This article was published in the Southland Voice earlier this Month

                “I need to do a will” is one of the most common call ins I get into my office. It’s a sentiment I rarely disagree with. I’ve written before that I believe everyone should have a will for a variety of reasons. Often times, however the reasons I think someone should have a will are very different from the reasons they think they should have a will and my ideas for their estate plan are very different. Most people realize that a last will and testament directs what’s to be done with one’s “estate”, one’s possessions after they pass away. The estate, however, is somewhat more than just a collection of items that one had when they pass away, and truth be told, many items one had may not ever be part of the estate. To explain, the estate is a legal entity that comes into being when one passes away. The estate can administer property, sue on behalf of the decedent, be sued on behalf of creditors for actions undertaken by the decedent, and stand in for the decedent for some limited proceedings.

                The will controls how assets owned by the estate are to be distributed but many items are never considered part of the estate. For example, accounts with beneficiary designations, such as pensions, life insurance, 401(k)s, and IRAs are set up to be transferred upon the death of the account holder and are never considered part of the estate. Property held in trust is also not considered part of the estate because the decedent didn’t actually own it. Finally, proper estate planning can give beneficiary designations to certain stocks, cash accounts, and even residential housing if you consult with an estate planning attorney. The goal for most estate planning is to keep the value of one’s estate under $100,000.00 because that is the statutory limit for when an estate must go through the court probate process which is both time consuming and expensive (but if you think an estate must be probated it’s wise to consult with an attorney). Real property not effectively planned for, such as a house, must go through probate as well even if the value is under $100,000.00 (there are some ways to avoid this though, given certain circumstances). The goal of estate planning is to take inventory of not just what one has, but also what would be considered part of the estate, and plan for the distribution of those items in the most efficient manner possible.

                The other issue regarding an estate is who speaks for it. Most wills will appoint a trusted family member (or bank/attorney) to be the executor of the estate, but that alone doesn’t give someone full control of the property with no accountability. The executor has a duty to all heirs and people named in the will to make sure they get their inheritance. Therefore an executor has to give a bond to the probate court as collateral to make sure they don’t steal from the estate. A will can waive the cash portion of this bond, referred to as a surety, but the executor must still give their oath and can be liable if assets are stolen, squandered, or otherwise misappropriated. This oath must be followed even if the estate doesn’t end up in probate so an executor is always accountable.

                This is an extremely basic overview of the process but it can frequently become more complicated, particularly if the will gets contested. There is a lot of misinformation regarding this area of law so consulting with an attorney is critical. My office serves the Chicagoland area and I’m always happy to discuss your problems. Lythberg Law can be reached at 815-239-0200 or by email at cameron@lythberglaw.com. Consultations are free. Thank you.

            Unbeknownst to the general public, there’s been a long ongoing rivalry between the transactional attorney bar (your corporate, real estate, estate planning attorneys) and your litigation attorney bar. (criminal, divorce, civil, and personal injury attorneys). While this rivalry tends to be friendly at best and passive aggressive at worst, both sides of the bar all too often don’t see the value in the other side. I find that the general public sides with the litigation bar and all too often doesn’t see the value of the transactional attorney. My answer of course, is that both sides more than earn their fee (as an attorney how could I say anything else), but as the transactional attorneys appear to be targeted most often I’d like to make the case for them here. I should mention that as someone who has both a substantial transactional and litigation practice I personally have no dog in this fight, but I believe that this is particularly important.

            All too often I see people use LegalZoom or another online legal document generator to get the legal language, or “legalese” , they feel is needed to complete a real estate transaction, to form a business, or draft an estate plan. It seems simple enough. With the magic legal words at your disposal, why would you need an attorney? I find this question represents a commonly held misconception as to what it is attorneys actually do. While attorneys often do have the “legalese” you need, it’s only a small part of where attorneys provide value. Rather it’s our judgment, our diligence, and our experience that provides a value to someone. What if I told you I’ve once tried a case where two business partners drafted their own company formation documents and put that it could only be dissolved by “the majority of the partners.” Standard legal language sure, but see the problem? Each one represented 50% of the partnership and never constituted a majority and, absent agreement among both partners, they could never dissolve their partnership (and in this matter they couldn’t agree on anything). As another example, someone who tries to draft their own real estate contract and says they’ll extend the closing date “upon buyer’s request” forgetting the key second phrase “and seller’s agreement to said request” might be stuck keeping their property off the market and under contract forever for a buyer that seems unable to get the funds needed to ever close. By far the worst mistakes I see our people who try to draft their own estate plans. These are almost always destined to go to probate court when it could have been avoided. All of these examples are people that had the proper “legalese” in their documents, but in all these examples it didn’t help them and in many cases it hurt them instead.

            These sloppy mistakes almost always wind up in court and for most people that means a headache and a large hit to their wallet. Many attorneys would charge relatively little for all of the services I listed above, but to litigate them after an issue occurs? The sky is the limit as to how much it could charge to clear it up, and it could take years. It’s for that reason that I feel that the best value for money spent is transactional attorneys. The upfront cost for something that could only “potentially” go wrong seems hard to swallow, but most of my litigation clients are in the position where they’d give quite a bit to go back and pay for an attorney before the problems started happening. The old saying is an ounce of prevention is worth a pound of cure, and I believe this applies to transactional work more closely than most other things. As I said at the jump I have a transactional and a litigation practice and I’m more than happy to answer questions should one have them. Feel free to email me at cameron@lythberglaw.com should you have anything to discuss.

*The following article was written for the Southland Voice: To know more visit 
https://www.facebook.com/southland.voice/

It can be over a law suit about money, divorce, a probate proceeding, or any number of things, but many of people have received the dreaded summons from court. Either the sheriff or a private investigator showed up to your home, place of work, or a place you’re known to frequent with that magic piece of paper that looks official and says “YOU ARE HEREBY SUMMONED AND REQUIRED TO APPEAR before this Court ….IF YOU FAIL TO APPEAR A DEFAULT JUDGMENT MAY BE ENTERED AGAINST YOU.” Needless to say, it can be incredibly stressful, so I’ve taken the liberty of writing out a few do’s and don’ts regarding receiving a court summons.

            DO NOT: Just ignore it.

            Far too many people seem to take the stance that if they just ignore something that means it’s not happening. This is always the wrong step to take. The court summons serves two purposes, one actual and one legal. The actual reason behind the summons is to apprise you that there is a lawsuit pending against you and you have the right to contest it should you want. The second reason is to establish the court’s jurisdiction over you. A judge cannot make a ruling on your case until you have been served properly, once that happens you are deemed to know what is going on and your failure to contest the matters is taken by the court to mean you don’t have a defense. In those instances a default judgment may be entered against you and that judgment can be enforced like a normal one after enough time has passed, so be careful.

            DO: Look at how you were summoned, and respond accordingly.

            Somewhat counterintuitive given the last paragraph, but sometimes it makes sense not to show up to court. As I said, the summons is key to establishing a court’s ability to rule on your case, so a faulty service (one that doesn’t conform to the law) is void and any judgment rendered by that court is also voidable. I’ve had judgments voided for: the plaintiff themselves or a process servicer handing someone a summons on a defendant living in Cook County (In Cook County it must be through the county sheriff unless a court says otherwise; someone writing their own summons or using an old summons form (the summons language is codified in law and if it doesn’t conform word for word it’s not a proper summons; and leaving the summons at someone’s house with a person not authorized to receive it (under 13 years of age). In all of those cases it made far more sense for the individual to not show up to court and to attack the court’s jurisdiction instead. If you show up to court, even if the summons is faulty, you may inadvertently submit to the court’s jurisdiction and not be able to contest the summons afterwards.

            DO: Consult with an attorney.

            Even if you don’t hire an attorney to represent you in your court case (although I highly advise you do) you should at least talk to an attorney if you feel a summons may be faulty, the law is very particular on how to contest jurisdiction in court without submitting to the court’s jurisdiction inadvertently and, honestly, even some lawyers need a refresher on it now and then. I’ve presented on this very topic to local bar associations in the past and I’m happy to answer questions should you have them. Feel free to give me a call at 815-239-0200 or email me at cameron@lythberglaw.com.

*The following article was written for the Southland Voice: To know more visit
https://www.facebook.com/southland.voice/

For most people a real estate transaction is one of the biggest purchases or sales they’ll ever make in their life. It seems simple enough at the outset, so it’s little surprise that many people try to handle it without an attorney, or with an attorney who doesn’t ordinarily practice real estate and I’ve been in the position of having to fix some of these matters prior to closing or, even worse, having to litigate them in court after closing. Almost every time I see one of these matters a good attorney could have prevented it. I’ve listed below three good reasons why a buyer or seller should have a good real estate attorney:

1. A good real estate attorney can make necessary changes to your real estate contract.

            Most real estate contracts have a built in modification window where an attorney can look at the contract and modify it if there are certain provisions that place you in needless risk or are unduly burdensome to you. For purchasers, an attorney also has the opportunity to request the seller make repairs to the property prior to you closing on the house so that you know you’re getting the best house you can prior to moving in. For sellers an attorney can help you negotiate these inspection requests.

2.) A good attorney can help you avoid buying a problematic house or taking on liability for selling a faulty house.

            While the real estate closing is normally an exciting time for a homebuyer, sometimes an inspection can show that the house isn’t in the shape you thought it was. An attorney can help you get much needed warranties or clarification on issues regarding the defects so that you can close on the house with some reassurances and peace of mind. In the event that you no longer want the house, an attorney can help find ways for you get out of the contract without forfeiting your earnest money. For the seller, an attorney can help them avoid liability after the closing. Most sellers have to fill out multiple disclosures required by law when they sell the house and, if something goes wrong with the house after closing, the buyer’s typical response is to sue the seller based off what the seller said in those disclosures. A good attorney can make sure that the seller knows what they’re disclosing and promising to buyer so they don’t leave themselves liable to problems later on.

3.) A good attorney can help navigate you through the multiple steps needed to close on a house.

            If you’re a buyer an attorney can help you coordinate with your lender, home inspector, and the seller’s title company. If you’re a seller an attorney can help you with procuring a commitment for title insurance (necessary for almost any transaction), procure a property survey, and any extras spelled out in your real estate contract like termite inspections or well and septic tests.

Conclusion:

In todays fast moving world there is often a hurry on important transactions like buying and selling a house and moving on to the next chapter of your life. A good real estate attorney knows your rights under the law and how to move on protected. My office has handled countless real estate transactions and I’m always happy to answer questions should people have them. Feel free to email me at cameron@lythberglaw.com.

One’s spouse is often the biggest factor in setting up one’s estate plan. Generally, most of these decisions are seen as “team” decisions by the family and, by and large, that can be a good thing. It’s not at all uncommon for someone to name their spouse as their primary beneficiary, the executor of their estate, the trustee of their trust, and so on. Often your spouse is your partner, your best friend, and the person you trust most to handle these issues. Unfortunately, not all marriages end happily ever after and while the divorce process is trying on its own, it also creates some estate planning consequences that everyone should be aware of.

–During the Divorce is Treated the Same as if You are Happily Married

            For better or for worse isn’t just a marriage vow, Illinois’s trust and estates law feels very similarly about the importance of a marriage. The law often gives no consideration to your relationship with your spouse until after the ink is dry on your divorce certificate. Many people draft their estate plans when their marriage is strong but as time goes on the marriage becomes strained and they may not trust their spouse as much as they once did. As long as you’re married your spouse has all of the power over your will, trust, or powers of attorney that they had during happier days. It’s imperative that if you no longer trust your spouse you get your estate planning documents updated to reflect this immediately. It’s also worth noting that spouses are entitled to take an elective share of your estate regardless of whether your will is drafted to include them or not. If your spouse is disinherited from your will they have the option to renounce the will and take one-half of your estate (or one-third if you have children) pursuant to Illinois law. They also still have the power to act as trustee if they were trustee of your private trust. Perhaps more frightening, your spouse can remain your agent under a power of attorney for property or health care should something happen to you while estranged or during the actual divorce proceeding.

-Trust Property can be Marital Property

            With regards to trust drafting, the devil is in the details, a good estate planning lawyer will discuss with his or her clients the benefits and potential consequences of most trusts. If you are the creator of a revocable trust and your spouse is the beneficiary only, they often cannot receive the trust property as a beneficiary does not own the assets in a revocable trust, and there is little issue. However, as with the rest of their estate plans, most married couples like to do a “marital trust” where they are each the trust creators, co-trustees, and two beneficiaries of the marital trust, each depositing items in to the trust or retitling their assets in the name of the trust to keep their estate plan effective and up to date. While this is a common practice, one should be aware that this can transmute property in to marital property as it’s defined by the Illinois Marriage and Dissolution of Marriage Act. For example, if property titled in your name only from before the marriage is deeded into the trust created by both you and your spouse, it could be considered marital property during the divorce. If you fear that a separation is imminent you should draft a separate trust to keep your estate plan intact and avoid further comingling of assets. When the divorce is finalized, Illinois law states that any appointments or provisions pertaining to your spouse will be revoked as if he/she had died. This provision of the law only applies if the trust allows for you to revoke those provisions so making sure a qualified estate planning attorney drafted your trust is key.

–Even If Not a Marital Trust Your Trust Income Can Affect Your Divorce

            As mentioned previously, if someone is only a beneficiary of a trust asset they don’t own the principle assets in the trust. This is true for people who receive income from a family trust or have a trust created for their benefit but that they have no control over. Illinois law considers property only yours to the extent that you can control it, so if you only receive X amount of dollars a month from your trust, that’s how much money you control from the trust each month. Your spouse likely would not be able to claim the trust property in a divorce, but can alternatively have your beneficial interest payouts redirected to pay spousal or child support if the court orders it and can potentially have support calculations include the benefits of your trust income so she gets a larger portion of the marital assets. Equitable doesn’t always mean equal when dividing marital property and your spouse could argue your trust income puts you in a better position financially.

-Benefit Plans have Separate Rules

The old saying you’re “worth more dead than alive” applies to many people today. Many assets such as life insurance policies, 401(k) plans, pensions, IRA’s and annuities have directed beneficiaries meaning that they are transferred right to the designated individual immediately upon your passing without adherence to the terms of a will or trust. Typically one either forgets to remove their spouses as beneficiaries and they still inherit even if the will/trust was revoked by the divorce, or they immediately try to remove their spouse off of those accounts. Both of these approaches are not ideal. Obviously you want to be on top of your estate planning and change the beneficiaries, but often times the law may prevent you from doing so immediately. Your spouse could have an interest in your life insurance or other accounts that the court may want to see divided or transferred, or have your spouse bought out of it. Prior to making any changes to these accounts talk to your divorce attorney and your estate planning attorney to make sure there won’t be any problems.

Our office specializes in estate planning and navigating these complex and unpleasant scenarios. Don’t wait until it’s too late so call us at 815-239-0200 or email attorney Cameron Lythberg at cameron@lythberglaw.com for a FREE consultation so you can get ahead of your estate issues.