What is an Estate?

Good afternoon, everybody. Happy, happy Tuesday, once again. The weather is looking a lot better now in Chicago, so thank you so much for joining us. I no longer am wearing my parka outside. It’s a lot better. But thank you for joining us today. My name is attorney Stephanie Garces Donat. I’m the founding partner of Garces Law here in Palatine, where we help people represent, we represent them in their legacy planning, estate planning. Specifically, what is an estate is the big question that we’re gonna cover today, how it relates to estate planning and trust administration. What is an estate is today’s topic because this is a topic that comes up all the time.
I think a lot of people think that an estate is something that has to do with only real estate or only a certain thing. And so, it’s just really good for us to talk openly about these things because it’s really, how do I put it? It’s an educational piece, today. And so hopefully, you know, we can kind of touch base on some of the questions you have about what an estate is.
But, if you didn’t catch our last episode, just so you know if you’re catching up the first-time home buyer’s basic training was on our last episode. Make sure to check that out just to see what are some of the basics of selling and buying. We had expert guidance on that last one, so it’s a lot of times something that you wanna go back and see. Feel free to look at it at our YouTube page.
But like I said, when people hear the word estate, many people think about it like big mansions or it’s only for rich people, is what I hear. Sprawling grounds and just a collection of valuables that have so much value that sometimes that’s the estate. Now, if you look at the public media a lot of times, pop culture, there’s been a lot of disputes over certain estates. So, when we’re talking about the Michael Jacksons of the world, Prince is a big one. I know Aretha Franklin might have been another one, but there’s a lot of these celebrities that talk about the estate of, and so when we talk about the estate, it’s not just expensive homes and fancy cars and things like that. Usually, when we talk about it, especially in today’s Pink Mic episode, I’m going to explain to you how essential it is to truly understand what an estate is, what’s included, and how this is applicable to you. Especially what you can do to protect the estate or transfer the estate upon your passing to the person that you want. And so, when we think about this, I just like to cover it because what is an estate is not an easy question. Now, if you would’ve asked me prior to going to law school and all those things, I’d say, I don’t even know what that is.
So today we’re hoping to break it down and discuss with you what that actually means. And so, really quick, just for housekeeping items, make sure that you know that if you have any questions during this live, you can always drop them below in the chat. So, we are monitoring the comments and any questions you have. If you are too shy to put your questions on the chat ‘cause you’re afraid of people seeing it, that’s cool too. You can totally message me afterwards.
But okay, we’re gonna dive right in so that you can get the most information today on your weekly pink mic here. So, what is the purpose of an estate? That’s the number one question. So, the one thing that’s funny about when I was thinking about this topic today is that estates is for everybody.
All of us end up with an estate. So, why? Because the estate is essentially what we own during our life. And actually, when we’ve passed away, what we have at the time of our death is part of our estate. So, the advantage of an estate is basically, it’s kind of like the big picture of everything that you own.
And so having control over your estate, especially, I always call it governing from the grave within an estate plan, the ability to minimize interactions of the court having to do anything with your estate or like the state’s getting involved. Usually avoiding the probate process is one of the ways that people come and see us a lot because they say, I don’t want anyone putting their hand into my estate. Whether it’s they want their things, or we don’t want the state to get involved. There’s expenses that come from the estates, so that sort of thing. And so overall, there’s a lot of loss of privacy that happens whenever you have an estate that doesn’t have an estate plan. And I’ll tell you why.
So typically, when we talk about estate planning, people will say, what are the advantages of having an estate plan? Like, does my estate really need it? Absolutely it does, because the estate itself, unless you’ve put an estate plan together, it really isn’t private. So, everyone’s gonna see what you own. Things are matters of public record, so you can see who owns a home. I know sometimes people have concerns about that, but those are the things that come up. So, by having an estate plan that is actually well documented and an estate that is actually protected with the legal, you know, the legal documents. We always talk about on these lives. There’s tax advantages and opportunities that you can kind of take advantage of by putting an estate plan together that has specific provisions, that kind of protect your assets. Also, provisions that do help with like tax incentives, tax advantages. So, like sometimes there’s generation-skipping taxes that you can include. Some verbiage you can include in the estate plan so that the next generation is taxed and not necessarily your spouse.
There’s a lot of like charity, charity work that can be done within the estate plan as well. A lot of people have like a charitable donation that they want to include that’s part of their estate plan. So, the estate plan actually protects the estate and really upholds the wishes of some of those items to be given to a certain person or for a certain cause.
So, when we think about the estate, that’s kind of what I am mentioning. And you hear me talk about this a lot, when we think about estates, one of the questions that always comes up is what assets, accounts, properties, social provisions are included in an estate plan, and the answer to this is like, it’s just so specific to who it is, right?
Because everybody has different things. Everybody’s family dynamic is different. Some people have children, some people don’t have kids at all. Some people are married, some people are single, some people are retired. Whereas like, those provisions are not all gonna be a one size fits all, but when we think about, the estate itself, we always think about what is it that’s included in the estate?
What is something that we would wanna protect? So, the most obvious one and probably the one that we get the most concerned about and questions about is in regards to real estate. So, your home, your lots if you own empty lots. People own lake homes. You know, those are all part of the estate.
And the reason I bring this up is because when you think of real estate, people are like, I don’t have a house. I don’t need an estate plan. That is not true. That is actually one of the biggest misconceptions, I would say when it comes to an estate plan. Personal homes, vacation homes, rentals, commercial properties, investment properties are all within the real estate.
If you are currently renting, you still need an estate plan, because guess what, if you’re like any of us that you know, are running day-to-day on a checking account, things like that, I’m sure you have a bank account where you have a financial institution where you put your money in. So, financial resources, anything from IRAs,
Roth IRAs, 401ks. If you are working somewhere that has benefits or doesn’t, perhaps you have a savings account, all of those things are included, in an estate. Taxes are something that really comes up when you are dealing with retirement accounts and things like that. So, it’s important for you to kind of know what your estate is included.
So, taxes, you know, does really matter. And it kind of, you personally, depending on how much the estate has at the time of your passing. If you have a business, any sort of inherited wealth, if you’ve been, you know, if you’re part of a trust and you’ve been given this inheritance, that’s also part of the estate.
Another thing that’s part of the estate that comes up a lot is, so like, believe it or not, pets are part of the estate. So, if you have a pet up there, that is part of the estate ‘cause you’re considered still part of it. They’re not, you know, considered out of it. Healthcare directives, medical wishes, especially plans for like burials versus cremation, those are all outlined as part of your estate plan as well.
Not necessarily something that comes into play for the actual qualification of an estate, but when we put together an estate plan that’s kind of considered as part of the planning purpose of things. Healthcare directives specifically because even though you have a trust and a will and all those things, the hospitals typically wanna see powers of attorney letters. healthcare directives that kind of, you know, explain the medical wishes of a person. And so, those are usually things that are included in the estate plan. But one of the other things that comes up a lot is that there’s additional estate planning provisions that could be included for your pets, as I mentioned, or for your children.
If you have disabled loved ones, especially children, adults, special needs children, or adults in your lives, that’s something that you can also put it in your estate plan. Keep in mind that unless you do this while you’re living and you’re well, it’s very difficult to do at the last minute.
So, you don’t wanna wait for those things. But there are a lot of healthcare considerations that do come up when we think about the estate. So that is actually something that comes up quite a bit when we deal with estate plans. And the other thing that we talk about a lot is who actually owns and manages in the estate.
And so, this is something that we do put together with you when we do an estate plan. And we’re always wondering who is the person that you trust, who is a person that would manage the money, the funds, perhaps even go through and sell the property that you want them to sell on your behalf. Those are things that come up all the time.
And so having someone chosen for the estate to actually manage it is part of our job, is to help you pick the person to do that. Now, keep in mind, this is not an automatic thing. A lot of times people will say, oh I have a son and or a daughter, and they’re the oldest one. They’re the most responsible, so they’ll take care of it all.
That is great that you have that, but you certainly wanna put it in writing. Which is why the estate planning is the way that people go, because whenever you have an estate, unless you have someone actually having the authority to manage an estate, if there’s no estate plan, then you really have to go to probate. And essentially what happens is that the court has to be involved and supervise what’s going on and who’s in charge of what. So, many times having the court decide isn’t the best option. But that is one way you can actually pick who owns and manages your estate. This does differ depending on the person that’s creating it, many times too, assuming that the person creating the trust is healthy and is able to make those decisions, that’s great. But during your lifetime, you’re more likely to manage your own affairs, assuming that you create an estate plan while you’re still healthy. But sometimes, you know, there’s the inevitable that someone becomes sick or is unable to act as the, I guess the, they call it the trustee, or perhaps the grantor of the trust or the estate plan.
And so sometimes there’s additional people that step in, whether it be a successor, which is someone that steps into your shoes. Or perhaps there’s even something called the trust protector that’s also really popular that you’ll see in trust every so often. But there is a way to get someone else to be responsible. In the case you can’t.
So, for those of you that are just joining me, I just wanna recap really quickly. My name is Attorney Stephanie Garces Donat. I’m the founding partner of Garces Law Firm here in Palatine. Where we help you secure your legacy and help you prepare for the unexpected. We represent clients in a lot of matters, specifically, estate planning, estate administration, and we are doing some real estate work as well.
So, in today’s topic, we are specifically talking about what is an estate and how does it relate to estate planning and estate administration? Now, in this today’s topic, I wanna mention that when we think about the estate, everyone’s estate looks different, but everybody has an estate. So, it’s kind of funny because when I think about it, it’s almost like, it’s something that everybody has, we just dunno how to quantify it sometimes. And so that’s part of our job.
Really quick, just in case you’re wondering, we are meeting to do these Pink Mic Legal Confession podcasts. They’re on Tuesdays at one o’clock in case you don’t know what time it’s at. So usually here we share tips. We help legal guardians. We help individuals that are looking to prepare their legacy and in case anything happens and protect that legacy.
So, as many of you know, I always get questions from the viewers, specifically on this topic, but also from the clients that we serve. And so, I kind of came up with a couple of thoughts on some of the questions that I’ve gotten over the time that we’ve been doing this, but specifically, some of the more challenging questions that really do come up a lot.
And I think people are too afraid to ask sometimes. So, I’m gonna take some of the questions now. Someone had asked me that, can and estate be transferred to another person? Now this question is a little bit complicated and I’m not sure if the question is in regards to, maybe can we transfer to someone upon your death the estate? The estate itself isn’t necessarily transferred, but the things that are part of the estate can be managed and distributed. So maybe that’s really what it means. So, the estate itself, when you pass or someone passes, that person owns a number of items, a number of assets, even if it’s just a home, even it’s just a car, even if it’s whatever it may be, a bank account. They have something to their name. And so anytime that you have that, the estate. Having an estate plan actually allows you to transfer or distribute, I should say, certain things that you want the estate to distribute. So, there is a way to transfer some of the assets, to transfer some of the monies.
If you want donations to take place upon your passing, that’s what a trust can do. If you wanna give it to your grandkids or your first, you know, firstborn, that’s fine too. There’s a lot of ways to distribute what’s part of the estate, and an estate plan. I don’t know if the question is asking about transferring the entire estate over to someone else to make it someone else’s estate.
I might be looking into it too much, I’m not sure. But if that’s the question, you can’t actually take someone’s estate and give it to someone else, but for purposes of the things in the estate, yes. So for example, if you wanna leave your sports car to your grandson because you know he’ll appreciate it, you can do that.
If you wanted to leave distributions amongst your kids, you know, if you have three kids, you can, you know, 33%, something 33.3. maybe 34 for another. But you get what I’m saying. There’s ways to actually distribute your estate. So, an estate plan actually does that for you. And the best thing about it is that it actually is something you can put in writing. We counsel you through it, and you have a lot of peace of mind by the time you leave because you don’t have to worry about it anymore. So that’s a really great question.
Another question that we get every so often is if someone has no property, do they still have an estate? Yes, you do actually. You still have an estate for purposes of the word estate. You can still have no property and actually have something in your name, whether it’s a policy, maybe money that’s held up in a checking account. There’s some people that have money tied up in other ways. I’ve seen, stocks and IBANs and certain things that are part of the estate.
Now, it depends on who the beneficiary is of those estates. Excuse me, accounts because sometimes things are not necessarily, I should say, up for grabs or can be subject to distribution because if there’s already a beneficiary in some of those accounts, technically it goes to that person first.
But that is typically the thing. And so, people will say, do I still have an estate? You absolutely have another estate. You don’t not have an estate just for not having a home. So, it’s not like because you’re renting and whatnot, it does not mean that you only have no estate, it actually means you do have one. It just doesn’t include a home. So those are two different things.
The next thing that we get a lot of questions on is what happens to the money in the bank accounts if a will or a trust are not in place when the person dies? Now the answer to this is kind of an interesting one because when you have money that’s in an account that the person who’s the owner has been deceased. If there is no estate plan in place, what ends up happening is the following. First, you have to figure out if the amount is one that would require you to open up what’s called a probate estate. There are some exceptions to that rule, depending on the amount.
So usually, if it’s under a certain amount, it’s likely that you don’t have to go to probate. And it depends how many accounts there are. So, it really is a hard question to answer because it depends on the amount that’s in the account. Many times the amount is so low that all you have to do is something called the smallest state affidavit, where you don’t necessarily have to open up a probate and other times the bank account is so significant that you do have to go to probate, and it does make sense to have the court get involved to make sure that the heirs get what they’re owed.
And so, sometimes too, if there is no will or trust in place. The other question I would wanna ask for that is, is there a beneficiary to those accounts? Because the beneficiary information still is valid if it has someone that’s living and can take over the funds. So that could be distributed to a person.
So that also does kind of as an exception, assuming that they have that, you may not have to go to probate. But it is always good to have an estate plan in order just in case something were to happen where there is no direction on where that money is going. So that’s something we can account for an estate plan. So that’s a really great question.
Another question that comes up is, can the state take someone’s money if they don’t have an heir? You know, that is a great question. Now I hate to say take the money, but effectively, yes, the state can actually get involved with managing the money, if you wanna call it that.
Especially when there’s no heirs. So, you don’t wanna be without heirs and you don’t wanna have, you know, nothing in place if you don’t have heirs because yes, the state does have to get involved for the most part because there is no one to take over. And then that’s never really good.
And also, one of the questions that comes up a lot in this scenario is, you know, do you really wanna leave your money to a non-heir? Meaning it might be maybe not a director, maybe someone down the road that’s considered maybe an heir, but maybe someone you don’t speak to. So there’s a lot of unintended consequences that come from not having an estate plan and when someone doesn’t have children or doesn’t have a spouse or doesn’t have an immediate family member, there is more reason to have a trust in place or at least the estate plan so that you can actually have some control and govern from the grave, as opposed to nothing at all, which is what I was mentioning earlier. So, that’s a really good question, but I think there is some involvement there because the money, you know, doesn’t stay there forever.
So, in Illinois, how much does probate cost is the other question that we get. Now, Illinois probates, depending on where you’re at, so there’s different counties and there’s different fees and different steps to opening up a probate.
But depending on the estate is really how much a probate costs. I’ve seen really simple, meaning there’s no one fighting. There is a pretty straightforward, estate that you have to open and whatnot. If there’s no claims on the estate that might be smooth sailing. So, on a very simple level, it could cost anywhere from, let’s just say 5,000 ish and up. It could be as much as 10 or 20, depending on if there’s claims, if there’s a lot of work, if there’s different heirs fighting over the estate. So, it’s definitely not cheap. When we talk about estate planning, what we charge in an estate plan is only a fraction of what you pay to go to probate.
You know, if you weigh out both, you can see that it does not make sense to financially have to go to probate and not to mention the courts involved. And so now you have another party involved and everything is fees, everything is costs. So, it can kind of depend on how much it costs. It really depends on the estate.
It’s not a one size fits all. So that’s a really great question. But unfortunately, it depends is the answer to that, but I do know that the estate plan is cheaper than probate. So for those of you that say, oh, we should just go to probate. That would not be wise. It’s too much compared to an estate plan.
Another question that comes up is how quickly can estate planning documents be prepared if someone is sick? Now, unfortunately, we have actually experienced this a number of levels. We can do it as soon as possible. A lot of times when we have people call us for this exact service, I make sure to have the conversation with them about timing and unfortunately, we can’t control time. Time is not on our side, to be honest. And so when someone is sick, we absolutely prioritize that client to make sure we can get as much as we can, sign and complete it, while they’re well. One of the things that comes up quite a lot is that sometimes when you’re sick, you may come see, you know, our office or an attorney and they’re doing your estate plan.
But sometimes people lose capacity and so they might have actually, like a lack of capacity, meaning that they can’t make their own decisions anymore. So now you’re really up against time. Those are the things that I think come up a lot, and I never want to overlook that or kind of not talk about it because I do think that there’s a good amount of people that come when you’re sick, where even if we do it really fast, you are waiting until the last minute and so it is hard to do. We can turn it around pretty quickly, but it is all subject to the client’s capacity. You know, are they able to engage us? Are they able to work with us? And so those are things that come up. So, we do rather fast, but it’s all dependent on how they’re feeling and if they’re doing well. So those are things that do come up quite a lot.
I’ve said it once before, and I’ll say it again, please do not wait till the last minute to do something. You’re better off at least setting a consultation with us or setting the initial how-to, so at least you can understand the process, you know, to actually put them together. If someone is sick, we are under a time constraint and we’re also, you know, up against time because we don’t know if the person who is sick is gonna be well enough to sign, well enough to continue the process. And so, it is not something you wanna wait to do until someone is sick.
Another question that we get is, how much do you charge for a consultation? Recently, depending on the kind of client that we have come in, there is a free consultation upfront. If it’s for certain matters, there’s also for estate planning, we’ve been doing a hundred dollars that goes towards the purchase, or the final price I should say, of the services.
And so, dependent on the situation, we may or may not charge that. So that’s just something for us you’ll have to call about because there is, it depends on the situation. Sometimes we don’t need to do it and other times we do. So, it is just something to keep in mind. But you can always message us or, there’s questions, you know, email right below where you can contact to see if we can set up the consultation for you.
We do offer consultations in person, also by Google Meets or Zoom. For those of you that are well with Zoom, we also offer those services. So just make sure to not put it off. If you have this in your to-do list, like a lot of us, just don’t wait. You know? It’s really less intimidating when you actually know how long this takes, how much it costs, and you educate yourself in the process.
And so, just something to keep in mind in case you’re on the fence. So as far as you contacting us, you have our number, you have our email. Don’t forget to subscribe to our YouTube channel. We have a lot of information there, especially because some of it may not be relevant to you now, but perhaps to your family members, or your elderly family members.
And that is actually where we see a lot of individuals that do end up sharing our material and our content so that others can be well informed. But yeah, I think that kind of covers it. And I think when we talk about the estate, like I said, the estate is never a one size fits all. We all have an estate.
It’s just a matter of what’s in the estate. And the best thing that you can do is make sure that you’ve taken the time to really analyze, you know, am I protecting my family? Do I have this in place? I can’t tell you how many people have this in their to-do list, and they just don’t get to it. And so, make sure that you are talking with us and communicating with us. If you’re looking to get more services on that end when it comes to state planning, real estate administration, and all of that.
But you’re welcome to contact our office at any point. Schedule a consultation. If you’re navigating this estate planning stuff for the first time, it can be quite overwhelming.
So, I do invite you to join me here anytime that we have a pink mic. Please feel free to subscribe and always thank you for your time and thank you for watching. I hope you take care of yourself, and I’ll talk to you soon.