business can move into the future, the company needs to address any loose ends. 

Why Transition Planning Matters

With a detailed transition plan, the business will continue functioning seamlessly. This plan might outline:

Identifying a new leader

Restructuring the management team

Finding a suitable buyer

In the absence of an appointed successor, the business may have to initiate a search for a new leader. This individual must possess the right skills and experience to sustain the business.

Also, maintaining open lines of communication with employees is vital. The surviving partners or family members should offer assurances regarding the business's future. Transparency and guidance during this transitional period are essential for maintaining employee morale.

Along with that, it is important to nurture relationships with customers and suppliers. Ensuring the business's continued and uninterrupted operation is important for the long-term success of the company. 

Plan for the Future for Your Business

The passing of a business owner presents a challenge for those left with the responsibility of managing the company. Regardless of the business's size, all owners should have a well-crafted succession plan and estate strategy in place. 

If you want to learn more about protecting your business and assets, reach out to the estate planning attorneys at Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

Estate Planning for Business Owners in Illinois

As a business owner, you do everything to protect your company. However, many people need to realize that estate planning should be a part of that process. 

While estate planning is not an exciting part of entrepreneurship, you need it to have a smooth transition of assets and minimize tax liabilities for beneficiaries. Here is everything you need to know about estate planning for business owners in Illinois. 

Identifying and Valuing Assets

The first step in estate planning for business owners is to take stock of your assets. You will want to make an inventory of everything, such as: 

Real estate

Intellectual property

Stock and materials

Equipment

Vehicles

Along with that, you will need to account for personal assets and liabilities. For those who co-own a business, you will want to determine the fair market value of your share. This valuation will impact how your business assets are distributed between your beneficiaries.

Set Objectives and Goals

Setting goals for your estate plan is the following step after identifying your assets. The financial requirements of your family, the welfare of your dependents, and any charity contributions you wish to make should all be taken into account. 

Make sure the objectives are both clear and attainable. Be sure to keep your goals in mind when you draft your estate plan. 

You must also create a timeline for your estate plan. A time frame will help you keep track of your plan, whether you're considering an immediate wealth transfer or long-term planning.

Don't forget about tax liabilities. Illinois imposes both federal and state estate laws. As a result, that can reduce the impact of the estate's value. 

While the federal estate tax threshold is high, Illinois has a lower tax exemption at $4 million. To determine what the beneficiaries will need to pay, you will have to assess the value of your estate. 

With that information, you can find out what strategies minimize your tax liabilities. Some business owners establish revocable trusts or donate to charitable causes to reduce these taxes.  

Key Estate Planning Tools and Strategies

Illinois business owners have several estate planning tools and strategies at their disposal. 

A Last Will and Testament specifies how your property will be transferred in the event of your passing. You can: 

Name an executor

Specify endowments to people or organizations

Decide how distribution will be handled for any remaining assets

Revocable living trusts are useful for avoiding probate, protecting assets, and administering assets in the event of incapacity. For business owners, a revocable living trust may be beneficial. A trust will make sure that your designated beneficiaries receive those business interests without a costly and lengthy court process. 

Buy-sell agreements are another important component of your estate plan, especially if you're a business owner with partners. In the case of your death or incapacity, these agreements specify the terms and conditions for selling your company interests. Again, these documents guarantee a smooth transfer for your company. 

LLCs or family limited partnerships also offer asset protection. They let you progressively transfer ownership while retaining ownership of your assets.

Finally, you do not want to forget about creating a business succession plan. Whether you plan to transfer ownership to a business partner, children, or another third party, these plans will ensure the process occurs without any problems. After your passing, your business can continue to operate without any questions about the company's ownership. 

Reach Out to Our Illinois Estate Planning Team

Estate planning for business owners in Illinois requires careful consideration on your behalf. By focusing on these plans, you can secure your legacy, minimize taxes, and ensure a smooth transition of your business and assets to your chosen beneficiaries. 

Protect your financial future and your loved ones. Reach out to the estate planning attorneys at Bielski Chapman, LTD. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

September - 2023

The Importance of a Property Title Search 

A clear property title is your golden ticket in the real estate world. It guarantees that the property you want is free from legal claims or complications. If there are issues with a title, that could cause problems with your ownership rights. 

A property title search can provide peace of mind during this time. Here is how title searches and insurance can shape your real estate transaction.

What Is a Title Search? 

A title search scours through public records to trace a property’s legal ownership history. During this process, someone will look through deeds, mortgages, court records, and other documents. Any inconsistencies could cast a shadow over the property’s title. Here are a few reasons why title searches are an important part of any real estate deal:

Discovering Ownership Issues

The main goal of a title search is to unearth any potential ownership issues. Outstanding liens, judgments, or claims against the property can all be a major problem for potential new owners. Spotting these issues before closing can protect the buyer from unexpected legal issues.

Boosting Marketability

A clear title enhances a property’s marketability. This means that it can be sold or transferred without issues. A marketable title is a win-win for both buyers and sellers. Plus, it paves the way for a seamless transaction.

Preventing Legal Disputes

A title search can bring to light disputes or legal claims tied to the property. This information allows parties to iron out these disputes before finalizing the deal. Once again, that can reduce the risk of future litigation.

Securing Financing

Usually, lenders insist on a clear title before greenlighting a mortgage. A title search helps confirm that the lender’s investment is protected. Along with that, it proves that the borrower has the legal authority to use the property as collateral.

What Are Some Common Property Title Issues?

Unfortunately, some title issues can surface during a search. They include:

Liens from unsettled debts or taxes 

Forgery involving counterfeited property deeds or documents

Missing heirs who were absent or did not know about the property

Administrative errors or inaccuracies in public records 

Disputes over property boundaries or rights of way. 

What About Title Insurance?

While a title search is a vital step in verifying a property’s title status, it isn’t infallible. Hidden issues may slip through unnoticed. For that reason, you need title insurance. This policy protects the buyer against unforeseen title disputes. 

Title insurance offers protection against those problems that might have slipped past during the title search. It acts as a safety net against financial loss. 

If a title issue is uncovered post-purchase, the title insurance policy covers the legal fees and expenses needed to resolve it.

Having title insurance gives both buyers and lenders peace of mind. There is some financial safety net even if a title issue surfaces years after purchase.

Lenders often mandate title insurance as a prerequisite for approving a mortgage. This requirement protects their investment and confirms that the borrower has a clear title.

Always Use a Property Title Search for Your Real Estate Deals

A clear title can make way for a seamless transaction. Plus, it also protects your investment. Before you take your next step in your real estate adventure, make sure that you have a property title search completed on your potential purchase. 

If you want to learn more about commercial and residential real estate transactions, reach out to the team at Bielski Chapman, LTD. We can assist clients in Illinois and New York. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

Understanding Property Ownership Structures in Real Estate Investments

Real estate investments can provide a road to financial prosperity and stability. However, the property's ownership structure may impact your control, taxation, and financial stability. Whether you wish to buy commercial or residential real estate, make sure you know which structure is the right one for you. 

Sole Ownership

The most straightforward property ownership structure is sole ownership. In this scenario, one person or entity completely controls the property. While this is a simple structure, sole ownership can have some pros and cons. 

As the lone owner, you will have complete control over all decisions. There is no need to consult with partners about the property. Along with that, when there is an increase in the property's value, you will reap the benefits. You never have to share that portion of the increase with others. 

However, there are a few drawbacks. The main one is personal liability. If property-related debts, accidents on the premises, or legal obligations exist, you and your personal assets could be at risk. 

Additionally, this ownership structure does not allow you to pool capital or resources with others. Securing financing on your own can be difficult for many large-scale commercial investments. 

Often, sole ownership is better for those looking for small residential properties or wanting full control of their real estate assets. 

Partnerships

In a partnership, the property will be owned by two or more persons or organizations. There are some advantages to this kind of structure. You can split the cost of buying and managing a property by forming a partnership. This collaboration allows you to access a wider range of resources, including capital, knowledge, expertise, and skills.

Keep in mind that partnerships can benefit from pass-through taxation. With that, all the profits and losses are passed on to individual partners. As a result, you can avoid double taxation.

There are a few cons to this structure. First, decision-making can become complex and contentious when multiple stakeholders are involved in the process. 

In this ownership structure, all the partners will share liabilities. However, that comes at a cost. For example, if one person incurs debts or has legal issues, all partners could be held responsible. 

Partnerships are popular with real estate investors who want to diversify their portfolios, benefit from combined assets, or have access to additional capital. 

Limited Liability Companies (LLCs)

LLCs combine sole ownership and partnerships. This structure offers personal liability protection and certain tax advantages.

The biggest advantage is that personal assets are shielded from the LLC's debts and legal obligations. This structure can be managed by members or designated managers. Sometimes, ownership can be divided unevenly among members.

These ownership arrangements benefit from pass-through taxation as well. That can make filing taxes simpler and prevent double taxation. The members submit gains and losses on their individual tax returns during tax season.

There are a few drawbacks, much like the other structures. First, LLCs must file annual reports and maintain records, which might result in more administrative work. There are upfront expenditures and continuing fees associated with creating and maintaining an LLC.

LLCs are a popular choice for real estate investors who value personal liability protection while retaining flexibility in management and ownership. This structure offers a middle ground between sole ownership and partnerships, allowing for shared ownership without the same level of personal risk.

Find the Right Property Ownership Structure for Your Real Estate Purchase

Whether you opt for sole ownership, partnerships, or LLCs, each property ownership structure comes with its advantages and disadvantages. If you want to learn which one works for you, consult with the team at Bielski Chapman, LTD. We can help you choose the right option for your needs. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

August - 2023

What Are Purchase and Sale Agreements in Real Estate Transactions?

With any residential or commercial real estate deal, it requires a well-structured agreement to protect the interests of all parties. One important document is the Purchase and Sale Agreement (PSA). This legally binding contract outlines the terms and conditions for transferring properties from sellers to buyers. Take a look at all the aspects of Purchase and Sale Agreements in real estate transactions.

The Role of Purchase and Sale Agreements

A Purchase and Sale Agreement outlines buyers' and sellers' rights, duties, and roles for real estate transactions. This pivotal document ensures a seamless property ownership transfer while minimizing potential disputes. Since this agreement is the cornerstone of any real estate transaction, it should contain a few key components, such as:

Property Description

The agreement should have an accurate and thorough property description, including its address and any accompanying fixtures or accessories.

Purchase Price

Along with that, the document needs to specify the prearranged purchase price of the property. Other property specifics, including money deposits, initial payments, and methods for the remaining payments, will be outlined in this section. 

Due Diligence Period

This timeline allows buyers to conduct inspections, audits, and evaluations of the property's condition, zoning, environmental factors, and other pertinent aspects. The agreement should stipulate the duration of this phase and detail the buyer's option to rescind the deal if issues surface.

Contingencies

Real estate agreements will often cover contingencies like financing conditions, which allows buyers the chance to secure financing. There may also be zoning or permitting requirements to ensure the property aligns with its intended purpose.

Closing Date and Terms

The agreement must specify the closing date and the other required prerequisites for a smooth closure. The Purchase and Sale Agreement will provide dates for resolving contingencies, submitting required documents, and meeting fund transfer deadlines.

Assurances

Generally, both parties make assurances to enter the agreement and provide accurate information. With that, these agreements can avoid any legal or environmental issues linked to the property.

Title and Ownership

The agreement should clarify how title transfer will occur. With that, there should be an explanation of any existing liens, along with a detailed process for resolving title complications.

Prorations and Adjustment

This document explains how property taxes, rent, utilities, and other expenses will be divided and adjusted between the buyer and seller.

Default and Remedies

There should be specifications about any repercussions following a default by either party and the remedies available to the non-defaulting party.

Closing Costs

Any distribution of closing costs, including legal fees, title insurance, and recording expenses, should be explicitly spelled out in the agreement.

Purchase and Sale Agreements are highly adaptable, allowing for personalization to reflect each transaction's unique requirements. As real estate deals cover various aspects, including property type, size, location, and intended use, these agreements can be customized to account for these specific considerations.

Why You Should Consider Putting Your LLC into a Trust

Many people turn to LLCs to protect their business and personal assets. From stronger asset protection to simplified estate planning, putting this business entity into a trust can offer plenty of benefits. If you want to secure your finances and businesses, here are a few reasons why you should consider putting your LLC into a trust. 

Understanding LLCs and Trusts

When owners want a business structure that offers liability protection, they often turn to a limited liability corporation. These entities help to safeguard personal assets from business liabilities. This structure is an ideal choice for mixing tax implications and managing assets. However, LLCs can add an extra layer of protection when placed into a trust. 

Benefits of Putting Your LLC into a Trust

If you are thinking about adding your LLC to a trust, here are a few benefits that you can enjoy:

Asset Protection

Placing your LLC into a trust gives you the added benefit of improved asset protection. You will have a legal separation between your personal assets and business liabilities, providing a safety net to protect your wealth from any potential legal claims against your LLC. If you have a business in a high-risk industry, this asset protection can give you some peace of mind.

Estate Planning

Creating a trust is an easier way to ensure a seamless ownership transition when you pass away. Placing an LLC into a trust eliminates the need for your heirs to navigate a possibly complicated probate process, saving time, money, and emotional stress. Additionally, a well-structured trust can reduce estate taxes, allowing your loved ones to inherit more of your wealth.

Privacy and Confidentiality

By placing your LLC in a trust, your ownership information will remain private and shielded from the public eye. Unlike LLCs, which often require public filings, trusts can provide an invaluable level of confidentiality for those who want to keep their business dealings private. This level of anonymity can shield sensitive business information and personal details against prying eyes.

Management Flexibility

Putting your LLC into a trust provides seamless management transitions. With designated successor trustees, you can guarantee that your business will continue to run smoothly, even if there are changes in ownership structure. This can be beneficial if you plan to transfer your business to the next generation or have partners who will assume management roles.

How to Put Your LLC into a Trust

If you want to establish a trust, there are a few steps that you will need to follow. All trusts have a legally binding document that outlines their terms, beneficiaries, and trustees. Along with that, the transfer will need to be carefully executed. Otherwise, it could leave you with a few tax implications. 

Placing your LLC in a trust is a complicated process, and you will want to consult a professional to find the best solution for your needs. 

Potential Issues

While there are several advantages to placing your LLC into a trust, there are also some challenges. First, you will want to comply with local regulations since state laws governing trusts and LLCs can differ. 

Additionally, transferring assets to fund the trust must be done so that the process doesn't disrupt your business's operations. 

In any case, you need to find the right balance between retaining control of your LLC and benefiting from the protection of establishing a trust. 

We Are Here to Answer Your Trust Questions

Placing your LLC in a trust can protect your business and personal assets, offering privacy and estate planning benefits. 

If you would like to learn more about moving your LLC, please schedule a consultation with Bielski Chapman, LTD. We can assist clients in New York and Illinois. To schedule a free 15-minute consultation, please contact our office at (312) 583-9430.

<strong>Long-Distance Caregiving Concerns</strong>

Being a caregiver to a senior loved one can be difficult, even when you are next door or across town. But what if you are several time zones away? Trying to provide (or monitor) care from a distance can seem almost impossible. When you are far away, it is difficult to know what to do and where to turn when your parent or loved one starts showing signs of aging and needs some type of ongoing assistance.

Minimizing Risks

Most seniors do not want to admit that they are slipping. Who would? Even if they do, most do not want to ask for help. Understandably, seniors do not want to give up control of their lives, do not want to give up their car keys and do want to manage their own money. Unfortunately, with increasing birthdays, come increasing risks.

Take driving, for example. As we age, our reflexes slow. A car accident can injure your senior loved one. It can even wipe out their life savings if the accident injures or kills another person. Many scammers also prey on seniors and devise schemes to get their money.

Take Action Now

There are things that you can do to minimize these risks to your loved ones, protect them and allow them to remain in control as long as possible. First, have “the conversation.” Sit down and talk with them about these risks. This can be the most difficult part of all.

When you have this talk, you should discuss things that can happen to take away their independence and security. Discuss the importance of putting a plan in place so everyone is on the same page. The talk should include:

Their wishes for emergency or end-of-life medical care (i.e., life support, feeding tubes, blood transfusions, organ donation, etc.);

Who they want to make these medical decisions, if they are unable to speak for themselves;

Their thoughts on long-term care, to include preferences for the location of that care and how to pay for it; and 

Their estate plan (or lack thereof), the location of relevant legal documents and the attorney who prepared them.

Any existing legal documents should be reviewed to ensure that they are current. There is no time like the present to make sure the legal plans are ship-shape. Our firm knows all too well that estate plan or life planning documents that are not reviewed since the time of execution come with complications. Do you really want unpleasant surprises later?

Are there other family members who also share a stake in the well-being of your senior loved one? If yes, then it is mission-critical that you communicate as well. All of you should be involved in the conversation and each of you should bear responsibility for some aspect of their care. Failure to communicate has led many families into unnecessary (and unpleasant) drama when expectations are not articulated and addressed upfront. Failure to communicate also can lead to expensive and timely court proceedings such as probate.

Ultimately, when the time comes to act, there must be some agreed method of accountability to ensure that everything is being done in the best interests of your senior loved one. Remember that your own children will most likely model the caregiving you give to your senior loved ones.

For more information be sure to visit the other pages of our website where you will have access to our YouTube Channel, Free Resources and a newsletter subscription!

July - 2023

Steps to Place Business Assets into a Trust

Placing business assets in a trust can offer many benefits. A trust can help with asset protection, estate planning, and managing the business after an owner’s death. However, trust law can be complicated, and it would be best to seek advice from a qualified professional. Whether you live in Illinois or New York, here are a few steps to placing business assets into a trust. 

Step 1: Seek Professional Guidance

You should seek advice from a qualified attorney or financial advisor specializing in placing business assets into a trust and estate planning before making any decisions. They can: 

Provide an assessment of your individual circumstances. 

Determine if a trust is appropriate for you.

Offer assistance throughout the process.

Step 2: Determine the Type of Trust

Different types of trusts are available, each with unique benefits and points to consider. When it comes to business assets, two popular options are revocable living trusts and irrevocable trusts.

A revocable living trust lets you maintain control over your business assets while you're still alive. You can make changes or cancel the trust if necessary. Once you pass away, the trust becomes irrevocable, and the designated beneficiaries receive the assets.

On the other hand, an irrevocable trust means you give up ownership and control of your assets once they are placed into the trust. While these trusts offer greater asset protection, tax benefits, and the potential to be exempt from estate taxes, they require careful consideration and professional guidance due to their permanent nature.

Step 3: Draft the Trust Document

When creating a trust, work closely with your attorney to ensure that all terms and conditions are clearly outlined. You might want to include the following items in the trust document:

Assets

You need to list all business assets that will be transferred to the trust, such as real estate, equipment, intellectual property, stocks, or ownership interests.

Trustee

Also, choose a trustee to manage the trust and its assets. Whether an individual, professional trustee, or trust company, you will want to consider their expertise, reliability, and ability to fulfill their duties.

Beneficiaries

One of the most critical details is determining who will benefit from the trust assets, such as yourself, family members, business partners, or charitable organizations. You must specify how and when assets will be distributed.

Asset Management

You will want to provide detailed instructions on how the business assets should be managed, operated, and invested within the trust. These guidelines can detail running the business, distributing profits, or making investment decisions.

Contingency Plans

Finally, you will want to include provisions for unforeseen circumstances, such as the trustee's or beneficiaries' incapacity or death. In these plans, you need to designate successor trustees or alternative beneficiaries to ensure the smooth continuation of the trust.

Step 4: Fund the Trust

To transfer business assets into a trust, you must legally transfer real estate ownership, business interests, intellectual property, and financial accounts. This step involves preparing, signing, and recording deeds, executing legal documents such as stock assignments or partnership transfer agreements, and updating ownership records of financial assets.

Step 5: Review and Update

You need to review your trust document regularly to ensure it reflects your goals, current circumstances, and any new laws or regulations. Be sure to update the trust as necessary, mainly if major changes in your business, personal life, or legal environment exist.

Bielski Chapman, LTD. Can Help with Your Trust

Trusts have many benefits, but consulting with a professional is necessary to ensure compliance with laws and determine the best structure for your needs. At Bielski Chapman, LTD, we have experience helping clients in New York and Illinois when they need to place business assets into a trust. Please call our office at (312) 583-9430 to schedule a complimentary 15-minute consultation.

June - 2023

Protecting SSI and Medicaid Benefits in Illinois

Receiving a windfall, such as a cash settlement or inheritance, can be a life-changing event. However, for individuals who rely on Supplemental Security Income (SSI) and Medicaid benefits, it can also be a cause for concern. Fortunately, a few options can help individuals keep their SSI and Medicaid benefits while benefiting from the extra resources. Learn what you can do to protect these benefits.

Asset Limits for SSI and Medicaid

Before delving into the options available, you will want to know the asset limits for SSI and Medicaid. All countable resources for any individuals must not exceed $2,000 for SSI eligibility for unmarried individuals.  

Recently, Illinois increased the asset limits for unmarried individuals to qualify for Medicaid from $2,000 to $17,500. These federal and state programs consider countable resources as cash, inheritances, and settlement proceeds.

Now that you understand the limits, here is how to protect your assets and remain eligible for these assistance programs. 

Do Nothing

Recipients of an unexpected windfall will have to report the assets to the Social Security Administration and Illinois’ Medicaid department if they receive resources beyond the $2,000 limit. These individuals have the option to spend their funds until they reach that threshold. 

Until then, their benefits will be suspended until their funds are reduced to the allowable limit. For example, an individual might need to pay for nursing home care privately until their assets are below the $2,000 threshold.

Send a Letter

Sending a letter to Medicaid and providing documentation may be an option if the funds are exempt from the program’s resource calculations, such as receiving a settlement from a lawsuit filed under the Nursing Home Care Act. This option allows the individual to make a case for their continued eligibility, and if Medicaid agrees, the funds can remain available for the recipient's use.

Spend Down Option

If you receive a smaller windfall, it may be best to use the spend-down option. With this option, you must spend the money within the same calendar month it was received, except for the allowable $2,000.  

For example, if you receive the windfall on January 1st, you have until January 31st to spend all but $2,000. If you don't spend the excess funds within the month, you will not qualify for Medicaid benefits for that month. 

Recipients can use the funds on various qualifying expenses, including:

Making home modifications to accommodate disabilities

Paying off mortgages, student loans, credit cards, and other existing debts

Prepaying funeral expenses  

By allocating the funds toward these necessary expenses, recipients can ensure their money is put to good use while maintaining their Medicaid eligibility. 

Pooled Trust

People younger than 65 and with a disability can deposit their funds into a pooled trust. This trust helps them remain eligible for Medicaid while still having access to their funds. They or their power of attorney/guardian can contact the managing trustee to make purchases on their behalf. 

However, if they pass away before using all the trust funds, Medicaid may require reimbursement for care provided during their lifetime. Any remaining funds will typically go to the individual's heirs.

ABLE Account

If you become disabled before age 26 (which will change to age 46 in 2026), you may benefit from an ABLE Account. This account allows you to manage your finances and still receive Medicaid benefits. You can fund the account up to $17,000 and use the assets to pay for expenses related to your disability.

Trust and Annuity

You might want to consider setting up an irrevocable trust and annuity arrangement. This option involves giving a part of the windfall to an irrevocable trust and using the rest to buy an annuity. The annuity will fund nursing home care during the "penalty period." 

Once this period ends, Medicaid will start covering the expenses. If the person dies before the annuity runs out, Medicaid is reimbursed for the care expenses, with the remaining annuity funds passed down to the person's heirs. 

Protect Your SSI and Medicaid Benefits

When faced with a windfall while receiving SSI and Medicaid benefits, exploring these options is vital to determine the best course of action. At Bielski Chapman, LTD., we can help you find the right options to protect your benefits after a windfall. Please call our office at (312) 583-9430 to schedule a complimentary 15-minute consultation.

May - 2023

Why an NJSA Might be Right for Your Estate Plan

You may think that an irrevocable trust is set in stone and its terms can never be changed.  This is not the case. 

Say Auntie Anne dies leaving the proceeds from her successful pretzel chain business in her trust to her two brothers, Barclay and Clemson, naming her nephew Dusty as her trustee. The trust provides, "my Trustee shall distribute the proceeds outright to Barclay and Clemson unless either of them is deemed a spendthrift, in which case my Trustee shall distribute that person's share to him in an income-only spendthrift trust for life, remainder to his descendants per stirpes."  The trust is silent as to what it means to be "deemed a spendthrift." Both Barclay and Clemson have children. 

The fact of the matter is that Barclay (Dusty's father) is very good with money, but spending and saving haven't always been Clemson's strong suit.  Clemson has had to declare bankruptcy in the past, and now he is on his 4th marriage, to a much younger man named Fred, and no one wants Fred to walk away with 50% of their inheritance if they get divorced.   After conferring with Clemson's children, everyone agrees that Clemson's share be held in a spendthrift trust.  The only issue is, Dusty has a feeling that Fred will persuade Clemson to sue Dusty for breach of fiduciary duty so Clemson gets the money outright. 

One option is for Dusty to head to Chancery Court to file a trust construction lawsuit, where he would ask a judge to rule that the trust be construed to include standards as to what is considered "spendthrift." 

But who has the time and money for court?  Luckily, the Illinois Trust Code provides a non-judicial solution in the Trust Code, section 760 ILCS 3/111, called a "Non-Judicial Settlement Agreement" (NJSA). 

As long as all the parties to the trust (including trustees, current and future beneficiaries, trust advisors, investment advisers, trust protectors, etc.) agree, the trust can be modified under a NJSA.  Here, Dusty can get everyone to enter into an agreement that interprets "spendthrift" to mean anyone who has a bankruptcy in their past, and Fred, who is not a beneficiary, doesn't have to be involved. 

NJSA's Are Useful Tools For Changing Loads Of Trust Provisions

Validity, interpretation, or construction of the terms of the trust

Approval of a trustee's report or accounting

Exercise or non-exercise of any power by a trustee

Grant of authority to a trustee of any necessary or desirable administrative power

Questions relating to property or an interest in property held by the trust 

Removal/appointment of a trustee, trust advisor, trust protector, or other party with authority over trust decision-making 

Determination of a trustee's or other fiduciary's compensation 

Transfer of a trust principal place of administration including changing the law governing the administration of the trust

Liability or indemnification of a trustee for an action relating to the trust 

Resolution of bona fide disputes related to trust administration investment distribution or other matters 

Modification of the terms of the trust pertaining to administration of the trust 

Termination of the trust as long as it will not interfere with a clear material purpose of the trust. 

Other Components of a NJSA 

It is important to note that, in line with laws that allow fiduciaries to rely on the opinion of counsel when carrying out their duties, with NJSAs, a trustee is allowed to obtain and rely on a licensed attorney's legal opinion that a court would approve the NJSA if it were before a judge.  The attorney must be licensed in the state governing the trust. 

Another important component of an NJSA is that if the trust contains a gift to charity, in addition the charity being party to the agreement, the Attorney General's office must be giving notice and has the right to reject the agreement. 

If you are the beneficiary or trustee of an irrevocable trust, and you are looking to modify the terms of the trust, call us for a free 15-minute consultation to determine whether an NJSA is right for your situation. 

Types of Assets Subject to Probate

Probate assets refer to any property (“asset”) owned by a decedent that must go through probatecourt to be transferred to the people who will ultimately inherit them. Probate is an expensivepublic proceeding, so if you want to maximize your estate and/or keep ownership of assetsprivate, note the common types of assets that typically go through probate in Illinois, below.

Assets Under a Last Will and Testament

A common misconception is that having a Last Will and Testament keeps a decedent’s assets outof probate. A Last Will and Testament is simply a guidebook for the court that contains adecedent’s last wishes for where they would like their assets to go. A will can make probatingassets a much smoother process but does not avoid probate.

Real Estate, Stocks, Bank Accounts

“Titled” property such as real estate must go through probate. If it is also titled to other peoplewithout being titled jointly, the proceedings in probate are lengthy and involve multiple partieswho may not agree on the outcome. This same scenario can be said for other titled property suchas RVs, stocks or bank accounts.

Assets Without a Clear Recipient/Beneficiary

Any assets without a designated beneficiary will be probated upon the passing of a decedent.These assets commonly include bank accounts, real estate, retirement accounts, life insurance, orinvestment accounts. Beneficiaries are often easily changed, but once someone has passed, nobeneficiary or recipient can be named.

Maximizing Your Estate Assets

Probate is a lengthy and expensive legal process that can be avoided with an estate plan. If any ofthe assets listed above pertain to yourself or a loved one, reach out to an estate planning attorneythat can assist you. By doing this, you can avoid probate and maximize the inheritance from yourestate.

If you have questions about probate or the estate planning process, please contact our office at[cvle_contact_manager section="phone" id="1"] for more information.

Options for Protecting Medicaid and SSI Benefits After a Windfall

If you are receiving a lump sum windfall, such as a lawsuit settlement, and you receive eitherSSI or Medicaid (or both), you will be temporarily cut off from your benefits until you re-qualify. You can avoid this cut off by contacting an attorney to take certain legal steps that willprotect your windfall and allow you to maintain your benefits.

What Types of Benefits Are Impacted by a Windfall?

It’s important to know before you contact an attorney which benefits you receive. SSI andMedicaid are generally cut off by a windfall. SSDI and Medicare are not.

SSI benefits are paid out to individuals under a certain financial threshold. For unmarriedpeople, those with less than $2,000 in “countable” assets qualify for SSI. A lawsuit settlement“counts” as an asset.

Medicaid benefits are either based on your income (household income below 133% of the federalpoverty line) or assets (“countable” assets of less than $2,000 for unmarried individuals).SSDI benefits are paid out based on employment history rather than their financial resources andtherefore are not impacted by a windfall.

Medicare benefits are generally awarded once someone has been on SSDI for 2 years, or after aperson turns 65 and are not impacted by a windfall.

Your determination letter from Social Security should explain which social security benefits youreceive, but you will have to contact the agency administering your Medicaid benefits to find outwhich type of Medicaid you receive.

Reporting Requirements

When SSI/Medicaid recipients receive a windfall, they must report the windfall to the SocialSecurity Administration within 10 days of receipt and the Illinois Department of Health andFamily Services at annual redetermination. Non-reporting recipients are subject to penalties.However, if you contact an attorney to protect your windfall and maintain your benefits, yourattorney will affirmatively report the windfall to the appropriate agency along with the legalsteps you took to preserve both your benefits and windfall.

When is a windfall Exempt from Medicaid consideration?

In Illinois, a settlement from a Nursing Home Care Act lawsuit is not considered a “countable”resource for purposes of evaluating a person for Medicaid eligibility. When a windfall isreceived in the form of a settlement from a Nursing Home Care Act case, all Medicaid benefitswill be preserved. However, SSI will still discontinue benefits.

Strategies for Maintaining SSI and Medicaid While Preserving a Windfall

Spending Down Settlement Proceeds

SSI and Medicaid allow a windfall recipient to spend the entire settlement down to $2,000 in thesame calendar month it is received and continue receiving uninterrupted benefits. It is importantto contact a lawyer to assist in this process, because a spend down is time sensitive, and certainexpenditures are not allowed, such as gifts, groceries, or certain housing costs.

Appropriate categories of expenditures include:

A pre-paid caregiver contract

A pre-paid funeral contract

Vacations or travel

Club memberships

Furnishings

Electronics

Clothing

Home modifications

Paying off debt

Vision/Dental care

Therapies

Medical equipment such as an enhanced wheelchair

A Pooled Trust

If an individual is under 65, they can contact a Pooled Trust Company to set up a sub-trust andcontinue to receive SSI and Medicaid benefits. The Pooled Trust is administered by a non-profittrustee who makes purchases for the beneficiary out of the trust funds. A trustee may never giveany of the beneficiary’s money to the beneficiary themselves; when the beneficiary wishes to usetheir money, they call the trustee to makes the purchase on the beneficiary’s behalf.This is less expensive than using an attorney to set up a Special Needs Trust. There are timelimits for setting this trust up and maintaining SSI/Medicaid eligibility, so it is important youcontact a pooled trust company as soon as you know you are receiving a windfall.

A Special Needs Trust

A special needs trust, or “SNT,” is a trust that holds a windfall, and is set up by an attorney.Someone the beneficiary knows personally acts as trustee, and makes purchases for thebeneficiary out of the trust funds. A trustee may never give any of the beneficiary’s money tothe beneficiary themselves; when the beneficiary wishes to use their money, they call the trusteeto makes the purchase on the beneficiary’s behalf.

There are time limits for setting this trust up and maintaining SSI/Medicaid eligibility, so it isimportant you contact an attorney for this option as soon as you know you are receiving awindfall.

Annuity

If an individual who receives a windfall is over 65 and in a long-term care facility, Illinois lawrequires the person to also purchase an annuity in addition to setting a trust up to cover a certainperiod of long term care expenditures.

Getting Started

To protect SSI/Medicaid benefits in the event of a windfall, it is extremely important to start onthese options with the help of a professional.

If you or someone you know has SSI/Medicaid benefits and may be affected by a windfall or hasrecently received funds from a lawsuit settlement, call our office at [cvle_contact_manager section="phone" id="1"] to schedule afree 15-minute consultation.

POA for Health vs POA for Property

When I was 15, I was in a car accident that hospitalized me for 6 weeks. Because I was a minor, the doctors treating me could legally communicate freely with my parents. Had I been 18, the doctors could not have spoken with my parents without a power of attorney in place. Our firm’s strong belief is that anyone over the age of eighteen years of age should have a power of attorney for health and property, because of unforeseen accidents like mine.

The consequence for not having a POA can be severe. If you lose competency, your loved one may be forced to open a guardianship on your behalf. Guardianship is a court action that is expensive, and often creates a situation that requires a judge’s approval for all medical, financial, and living decisions. By not signing a POA you may be transferring your important health care and financial decisions to a court and person (the judge) you probably don’t know.

A power of attorney (POA) is written document granting someone else permission to act on your behalf. If you sign a power of attorney, you are called the principal and the person you designate to act on your behalf is called the agent. Although the document itself is called a power of attorney, sometimes people also refer to the person they appoint to be their agent as “my power of attorney.”

You may have heard different phrases for powers of attorney such as “financial,” “durable,” “healthcare” or “proxy.” Ultimately, there are a number of different powers that can be granted to an agent that fall into two categories: health and property. We will discuss the main differences between a Power of Attorney for Health versus a Power of Attorney for Property and why each are important.

Power of Attorney for Health

A POA for health form allows you to nominate a person to make health care decisions if you are unable to do so, usually due to sickness or incapacity. A POA for health may authorize your agent to:

Make health care decisions;

Decide in favor or against admission into certain health care facilities;

Decide the type of medical treatment you receive;

Talk with healthcare providers about your condition; and/or,

Talk with your loved ones to help come to a decision.

You may limit the powers you grant to your agent. For example, if a certain procedure is against your moral or religious beliefs, you can mandate that your agent does not utilize that procedure. The selection of your agent should be someone you trust with ultimate decision-making authority for your treatment decisions once you are incapacitated. It is usually a family member or trusted friend.

Power of Attorney for Property

A POA for property is a form that allows the principal to nominate a person to make financial decisions on their behalf. An agent under a POA for property has powers over the grantor’s financial affairs. Unless specifically stricken on the form, a POA for property has access to:

Real estate transactions;

Financial institution transactions;

Stock and bond transactions;

Tax matters;

Business operations; and,

Other financial affairs listed on the POA form.

You may limit the powers you grant to your agent by striking them from the form. Additionally, a POA for property may exercise the powers given to them throughout your lifetime; however, you can limit this time frame if specified.

Have any more questions?If you have questions about powers of attorney or the estate planning process, please contact our office at [cvle_contact_manager section="phone" id="1"] or email [cvle_contact_manager section="address" id="5"]

What It Feels Like To Sell a Home You Love

What Software Does Our Law Firm Use?

Prior to law school I worked in consulting. My job was leveraging automation and digital tools to replicate time-consuming redundant tasks for privilege and discovery teams on a nationwide litigation effort. I used VBA, SQL and Acrobat to save $180,000 across a single team. My skills in this area have allowed me to operate a law firm where we can handle more than 1000 cases between 15 people, giving each case the individual attention and care it is due, by using digital tools and automation.

The idea is to take all the jobs we have at the firm, and convert each job from a process that a human does by hand in hours, into a digital process done by a computer in seconds.

Types of Law Firm Software We Use

Actionstep - This practice management software is the backbone of our practice. We use it for our calendar, time keeping, project/task management, document portal, document drafting. It costs $75/user monthly.

LawPay - we use this to send invoices and collect money.

Text Expander - This is a big time saver for phrases we type out frequently. For example I type the phrase "/courtesies' ' and it is automatically expanded into the body of an email to a judge attaching courtesy copies. I also use it for email lists. I can type "/probate" and it will expand into the addresses of everyone on my probate team. This is $3.50/user monthly and is really worth the money.

Docusign - Since we are also licensed real estate agents, we can get a discount on Docusign and use it to send an unlimited number of envelopes for $240/year per user.

Adobe Acrobat Pro - We also use Acrobat for e-signing. It costs $19.99/month per person, but with the Pro Plan we can do things like OCR documents which makes discovery a much easier process. I also like to make internal links on my trusts for trust administration so I can easily navigate through a lengthy trust when I'm on a phone with a client.

Microsoft 365 - We use a lot of the suite here.

Word: for drafting documents. With 365, two or more users can be in the same document making changes simultaneously, which makes collaboration easy.

Excel: for spreadsheets. Multiple users can also be in a spreadsheet, which is useful when we are on a team meeting and need to all look at the same data.

PowerPoint: we don't do a lot of presentations, so PowerPoint meets our needs adequately.

Teams: we use Teams to communicate informally. Our policy is "If I can answer in 5 seconds, ask me on Teams, otherwise, use email"

Visio: We use this to create diagrams for our estate planning clients.

OneNote: We use this for internal policies and procedures. OneNote is like a virtual file cabinet that contains many binders of information, which are further divided up into tabbed sections. It's great to organize a mass of information. It's also "live" so people can update the information regularly. We have a OneNote called "Probate Tips and Tricks" which contains "binders" of each county, and within each "binder" we have sections such as court fees, courtesy copy procedures, standing orders, etc.

SendPro - we use SendPro for mail. It works really nicely

CallPlease - we love CallPlease's messaging interface. Our administrative assistant can leave us messages there, and we can mark them as "called back" or "delegated." It is $20/user monthly.

Nextiva - we have never found a phone system we are happy with. Nextiva has nice features, such as being able to call from your laptop instead of your phone, faxing, and being able to 2-way SMS with clients. But the call quality is poor and it is not user friendly at all.

What We Love About Actionstep

Three things in life are inevitable: death, taxes, and practice management software.  Well, the third is only inevitable if you practice law… the moment you get sick of spreadsheets to keep track of your client matters is the moment you realize it's time for practice management software. 

If you've been to a law seminar or trade show, you've seen all the booths: Clio, Smokeball, Filevine, Amicus Attorney, Time Matters.  Maybe you've even gotten a stress ball from CosmoLex or a mouse pad from Rocket Matter. 

I'm here to tell you that we have evaluated them all, and because we are a volume practice that handles more than 1,200 cases simultaneously, Actionstep is the software for us.  

What our law firm loves about Actionstep

Here is what we love about Actionstep: 

The timer feature.  It helps us capture time simultaneously. 

The suggested matters feature.  It helps us capture time we may have forgotten. 

The ability to build automated forms so we can generate pleadings with the "click of a button" rather than typing information into PDFs. 

The workflow.  Tasks are automatically assigned to the right people in the firm as the case or transaction progresses. 

The e-mail integration.  When we get an email in outlook, it's easy to assign it to the respective matter in Actionstep so that all people working on the matter can see the communication in the matter, across the firm. 

The custom reports.  For 1200 court cases, we have to make sure that the court calendar is updated every day, and that there are no past or blank court dates for each matter.  Actionstep enables us to build a custom report to keep track of all of our court cases so we don't miss a court date.   

The task management.  Checklists are the backbone of our practice.  Like a pilot, everyone at our law firm is required to use a checklist in everything they do.  Actionstep keeps track of everyone's progress on their checklist and employees can use the checklists to affirmatively report on their progress and workload to management. 

The interface. It is easy to follow and learn quickly. It can also be personalized for your team depending on matter types and practice areas. 

Here are some things we don't use frequently but still appreciate: 

Text messaging.  Actionstep lets you send one-way SMS messages to clients.  The fact that they are only one-way takes away from a lot of the utility and we had to subscribe to texting through Nextiva to actually fully take advantage of texting with clients. 

Secure document portal.  For clients who send us confidential documents or documents that are too big to attach to an email, the portal has proven useful.  It is not user friendly, but it serves it purpose. 

What we wish Actionstep did better: 

Customer Service.  You have to submit a ticket for any issues you have and wait for a response which can sometimes take days.   

Phone messaging.  There is no good messaging function in Actionstep.  We wish it had the functionality of CallPlease. 

The calendar system is not great.   

Business Intelligence.  We had to outsource our data from Actionstep to Cloudify to find out things like our performance against KPIs, Effective Rate, outstanding Accounts Receivable, and breakdown of revenue by department.  My understanding is that Smokeball does this for you. 

Build forms for us.  We have had to build all our forms for document automation. Smokeball will do this for you at no extra cost.   

Referral tracking.  Actionstep does not break down revenue by referral source so it is hard to track return on marketing efforts. 

Integrating better with LawPay. 

Chatting function specific to matters, like an integrated Slack.

What is the Role of a Guardian ad Litem in a Guardianship?

In most counties in Illinois, the judge will appoint a Guardian ad Litem (frequently referred to by its abbreviation "G-A-L") before appointing a guardian of a Ward.  This is a confusing term because both "Guardian" and "Guardian ad Litem" have the word Guardian in them - but they could not be more different in their roles! 

Guardian vs Guardian ad Litem

A Guardian is a person who is appointed to make financial and healthcare decisions for a Ward (someone who the court is has determined has a disability such that they cannot capably or safely make the decisions themselves).  To become a Guardian, a person must ask, or petition, a court to be appointed. 

A Guardian ad litem, on the other hand, is someone the judge appoints without anyone asking.  The purpose of a Guardian ad litem is to observe the Ward and to summarize those observations for the judge.  The Guardian ad litem is sometimes called "the eyes and the ears of the court" because of their purpose of observation.   

The Role of a Guardian ad Litem

A Guardian ad Litem is necessary in any proceeding in which the Ward cannot be present in court, because it would cause them harm. 

If the Ward were able to come to court, the Judge would be able to observe the Ward themselves.  The Judge could evaluate what the Ward's condition is. Does the Ward's condition seem to match the diagnosis the petitioner has pled to the court?  Does the Ward seem to understand what is happening to the extent that they don't need a plenary guardian?  Is the Ward behaving in a way that leads the Judge to believe they object to the petition, or need their own lawyer? 

However, almost all of the Wards we represent in our office have disabilities which prevent them from being able to go to court, almost every case we work on has a Guardian ad Litem appointed.   

The Guardian ad Litem generally contacts the petitioner (the person asking to be guardian) about a week before the court hearing to set up an appointment to go meet with the Ward.  When the Guardian ad Litem meets with the Ward, they will read the Ward a list of rights, and they will generally ask basic questions such as what day it is, when was the Ward born, who is the Ward's family, and who is the president.  They will always ask the Ward whether they understand what a guardianship proceeding is and if they agree to have the petitioner become their guardian. 

The Guardian ad Litem will then write their observations up for the judge and present them on the court date that the judge makes a guardianship appointment. 

It is important to be forthcoming with any Guardian ad Litem appointed to your case, and to invite them to visit the Ward as much as they need to in order to write a report up for court.   

If you have questions about what a Guardian ad Litem does or if you are interested in becoming guardian for someone, contact us here or call us for a free 15-minute consultation at [cvle_contact_manager section="phone" id="1"].

Should I Put My Real Estate Into a Trust?

If you are a new homeowner, congratulations!  Maybe someone recommended to you recently that now that you own a home, it is beneficial to put your real estate in a revocable living trust and you're wondering why.  Read on! 

By putting real estate in trust, clients ensure that their home will be transferred to their beneficiaries without an executor having to go to probate court. This is what would happen if the property were not held in a trust. I have seen too many properties lost in a tax sale or foreclosure because it was not transferred into trust, and the executors didn't have the attorney fees to hire an attorney to go to probate court to sell the property. 

Creating a Revocable Trust For Real Estate

When you create a revocable living trust with our office, we will make sure to deed any real estate you own into the trust after you sign it.  With respect to managing the property, such as refinancing or selling, you will continue to sign documents the same way you did before your real estate was in trust, but you will put "Trustee" after your name.   

So if Cindy Client comes to us to create an estate plan, and she forms the Cindy Client Revocable Trust dated April 1, 2023, we will draw up a deed transferring her home "From Cindy Client to Cindy Client, Trustee of the Cindy Client Revocable Trust dated April 1, 2023."   

One advantage for married couples transferring property to their trust is that they maintain the benefits of "tenancy by the entirety."  Tenancy by the entirety is a way for married couples to own property and protect the property from either of their creditors.  When there is a judgment or lien against one spouse, if a married couple owns property as tenants by the entirety, the judgment creditor cannot force the spouse to sell the real estate to satisfy the judgment, because the innocent spouse is protected from their spouse's creditors. 

If you own real estate in your name, and you would like to work with us to transfer it into a revocable trust, contact us here or call us today at [cvle_contact_manager section="phone" id="1"].

How To Sell a House Without Probating an Estate

One issue that we come across frequently is a deed that has been sitting in a deceased parent's name for years, and finally a child is ready to sell the property, but doesn't have the authority to sell because their name is not on the deed. 

One way to go about selling the property is to go to probate court, have a judge appoint the child representative of the estate, and then the child can use their Letters of Office to sell the property to whomever they want. 

But probate court costs thousands of dollars, and very often someone is in the undesirable position of wanting to sell the property because they no longer have the funds to maintain it, let alone the thousands it would cost to open a probate estate. 

In these cases, there is a work-around, as long as all of the deceased parent's heirs agree.   

Affidavit of Heirship

The work-around is to work with an attorney to draw an "Affidavit of Heirship" up.  Along with the Affidavit of Heirship, all of the heirs on the affidavit must sign the deed selling the property to a third party.  This is why everyone must agree; without everyone's signatures, a title company will refuse to sell the property without a probate estate. 

If all the heirs do not agree, and you are forced to go to probate court, sometimes an investor will be willing to pay the probate expense for you.  Say the investor was offering you $50,000 for the property, you could ask the investor to pay you $45,000 for the property, and pay your attorney's $5,000 flat fee, up front, for the probate services. 

Connect with an Experience Probate Attorney

We are highly experienced in these types of transactions and would be happy to discuss our fees with you.  Get in touch with us here or call us today to schedule a free 15-minute consultation at [cvle_contact_manager section="phone" id="1"].

What Is Probate?

The first time I heard the word "probate" was after I had finished law school and passed the bar exam.  If you are lucky, the probate process is a foreign concept to you.  But most people come across it at some point in their lifetime, and we are here to demystify what exactly probate is. 

How Probate Works

Probate is a court proceeding, but it's not like the ones you see in the movies with a Plaintiff and a Defendant yelling "Objection!" or whipping their arm up to display evidence while the jury gasps. 

There are no plaintiffs, no defendants, and no jury.  Probate is an administrative proceeding in which lawyers prepare documents called "pleadings" or "probate forms" and submit them to a judge.   There is a single court date in which the judge reviews the pleadings and signs a court order appointing a representative to administer the Decedent's assets.  This process is called "opening the estate." 

While you don't have to go into court (that's what we do for you), you are responsible for all of the estate administration.  So what does it mean to administer an estate?  An estate is made up of assets, and an "asset" is literally anything the Decedent owned when they died.  Assets include everything from boxes of photographs to bank accounts, savings bonds, vehicles, real estate and more. 

About Estate & Probate Administration

The process of administration is as follows: 

First, the court-appointed representative must create an inventory of assets and note the value on the date of death. 

Second, the representative must create a list of all claims against the estate.  Anyone the Decedent owes money to (credit card companies, school loans, anyone who paid for final expenses) is a liability of the estate called a "Claim."  Most creditors have 6 months to notify the administrator that they are owed money, but any claimant that is known to the administrator (e.g. the IRS, final nursing home bill) must be affirmatively notified, and is automatically a beneficiary of the estate. 

Third, the representative must marshal all the property listed in the inventory.  This may mean evicting tenants, changing locks, getting a storage unit, or liquidating property and consolidating the proceeds into an estate bank account.  This is generally done in the first 6-10 months of the probate estate being opened. 

Fourth, the representative must prepare an accounting of the estate.  The accounting will list the inventory, the receipts, the claims, and any disbursements.   

Finally, the representative may distribute the remaining property to the estate heirs (or legatees if there is a will), in accordance with Illinois law. 

When administration is complete, your attorney will return to court to close the estate. 

Your probate attorney is there to help you every step of the way, giving you detailed instructions on how to carry all of these tasks out. 

If you would like more information about what is involved in the probate process, contact us here or call us for a free 15-minute consultation.  

What Are the Benefits of a Trust?

There are two types of estate planning: will-based planning and trust-based planning.  Our office only does trust-based planning. 

While a Last Will and Testament will direct your executor how to distribute your property, your executor will be required to go to probate court to collect and distribute your property, opening up your estate to the public eye and making it easy for creditors to come after your estate. 

Benefits of a Trust Over a Will 

A trust is effective during your entire life (as opposed to a will, which is only effective on death).  This means that if you are disabled or incapacitated, your trustee will be able to seamlessly manage your property, while being held accountable by the terms of the trust to follow your instructions as laid out in the trust. 

You choose who inherits your property - and you control who does not.  You can gift property to your child in trust, for example, meaning that your child inherits the property but if they get a divorce, their ex-spouse doesn't walk away with half of what you spent a lifetime building! 

A trust is extremely flexible.  A trust doesn't need to be witnessed or notarized (unlike a will) so anytime you want to change your trust, you can call us up and we can whip an amendment up and send it to you in Docusign.  It's easy to change your trust when your life changes. 

Trusts have many more uses than this, and come in many flavors.  Do you want to make sure your pets are cared for after death?  Let us create a pet trust for you.  Do you want to make sure your property isn't sold to pay for long term care costs?  Let us create a Medicaid Asset Protection Trust for you.  Do you want to provide for your grandchildren who have special needs?  Let us create an OBRA supplemental needs trust for them so they can stay on waiver programs and benefit from an inheritance too. 

Contact us here or call us today to get started on your estate plan.  Trust us, you'll have peace of mind when you're done!

Who Needs an Estate Plan?

Folks often believe that only the wealthy need a will or a trust. As a matter of fact, having an estate plan is not only about passing wealth on to future generations or avoiding taxes.  

People Who Need an Estate Plan

Estate planning has numerous benefits for all of the following groups.  

People who wish to plan for the risk of disability or untimely death. Estate planning keeps families out of court and prevents fighting over who controls your finances and health. 

People who wish to pass their property to someone specific, or to disinherit a family member. Estate planning ensures that your property goes to the people you want it to go to (say, your child) and not to unintended third parties (say, your child's divorcing spouse).  

People who receive Medicaid or SSI. If you have more than $2000, you will lose your benefits. 

People who have a family member with special needs including Down Syndrome, autism, or other disabilities. Estate planning ensures that these family members will be eligible for robust free programs while still maintaining a fund for the things that will provide them with the most comfort, dignity and independence. 

People who have children under the age of 18. Estate planning ensures that a trustee will be able to use funds to care for a minor child instead of any inheritance going through a guardianship court where it will be deposited in a savings account until the child turns 18. 

People who own real estate. Estate planning ensures your family will not have to sell your property if you become disabled, or go to probate court to sell the property after you die. 

People who have had children out of wedlock. In Illinois, only mothers are presumed to be parents of their children.  As a father, create an estate plan to ensure your child inherits from you when you die. 

People who are retired and wish to protect their money from long-term care costs. If you go into a supportive living facility or memory care, you will be required to spend all your money to live there. Put your property into a Medicaid Asset Protection Trust instead, and keep all your money for a dignity fund for your family while you are alive, and an inheritance after you die. 

People with blended families (e.g. second marriages, step-children). Use an estate plan to make sure that even if your spouse inherits your property after death, that it will ultimately go to your children and not your step-children. 

People who are not married to their long-term partner. Common law marriage is not recognized in Illinois. Use an estate plan to ensure that your partner inherits what you've spent a lifetime building together. 

If you fall into one of these categories and are wondering how an estate plan can benefit you, call us today for a free 15-minute consultation.

What Do I Do When I Lose a Trust?

What do you do when you've lost a trust? You go back to basics: the elements of a trust, and when all else fails, probate! 

A Short Story About a Client Who Lost a Trust

We had a case where a client's mother (let's call the mother Betty Smith) had deeded her home into trust in a form "Deed in Trust," but after she died, no one could find the trust.  Had she forgotten to set it up altogether, or was the trust set up but somehow lost to the world?  The fact was we had real estate that couldn't be sold because while we knew who the owner of record was - the trust - we didn't know who the trustee was, or what authority, if any, they had to sell the property. 

Because the deed was a "Deed in Trust" It had some form language in it that helped us out.  The Grantor was "Betty Smith, Trustee of the Betty Smith Revocable Trust dated February 1, 2000."  The terms of the trust in the deed were as follows: 

Full power and authority are hereby granted to said trustee to contract to sell… to convey either with or without consideration… at any time or times hereafter… and to deal with said property and every part thereof in all other ways and for such considerations as it would be lawful for any person owning the same to deal with. 

So apparently the deed created a trust and gave the trustee the authority to convey the property.  Without a trustee, we can just look to the Illinois Trust Code, which gives courts jurisdiction to appoint a trustee when the office is vacant (760 ILCS 3/704(c)). 

To be a valid trust in Illinois, a  trust requires the following elements:  "grantor or settlor and a grantee or trustee, subject matter or property, beneficiaries, and specifications of the nature and quantity of their interest and manner and time in which trust is to be performed."  Wynekoop v. Wynekoop, 407 Ill. 219, 95 N.E.2d 457 (1950) 

Our Solution 

Betty Smith's trust was one element short of a trust: there was no beneficiary.  Without a beneficiary, the entire conveyance failed. 

We solved the problem by opening a probate estate for Betty Smith and conveying the property to her heirs at law.  We worked with a title company before opening the probate to make sure any conveyance out of the estate would be insurable. 

The moral of the story is where a trust is lost, any conveyance to that trust is likely a failed conveyance, and you will have to probate the property instead. 

Call Bielski Chapman, Ltd. at (312) 583-9430 or contact us here for a free consultation today!

Medicaid Asset Protection Trusts

When my dad was diagnosed with Parkinson's, my parents were living in my childhood home in Wilmette, and they had a modest life savings.  In the course of sharing my dad's diagnosis with friends and family, one thing they kept hearing was how expensive Long Term Care would be; the cost could completely drain their life savings, and they could eventually lose their house.  

Anxiety struck; my parents didn't want to lose their house, and they were hoping that they might be able to leave something to us kids from what they had spent a life building, as an inheritance.  Of course helping our parents or taking care of them in old age wouldn't even be a question for me and my brothers, but my mom was plagued with the notion that she would be a "burden" to us one day. 

Today, both my mom and dad have peace of mind that they won't have to rely on us.  My father is in Long Term Care at the Carrington of Lincolnwood, with 100% of his care paid for, and my mother is still living in Wilmette off of their life savings. 

How did they get from anxiety to peace of mind?  With an Irrevocable Asset Protection Trust. 

Irrevocable Asset Protection Trust

The basic structure of a Medicaid Plan works like this.  Medicaid will pay for Long Term Care costs as long as the applicant has assets below a certain threshold.  If a person tries to give away money or assets, such as giving money to their children or transferring real estate to a relative, Medicaid considers that a transfer to purposely fall below the asset threshold to qualify for Medicaid.  When someone applies for Medicaid, Medicaid looks at all transfers made in the 5 years, scrutinizing every transaction to determine if any money was given away in this manner. If it finds any money was given away, Medicaid imposes a penalty period before it provides coverage, leaving the applicant to pay out of pocket for months or even years before Medicaid will kick in.  But with what money?  The applicant has already given their money away… 

However, if someone makes a transfer of their assets prior to the 5 year lookback period, Medicaid can't impose a penalty period.  This is where our Irrevocable Asset Protection Trust strategy comes into play.  By transferring assets into the Irrevocable Trust, and then waiting 5 years, Medicaid can only consider assets outside of the trust to evaluate an applicant for eligibility.  By sheltering all major assets, a person can protect their home and their life savings, while Medicaid pays their Long Term Care costs.  The money is available to the person in Long Term Care above what Medicaid provides.  I love the term for this that some people use: a "dignity fund."  If the money outlasts the person in long term care, it is preserved as an inheritance for their family. 

My parents' specific fear was that my mom would die before my dad, leaving him with assets above the threshold for Medicaid coverage, and he would be forced to liquidate everything to pay for long term care costs, leaving the children with nothing, and depleting what they had spent a lifetime building in a matter of months. 

If your parents are in the same situation as mine, or if you have a parent at risk of something like Parkinson's, Alzheimer's, or strokes, contact us here or give us a call and let us help your parents and family find peace of mind like mine did.

Listing Your Chicago Property On Airbnb

Listing your Chicago property on Airbnb may seem lucrative, but if you’re not careful, it can cost you. Homeowners who want to list their property must be careful to avoid penalties by paying attention to the restrictions in the Chicago Shared Housing Ordinance and their building’s governing documents. The restrictions are noted below, along with the legal requirements that must be met to list your property on a shared housing site.

With a few exceptions, if your building is on one of two lists, you cannot list it on a shared housing site. The first list is Chicago’s “prohibited building” restriction and the second is Chicago’s “restricted residential” zone. A current list of all prohibited buildings can be found here. A current list of all restricted residential zones can be found here.

If the building isn’t on either of the city’s restricted lists, the next step is to check with a building’s governing documents.[1] Many buildings amended their bylaws or implemented rules and regulations in the past few years that disallow shared housing on the property.

As long as a building isn’t on either of the prohibited lists, and the governing documents allow shared housing, a unit-owner is allowed to Airbnb their unit. Chicago requires all unit-owners who wish to Airbnb their unit to register[2] and if they list more than one shared housing unit, to get a license by paying a shared housing unit operator fee of $250.[3]

This post is not an exhaustive explanation of the rules and regulations regarding short-term housing and should not be relied upon as legal advice. If you want to list your property on a website like Airbnb, VRBO or HomeAway, call us so we can provide you with advice based on your particular circumstances.

[1] Municipal Code of Chicago Section 4-14-060(b)

[2] Municipal Code of Chicago Section 4-14-020

[3] Municipal Code of Chicago Section 4-5-010(38)

Estate Planning for Property Transfers to a Non-Citizen Spouse

As a general rule, spouses can transfer an unlimited amount of property to each other  without paying tax on the transfer.[1] The rule includes transfers made upon death.[2] The so-called “unlimited marital deduction” delays taxation on the transfer of property until it is transferred out of the marital unit. The rule applies to US citizens as well as US residents.[3]

For non-citizen spouses, the unlimited marital deduction does not automatically apply.[4] Congress enacted special provisions for non-citizen spouses because it wanted to prevent a non-citizen surviving spouse from taking property left to him or her upon death back to his/her country of origin and avoid paying tax when transferring the property to a third party in the future.[5]

However, with a Qualified Domestic Trust (“QDOT”) an unlimited amount may be transferred to a non-citizen spouse.[6] Transferring property to a QDOT enables a citizen or domestic trustee to withhold taxes as property exits through the QDOT trust on its way out of the marital unit.

Qualifying as a QDOT

In order to qualify as a QDOT[7]:

At least one trustee must be a citizen or domestic corporation;

The citizen/domestic corporate trustee must be able to withhold tax on transfers of principal;

The trust must comply with all regulations that ensure collection of tax on distributed principal;

The settlor’s executor must make an election pursuant to §2056A;

Trust income must be distributed to the non-citizen spouse at least annually;

Trust principal may not be distributed to anyone but the non-citizen spouse as long as the non-citizen spouse is alive.

If a decedent spouse did not create a QDOT in an estate plan for the surviving non-citizen spouse prior to death, all is not lost. A surviving spouse can transfer property to a QDOT via an irrevocable transfer prior to filing the decedent’s return.

This post is intended to be informational and is not a thorough explanation of estate planning laws or exceptions.

[1]26 USC § 2523

[2]26 USC § 2056(a)

[3] 26 USC § 2001

[4] 26 USC § 2056(d)(1), § 2523(i)(1)

[5] Hellwig, Brant J., and Robert T. Danforth. Understanding Estate and Gift Taxation, LexisNexis, 2015, p. 484

[6] 26 USC § 2056(d)(2)(A)

[7] 26 USC § 2056A

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