Probate and Trust Administration

At the Law Offices of Raymond F. Dalton, Jr., P.C., we spend a considerable amount of time with probate and trust administration matters. Estate and trust administration is generally defined as the process of finding and distributing assets owned by a decedent.

In general terms, this involves court filings for probate administration and assisting trustees of trusts in transferring assets in accordance with the terms of the trust in non-probate administrations. After a death, the personal representative, executor or successor trustee must create a list of all assets, determine exactly how they are titled (joint tenancy, individually, in trust, etc.), determine beneficiary designations where applicable, and determine the date of death values of all assets. All liabilities of the estate must also be determined, and any outstanding bills and expenses must be paid.

How the assets are owned by the decedent determines whether they are subject to probate, and how and to whom those assets will be distributed or allocated. The ownership also determines whether an asset will be included in the taxable estate for death tax purposes. The value of assets at death determines whether death tax returns are required to be filed. It will also determine the income tax basis of those assets in the hands of the beneficiary. This new income tax basis will determine potential gain or loss if the beneficiary later sells the assets.

Estate and Probate Administration

Probate administration is required if the value of the decedent's assets, other than real estate, exceed the Illinois threshold for small estates-currently $100,000 - or if the decedent owned real estate in Illinois. This is true whether or not the decedent had a Will. Probate consists of filing the necessary court papers to open a probate estate, court appearances as required to prove-up a Will and close the estate as required.

We are available to represent the executor in all aspects of estate and probate administration in all counties in northern Illinois, specifically, Kane, DuPage, McHenry, DeKalb, and Cook Counties.

Trust Administration

Where the decedent had a revocable living trust as the person's primary estate planning document and if assets were properly titled in the name of the trust, trust administration is necessary. Our office provides assistance to the successor trustee in carrying out the terms of the revocable living trust.

Related Administration Issues

Assets which have a beneficiary designation, such as life insurance, annuities, Individual Retirement Accounts, profit sharing plans, 401(k) plans and other retirement assets, are controlled by the beneficiary designation on file with the company or retirement plan custodian. We provide assistance collecting these assets.

Guardianship Administration

If an adult becomes disabled or in the event assets are left to a minor child it is sometimes necessary to open a court guardianship to manage the assets of the disabled adult or minor child. We are available to assist you in the appointment of a guardian to comply with the statutory requirements of guardianship.

Federal and Illinois Estate ("Death") Taxes

Federal Death Taxes - Under the federal estate, or death tax system, all assets in which a decedent had an interest at the time of his or her death are subject to taxation. There are few exceptions. If you "own" it, it is included as part of your "estate" for death tax purposes. There is an exemption from death taxes which effectively means 98% to 99% of the people in this country do not pay any federal death taxes. The current and projected federal estate tax exemptions are as follows:

Note that for persons dying in 2010 there will be no federal estate tax, but the exemption reverts to $1 million on January 1, 2011, unless Congress acts again (which most everyone expects them to do).

The Law Offices of Raymond F. Dalton, Jr., P.C., assists clients in reducing their potential federal estate tax burden (which is significant as federal estate taxes average about 45% of the amount in excess of the federal estate tax exemption). This is generally a long-term process and utilizes current strategies such as marital deduction trust planning, gifting, family limited partnerships, and charitable trusts. We also prepare and file the various tax reporting documents (Federal Form 706) on behalf of estate representatives.

Illinois Death Taxes - As a result of the recent tax reduction laws passed by the United States Congress, Illinois, as have many other states, has decoupled from the federal estate tax system. This means that Illinois has a separate system for determining Illinois death taxes. Illinois generally taxes estates, which are not left to a surviving spouse, in excess of the lesser of the federal estate tax exemption or $2 million.

The Law Offices of Raymond F. Dalton, Jr., P.C., is available to assist you, your executors, successor trustees, and personal representatives in complying with the statutory filings and minimizing the Illinois estate tax.

Tax Filings - Estate and trust administration also involves the filing of necessary tax returns, including a final personal income tax return (Form 1040), fiduciary income tax returns for the estate or trust (Form 1041), and, where applicable, a federal estate or death tax return (Form 706).

Fees - Fees for legal services are based upon the circumstances. In some cases, fees are based upon our current hourly rates and in others on a percentage of the estate's assets. In any case, legal fees will be agreed to in advance of work being performed and will be confirmed in writing.