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Should I Use a Revocable Living Trust or an Irrevocable Living Trust?
Although many people assume that a last will and testament is the only estate planning tool that they need, a will is not always the best way to accomplish all of your estate planning goals. Other estate tools such as living trusts are often overlooked due to confusion or misunderstandings about the purpose of these tools. A trust is a legally binding agreement involving an individual or entity called a trustee who holds property for the benefit of a beneficiary. A living trust is an advantageous tool for managing your assets during your lifetime and then passing those assets to beneficiaries upon your death. If you are interested in using a living trust to manage your assets, you may question whether you should use a revocable living trust or an irrevocable living trust.
Revocable Trusts
As the name implies, a revocable trust is one that is able to be revoked or canceled. If you place assets in a revocable trust, you remain in control of those assets. You are also considered to be the owner of those assets in the eyes of the Internal Revenue Service and other governmental agencies. Because the property is yours, you can choose to remove the property from the trust and use it for other purposes at any time. A revocable living trust covers you while you are alive, in the event that you are incapacitated by illness or injury, and after you pass away. One of the greatest benefits of a revocable living trust is that it avoids probate– the public legal process during which a will is validated in court. Because you remain the owner of the property placed in a revocable trust, transferring property to a revocable trust does not affect your federal income taxes or estate income.
How Are Commercial Real Estate Properties Valued?
The decision to buy or sell a commercial property is likely one of the most consequential financial decisions you will ever make. In order to get the best deal possible, proper valuation of the property is essential. An accurate appraisal of a property’s value is also used by lenders when determining how much debt the lender is willing to provide. There are several different approaches used to value commercial real estate properties.
Valuation Methods for Commercial Real Estate
Many people assume that the term “value” is synonymous with “price” or “cost.” Price and cost will certainly influence a property’s value, but they are not interchangeable terms. The value of a commercial property is typically determined by an appraiser. The three main methods for valuing a commercial property include the income approach, replacement cost approach, and market value approach. The valuation approach an appraiser will use depends on several factors including the type of property and how the property will be utilized.
What Are the Different Types of Powers of Attorney in Illinois?
In the instance that you become unable to handle your own affairs, either financially or medically, it is important that you have a power of attorney (POA) set in place. This allows you to designate who will be in charge of your affairs if you are unable to do so on your own. The person designated to handle the affairs is known as the “agent” and the person who the POA concerns is known as the “principal.” If you are intending on getting your affairs in order, it is important to work with a reputable estate planning attorney to ensure that the POA is valid and the proper terms are included.
General POA Requirements
There are a number of requirements that must be met when creating a POA in the state of Illinois. In order for the legal document to be valid, the agent must be designated by name and their powers must be outlined. POAs are unique to your circumstances so you should include, in detail, what your agent is legally responsible for. This person must be at least 18 years of age. The POA must be signed by the principal and at least one witness must be present. The principal must also acknowledge their signature, and thus their consent to the POA, in front of a notary public, or attorney.
How to Prevent a Contested Estate in Illinois
The time after a loved one’s passing is hard for all grieving family members, and it can be even more difficult when disputes arise over the decedent’s wishes or the validity of the will. As you prepare your estate plan, you should consider what you can do to prevent these disputes from happening after your death so that your family remains intact and well-provided for. The following tips will help prevent a contested estate.
Creating an Illinois Estate Plan to Minimize Disputes
Many contested estate disputes happen because family members are dissatisfied with how the terms of the will affect them, while others may be based more firmly on legal grounds. You should, of course, make sure that the terms of your estate plan reflect what you truly want, but there are also steps that you can take to help your family and beneficiaries understand your reasoning and show that you were of sound mind when making your decisions. These include:
What Are Your Options for Avoiding a Foreclosure in Illinois?
When homeowners default on their mortgage payments, sometimes the only option for lenders is to initiate foreclosure proceedings. However, this can lead to conflict between lenders and borrowers that may result in property damage, increased expenses, and challenges related to finding a new buyer. Sometimes, it is in the best interest of both lenders and borrowers to consider other options that may prevent the need for foreclosure.
Understanding Illinois Foreclosure Alternatives
When possible, lenders may consider working with homeowners to explore options that can prevent defaulting on payments or otherwise make a foreclosure unnecessary. These options include:
- Loan modifications: Depending on the type of loan, it may be possible to pursue a modification to the terms, including lower monthly payments, lower interest rates, and a longer payback period.
- Forbearance: As a temporary solution, the lender may allow the borrower to make smaller monthly payments for a period of time and then make up the difference in future monthly payments.
What You Should Know About Wills and Living Trusts
The process of estate planning can be challenging, depending on the size and complexity of your estate and what you want done with your assets upon your death. Proper estate planning requires a level of knowledge of the various tools, methods, and strategies that are often employed. For example, it is important to understand the differences between a will and a living trust and how those differences could affect your heirs. It is also a good idea to work closely with a qualified lawyer who can provide assistance in meeting your estate planning needs.
What Is a Will?
At its most basic, a will is a legal document that allows you to specify how your assets and possessions are to be distributed. A will can also name a legal guardian for any minor children. An important characteristic of a will is that it is a revocable and amendable document that you can control until your death. It can be updated, altered, or changed to accommodate changing situations, such as the death of an heir or divorce. Keep in mind, however, that there are some major limitations with a will—particularly when it comes to the amount of control you have over your estate after your death. The tax consequences for your heirs may also be significant if your estate plan consists only of a will.
What You Need to Know About Buying an REO Property in 2020
If you are trying to find a new home at a good price, you might have family and friends mentioning that you try to find a foreclosure property. In theory, this is not a bad idea. A home that is for sale because the current owner defaulted on his or her mortgage could sell for far below market value. In the wake of COVID-19, however, foreclosures have all but stopped, thanks largely to a moratorium put in place on foreclosures on federally insured mortgages. Private lenders have mostly followed suit, which means that there are probably not many foreclosure properties available. The good news is that you may have another option for finding a good value: a real estate owned home, more commonly known as an REO property.
What Is an REO Property?
When a home is foreclosed on due to default on the mortgage, the lender (or current holder of the mortgage loan) will eventually seize the home and attempt to sell it. This sale usually takes place at a public auction. In most cases, a foreclosure auction does not give participants the opportunity to see the property or inspect the home ahead of time. This means that bidders are effectively making offers on a property about which they know very little. Additionally, the highest bidder is usually required to pay cash for the property at the time of the auction. Financing is uncommon at foreclosure auctions.
What You Should Know About Probate in Illinois
When someone dies without a will, or when heirs wish to determine the validity of a will, the decedent’s estate goes through a process known as probate. Probate can be a long and daunting process, and it may even be the source of stress when there are arguments about the estate, but understanding how it works can go a long way in helping you through the process.
Executor or Estate Administrator
During the probate process, an estate executor or administrator manages both the deceased’s assets and debts. If there is a will, this person is usually already named in the will. In the absence of a will, the court will appoint an executor (generally the closest family member). Named executors can decline their duties if they are unwilling or unable to fulfill them.
Creditors and Probate
Heirs are not the only ones that come forward during probate; creditors may also file claims to pursue unpaid debts. By law, they must do so within the fixed time period allotted to them. In addition, the IRS must be paid any and all income taxes due. All debts and taxes must still be paid prior to the distribution of any remaining assets or funds of assets. In addition, an income tax return must be filed for any assets that earn income during the probate period.
What Are the Most Common Types of Commercial Construction Contracts?
A commercial real estate development project will often represent a lucrative business opportunity for all parties involved. However, significant construction may be needed before a developer can realize the full potential of a property. Whether a new building will need to be built, an existing building will need to be refurbished, or other types of construction will be needed to ensure that a property will be able to serve its purpose, these construction projects can represent a major investment of time and money. To ensure that work will be completed properly, a construction contract will be needed, and the right type of contract should be selected based on the work being done.
Four Types of Construction Contracts
When parties sign a contract, they are making a legal agreement, and they will both be required to meet their contractual obligations. A contract should fully outline the scope of the work being performed and the responsibilities of each party. It should state the price of the project and how this amount may change if unforeseen circumstances occur, and it should detail a payment schedule and the penalties for late payments. Any relevant documents, such as blueprints and specifications, should be included in a contract.
What Are the Benefits of a Special Needs Trust in Illinois?
A special needs trust is typically established by parents for a disabled child, or for disabled adults who are eligible for aid that will be lost if there are assets in their parent or guardian’s names only. It is a legal and fiduciary arrangement that allows a physically or mentally disabled person to receive income without interrupting or interfering with his or her eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, Medicare, or Medicaid. For disabled beneficiaries, this financial support can make their lives more enjoyable and fulfilling. Also known as a supplemental needs trust, this kind of trust may be a necessary part of your Illinois estate plan. An experienced estate planning attorney can help you draft this essential legal document to protect your family member.
Protecting Your Loved One
According to Illinois law, two types of supplemental needs trusts can be established: third party supplemental needs trusts and supplemental needs payback trusts. Both trusts provide the disabled beneficiary with the ability to improve his or her quality of life through services or assistive equipment that he or she would not receive with government assistance programs.
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