“All I have is my house. I don’t need an estate plan.” Many people have this belief. Creating an estate plan is not just for the wealthy and it is not just for persons with a multitude and variety of assets. If a person passes away in Illinois with more than $100,000.00 titled to them individually (including real property), a probate estate will need to be opened with the court. This is an expensive and time-consuming process. The probate estate must be open for a minimum of six months to allow for creditor claims and the representative of an estate must have attorney representation.

A proper estate plan, even if your only asset is your home, can avoid the cost and time of an estate administration through the court.

Joint tenancy

If a property is held as a joint tenant with rights of survivorship with another person (often a spouse), that person will automatically be the 100% owner of the property after you pass away. However, the second person to die would want to ensure proper protection for the property after his or her passing, otherwise, the property would need to go through a probate estate with the court.

Transfer on death instrument

A Transfer on Death Instrument, commonly referred to as a TODI, is a document similar to a deed, which is recorded with the county in which the property is located. The TODI names a beneficiary whom you wish to receive ownership of the property after you pass away.

Land trust

A land trust is a method of privatizing the current ownership of your property. It transfers ownership of your property to a land trust in which a bank serves as the trustee. You maintain a beneficial interest and power to convey the property during your lifetime. You can also name a beneficiary or beneficiaries of the property to whom to transfer ownership after you pass away.

Living trust

A living trust is also a method of transferring ownership of property, but to a living trust. Typically, you are the trustee and beneficiary of your living trust during your lifetime. You can then name beneficiaries of your living trust to receive trust property after you pass away. Living trusts also allow you to title other financial accounts, stocks, bonds, personal property, etc. to the living trust (as opposed to a land trust which is strictly for real property) in order to protect your estate from the probate process. Living trusts can also offer creditor protection for your beneficiaries.

It is imperative to remember that each person’s individual circumstances are unique and there a plethora of additional considerations in utilizing any of the above methods as part of your estate plan. As such, it is important to meet with a qualified and trusted estate planning attorney to discuss your options and which option would be best for you and your estate.