Link to printable forms for Power of Attorney & Guardianship (residents of Illinois, only).

By J. Erbes, SIUC Legal Clinic to Older Persons.

Are you concerned about the future? Many of the questions we receive at the SIUC Legal Clinic from seniors address concerns they have about what will happen to their property at their death. The possibility of probate and its cost are a special concern, as well as what role a Will and probate plays in passing on property.

First, I would like to dispel the idea that probate is necessarily a bad thing. In many instances, probate is a beneficial process, such as to convey title to real estate or to cut off the claims that creditors could have against an estate. Also, the legislature has passed laws which, in certain circumstances, make probate unnecessary, or much more streamlined.

Even if probate is necessary, the probate of a simple estate should not take a long time or cost a great deal of money. Although avoiding probate may not be possible or appropriate, there are actions one can take to limit the need for or to reduce the cost of probate.

An important first step in any estate plan is to limit the amount of property that "passes through the estate". The simplest way to do this, particularly between spouses, is to place property in joint tenancy. Real estate, vehicles and financial accounts can all be placed in joint tenancy.

A husband and wife can also place their marital home in a special type of joint ownership called tenancy by the entirety. These types of joint ownership create an automatic right of survivorship, which results in the property passing to the survivor without probate or any additional legal transfer or conveyance. The same process occurs if a person has a named beneficiary listed on life insurance, retirement or investment accounts and the beneficiary survives them.

Not all property can be placed in joint tenancy, and in some instances it may be best not to add a joint owner to property. We urge people to use caution in naming a non-spouse as a joint tenant. When you make someone a joint tenant, you are making a gift to that person and they have access to the property immediately. Their creditors or spouses could also claim an interest in the property. A joint tenancy for vehicles or financial accounts can be created without legal assistance, but to convey real estate into joint tenancy it is important to have a lawyer in order to assure that it is done correctly.

The execution of a Last Will and Testament is an equally important step. A Will allows you to choose who you want to have ownership of your property or assets at your death. Many people are concerned that the State will receive their property at death if they do not have a Will. Although this is highly unlikely, it is still a good idea to have a Will. This is particularly true if you want someone other than your legal descendants to share in your estate or if you want descendants to inherit property in other than equal shares. It also allows you to nominate an executor, the person you want to be responsible for the distribution of your estate according to your Will.

The thoughtful use of joint tenancy and a properly drafted Will can go a long way to avoid or limit the cost of probate. Unfortunately, probate can be both necessary and costly if your heirs quarrel over the distribution of your property. This is not something that you can foresee and certainly not something you can control from the grave. As I tell clients, they can only do so much to make their estate process go smoothly. If heirs fight over the estate, all they are doing is depleting the estate assets or their own assets to pay for attorney fees.

An executed Last Will and Testament does not take effect until your death. Until that time it can be revoked and changed. You are also free to dispose of any of your property in any manner while you are alive, even if you have willed the property to someone else. A Will is like a snapshot taken of your property at your death – and it only identifies the property owned by you individually at your death.

A Will should not be mistaken for a Living Will or Power of Attorney.

Just as important, if not more important than planning for your death, is planning for the rest of your life. The use of what the law refers to as advance directives – Living Wills, and Durable Powers of Attorney for Health Care and Property – are key ingredients in this life planning.

These legal documents are called advance directives because they contain your statements of direction to some other person and they are made in advance of the need for their use. They are intended to be used at a time when you are unable to make your own decisions or handle your own affairs due to mental or physical incapacity.

Several types of advance directives apply to health and personal care.

A Living Will, also called a Declaration, is a legal document which advises your physician that you do not want medical procedures employed to delay death if you are in a terminally ill condition.

A Mental Health Treatment Declaration is a new advance directive recognized in Illinois that allows a person to designate someone to consent to or refuse mental health treatment, such as electroconvulsive treatment, psychotropic medication or a short-term admission to a mental health facility. Those who have had mental health treatment in the past, or who are concerned about how such treatment would be handled in the future might want to consider this advance directive.

A Durable Power of Attorney for Health Care enables you to designate someone called your “attorney-in-fact” or “agent,” to make health care and personal care decisions. This includes the power to make decisions regarding life sustaining treatment. It is greater in scope than a Living Will and authorizes a person to speak for you in the event of your incapacity. A wide range of decision making authority can be delegated to the agent including consenting to medical procedures, admission and discharge from health care facilities and arranging for hospice care. People should not be confused by the phrase “attorney-in-fact.” The person you name as agent should be a trusted friend or relative, not your lawyer.

Recent amendments to the Health Care Surrogate Act, permitting the appointment of a surrogate to make medical treatment decisions, have heightened the need for a senior to make an informed decision concerning future medical treatment. By signing a Health Care Power of Attorney, a person can nominate who they want to be their decision-maker, rather than leaving it to chance. Properly executed advance directives can also prevent the need for guardianship proceedings in the event legal capacity is lost.

Another advance directive, called a Durable Power of Attorney for Property, gives the person you designate as your agent access to your financial accounts and authority over your property and certain legal transactions. This access is to be used only for your benefit. It is more restrictive than naming another person as a joint tenant, since a joint tenant becomes a co-owner of your property.

However, when someone has access to your assets, there is a possibility of financial exploitation by that person, so it is critical that you appoint someone you trust to be your agent. In some situations, you may want to limit the authority of the agent. We handled one matter where the client only wanted someone to have access to their checkbook to write checks to pay bills. A direct deposit was established so the agent did not need authority to make deposits, and the agent was given no other authority over the property.

Powers of Attorney can be customized in many ways. As indicated above, the authority given to an agent can be limited. One can designate when it becomes effective and how it terminates. You can name a primary agent and also list successor agents. It is important to consider naming successors so that the power of attorney does not lapse. Your agent does not have authority to name successor agents – only you can do that.

If you truly desire to have more control over your life – even in the event of incapacity – it is important to thoughtfully consider executing advance directives. It should be remembered that advance directives are legal documents. Although they do not have to be prepared by a lawyer, it is wise to consult a lawyer to make sure you understand what you are signing and to ensure that the documents are prepared to carry out your wishes.

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