Category: Resources

Wills Vs Deeds: Which Controls?

Wills Vs Deeds: Which Controls?

When a person owns real estate they often want to make decisions about who will take ownership of said property upon their passing. A person will often reference their property in their Will and provide instructions as to who should be receiving the ownership of the real estate upon their passing. But is a Will all you need to transfer ownership and how does the Will play into the transfer of title?

What determines the current ownership of a property is who is currently vested with title in said property. This is reflected in the chain of title maintained by the local county government where the property is located. The latest deed in that chain of title is what the county uses to determine who is the owner of the property. If the last known owner is a deceased person and no one else is on the title of the property, then the property is owned by the deceased person’s estate until it is transferred to someone.

Whether a will prescribes the property to someone or not is not enough to complete the transfer of ownership. A deed must be issued and title must be given. The most common way this is done is that whoever is elected as the executor of the estate would take over management of the estate property and distribute it either based on the provisions outlined in a will or the laws of intestate succession. This is most often done by a quit claim deed where the executor, as representative of the estate, deeds the property to the person selected in the will to take ownership, or if there is no will, whoever intestate laws say should receive the estate’s property.

If the will specifically states who the property should go to, the executor is duty bound to follow those instructions. But what happens if they don’t do this? What happens if the executor goes rogue and transfers title to someone not listed in the will. Is that transfer void?

The answer to this is a complicated one. Unfortunately, depending on who the property is deeded to, it may be lost to that person. The estate would have the ability to sue the rogue executor for damages, and if it can be shown to the Court that the current owner of the property was in on some sort of scheme or colluded with the executor, title may be able to be remedied by court order. However, if the title was deeded to a random third party with no collusion being shown, it is not within the Court’s power to divest this person of their home as they have not committed any fraud or wrongdoing and the damages and remedy the Court can issue would be directed solely at the rogue executor.

This situation illustrates that a will is not all that is needed. The current deed is what the city refers to when determining who is the owner of property. The will is a guideline for the transitioning of ownership, but if it isn’t followed, the Deed is what controls.

When setting up your will and determining who to give real estate to, it is important to speak with an attorney and to select an executor that you know will follow the instructions of your will to the letter. If you are considering transferring your real estate to a loved one or someone else through your will, please consider contacting the Law Office of Andrew Szocka P.C. by calling 815-344-8430 or emailing us at info@szocka.com.  We are a longstanding McHenry County firm with extensive experience in house transfers and probate. We would be happy to speak with you on your plans and help ensure your real estate is deeded properly when the time comes.

Wills vs. Insurance Policies: Which One Controls

Wills vs. Insurance Policies: Which One Controls

When a person dies it often comes down to the Executor who is administering the estate to ensure that all assets are properly distributed. When this is done without the assistance of a will, probate is administered intestate, which means that you default to whatever state you are administering the probate in for the rules of who gets what from the estate. When the decedent had a will that was witnessed and is filed with the Courthouse the distributions are to be made pursuant to the instructions left in the will. But are those instructions all encompassing and do they control in every situation? The short answer is no.

Property that is encompassed in a will is all of the decedents personal property and real estate owned by them. This includes bank accounts, savings accounts, personal items, vehicles, real estate and other tangible items. However, this does not incorporate things that already note who the beneficiaries are. An example of something like this would be an insurance policy or a retirement account. An insurance policy, such as life insurance, is a policy and agreement that the person arranges with an insurance company. When the policy is created, the insurance company asks that the holder designate the beneficiaries of the policy. Upon the holder’s death, the insurance company will distribute the funds based on the policies’ designations.

Insurance agencies will almost never agree to distribute funds in anyway other than what their policy says. Since insurance policies are not covered in probate, the will can mention them, but it won’t matter as the policies themselves would control their own distribution.

The only way for a Will to affect the distribution of an Insurance Policy would be if the holder of the policy were allowed to name himself or his estate as the beneficiary. Some insurance companies may want a specific person or a person other than the policy holder to be the beneficiary. The rules for the beneficiary designation are based on the Insurance company internal rules so you should speak with your insurance carrier about their policies and rules for beneficiary designations.

Another possible option for a policy holder to have insurance proceeds affected by his post-death wishes would be to establish a trust and make the trust the beneficiary of the proceeds. The proceeds would be sent directly to the trust upon the death of the policy holder and then all property in the trust is distributed  and managed and managed by the trustee pursuant to the rules established in the trust documents.

When you are setting up your estate, be it with a will, a trust, and with policies which designate beneficiaries. You want to make sure that all your property is encompassed and accounted for. Many people feel this can be accomplished with a simple will, but as discussed above, it is not that simple and there may be property that is distributed in a different fashion than what is described in the will. For these reasons it is very important to speak with an estate planning attorney to review your assets and any current policies you have with you to ensure everything is accounted for and going to the correct person upon your passing.

If you have questions about your will, your trust and how they may affect your insurance policies, retirement accounts, pensions, etc.. please consider contacting the Law Office of Andrew Szocka P.C. by calling us at 815-455-8430 or emailing us at info@szocka.com  We have extensive experience in estate planning and will ensure that when the time comes to distribute your assets, there are no conflicts or confusion as to how your assets are distributed, policy or no.

Powers of Attorney: What do they do?

Powers of Attorney: What do they do?

In life, the unexpected can often occur. Each day has a way of throwing a lot at you that you may not see coming. This is why it’s important to have certain documents drafted that can help you prepare for the unexpected. Powers of Attorney (POA) are precisely those documents.

There are two main types of Power of Attorney, Power of Attorney for Healthcare and Power of Attorney for Property. Both Powers of Attorney are unique in what they allow for and it is important to fill out either or both depending on your circumstances. Despite the name, a Power of Attorney does not grant someone the status of an attorney, or give them any additional ability to operate as an attorney, what it does is allow the designated person to make decisions on your behalf if you are unable to.

The first POA to discuss is the Power of Attorney for Healthcare. This is the most important POA and is honestly something that EVERYONE should have prepared. What this document does is allow the signor to designate a person to make medical decisions on their behalf if they are unable to.

While most people obviously want to be the decision makers over their own care, that’s not always possible. Often times when someone has to be taken to the hospital, they can be arriving in varying states of consciousness. If you arrive at the hospital and are unconscious, how are you going to tell people your wishes? This is where the Power of Attorney for Healthcare comes into play. If you have a designated POA for Healthcare, the document you signed will give the designated person instructions and an expression of your wishes in regards to your medical care.

For example, if you do not wish to be kept on life support because there is no obvious path for recovery. it is important that someone is aware of that as you can’t tell doctors or anyone else your desire if you are unconscious. Having a Power of Attorney for Healthcare can also be important to ensure that you not only receive the care that you would want, but that you don’t suffer any delays in your care. If you end up in the hospital, it is rarely so simple as a loved one coming in and making decisions for your care and things getting going. Hospitals are often wary of allowing anyone other than the patient to make medical decisions due to liability and may require a POA to be signed for any healthcare decisions to move forward. This can cause delays in your care which could be avoided if a POA was already in place.

The other type of POA is the Power of Attorney for Property. This is not quite as universally needed as the Power of Attorney for Healthcare but is still quite valuable for a wide variety of individuals. The main reason to obtain a Power of Attorney for Property is to, yes, you guessed it, manage your property. Now, for individuals who have very little money or assets to their name, a Power of Attorney for Property may not be necessary. However, if you are a person who: runs a business, rents property, has stocks, owns a home, has investments, or just generally has a lot of money and assets they want taken care of, a Power of Attorney for Property is very valuable to you.

If a situation occurs like in the Power of Attorney for Healthcare, where you are rendered unconscious or unable to manage your assets, you need someone with the authority to do so. Banks will almost never release money to family members or non-account holders unless there is a document granting them permission to do so. A Power of Attorney for Property is a document they will accept. Additionally, business owners and landlords would want to designate someone who can continue to operate the business in their absence or collect rent from a tenant. The POA for Property is a document that can be recognized and acknowledged by others that you have designated your POA to be able to manage your business and that they have permission to accept payments on your behalf. As a landlord this is very useful as tenants may take advantage of the fact that its not you collecting the rent by saying “Oh who is this trying to get rent from me? You are not my landlord; I’ll wait until my landlord comes asking for payment and then I will pay them the rent”. Meanwhile the mortgage is still coming due and taxes often still need to be paid.

It is important to choose carefully both, the people you want to be your Powers of Attorney and who you have draft the document/keep record of it. In order to ensure that your voice is able to be heard by your loved ones even when you can express your wishes for your healthcare or your property management, consider contacting the Law Office of Andrew Szocka, P.C. online or by phone at (815) 455-8430

OPENING PROBATE: WHAT DOCUMENTS ARE NEEDED AND WHAT IS NEEDED ON THOSE DOCUMENTS

OPENING PROBATE: WHAT DOCUMENTS ARE NEEDED AND WHAT IS NEEDED ON THOSE DOCUMENTS

When a loved one passes away, if they don’t have a trust that distributes all of their assets and money, the heirs and family must open Probate in order to obtain the documents needed to be able to administer the estate of the deceased. In order to open Probate, you must file a set of initial documents with the court where the deceased lived for the judge to understand the extent of the estate.

Please also be aware that certain counties may require additional documentation and you should refer to your Judge’s standing orders for a complete understanding of what will be needed. However, the documents you will need generally to prepare and submit are as follows:

Petition for Letters of Office: This is the initial petition document you file where you state who is making the petition for the letters of office and how much the estate has in it. You will need to state how much is there in the estate’s personal property, how much value there is in any real estate owned by the estate, and whether there is any current rental or other income coming in from the real estate.  

Affidavit of Heirship: In this document you will list out the family and heirs of the deceased. It can differ on how in depth you must be on this document depending on your judge so its often better to be more inclusive than less inclusive. Judges often want to know if there are living or deceased parents, siblings, and/or children of the deceased person.

Oath and Bond: This document is the oath you are making as the executor to administer the estate in good faith and to the best of your ability. This document is either submitted with or without Surety. Surety, also known as a Surety Bond, is an initial deposit you make with the court so that in case the money from the estate is stolen, the court has a pool of money in which to pay out the heirs. Will’s can and often do waive the need for this initial deposit.

Notice to Heirs or Waiver of Notice: When you open probate, you must notify the various heirs of your filing 30 days prior to the court date. Alternatively, if the heirs are willing to sign waivers of notice, those can be submitted instead and then notice is not required.

Pre-Prepared Orders: At your initial court date, you will be asking the Court to issue an order declaring heirship, which is the Court declaring that the heirs are indeed who you say they are, and an order appointing representative, which is what gives you the letters of office which allow you to administer the estate. You should have these pre-prepared before the hearing to open the estate and bring courtesy copies with you.

As previously mentioned, the documents listed above are just what is generally needed, counties can impose additional requirements and restrictions for documents and it is important to review your local court’s administrative orders and your local judge’s standing orders.

If you need to open a probate estate, please consider contacting the Law Office of Andrew Szocka P.C. We are an experienced law firm who open probate estates across McHenry, Cook, Will, Lake, Kane, and numerous other Illinois Counties. Consider giving us a call at 815-455-8430 or email us at info@szocka.com.

Probate – Inventory and Final Accounting: Do I Need To Do Them?

Probate – Inventory and Final Accounting: Do I Need To Do Them?

When it falls to a family member, friend, or trusted confidant to take on the role of executor it comes with a lot of responsibility. You are accepting the duty of faithfully administering a person’s entire estate, property that they have accrued and managed throughout their entire lives. Sometimes these estates can reach into the millions of dollars and with that being the case, the court finds it very important to see that both an inventory is being kept and at the end, before a probate case can be properly closed, that a final accounting is submitted and approved by the court. But what is the difference between these two responsibilities.

The Inventory is a statutorily required duty that has been waived by judges in certain courtrooms, however it is important to prepare and submit regardless. For starters, even if the judge isn’t going to give you a hard time for not filing one, creditors or displeased heirs may. An inventory is required by statute to be submitted within 60 days after the letters of office are given to the executor 755 ILCS 5/14-1. This inventory should describe the real estate and its value along with any improvements, any personal property owned by the deceased, and the amount of money on hand in the estate. Most often, estates are closed within a year of opening but if the estate stays open longer than a year it is required that another inventory be submitted after one year. If this inventory is not filed, it can be grounds for a beneficiary of the estate to call for the removal of the executor as they are technically not performing their duties.

The final accounting is very similar to the inventory however it must only be filed once. At the end of the estate administration when the executor has distributed all the assets, paid all the creditors, and is now ready to close down the estate they must submit two documents. The final report and the final accounting. The final report is essentially just a statement by the executor that all the money has been distrusted, estate taxes, if applicable have been paid, the heirs have been paid, and the creditors are satisfied. The final accounting is a description of how the estate funds have been paid out. Usually what is recommended is for the executor to keep all of the estate money in a single bank account and then refer to those bank records in order to create the final accounting. The account should state what the real estate was sold for and what was done with this money. Whenever the executor is ready to file their final report and final accounting, they send out a notice of accounting to all heirs and executors 755 ILCS 5/24-1.

After the notice is sent out, a hearing is set on the final accounting. The hearing is an opportunity for any disputes to be heard by creditors or heirs that feel they have not received their proper payout and dispute what is stated in the final accounting. At the end of the hearing if there are no disputes brought, then the accounting becomes binding on all parties.

If you’re an executor and need assistance with administering the estate you’re in charge with or have questions regarding your accounting/inventory, consider giving the Law Offices of Andrew Szocka P.C. a call at 815-455-8430 or shoot us an email at szocka@szocka.com. We would love to assist you!

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