Law Offices of David Clough P.C.
"Often it isn't that we can't see the solution; 
it's that we can't see the problem."
-G.K. Chesterton
Available for matters in Cook, Dupage, and Will Counties
Established in 2001
Recent Emails

If you've recently been added to our email distribution list, you may have missed an email you, your family or friends might find helpful. Click on any of the links below to view our library of emails.


September 2014
How to Legally Transfer Your Assets

It is unfortunate that there are times when a loved one passes and people who barely know the decedent try to reach in and grab part of their estate. To make sure your property is bequeathed to the people you truly want to have it, and to avoid having your loved ones deal with myriad lawsuits, a good estate Estate Planning Word Circle Concept with great terms such as heir laws assets and more. plan is a necessity. 


There are three basic ways to transfer any asset when one departs this world:

  1. Through Probate
  2. Through Operation by Law
  3. Through Contract

Each way has its advantages and disadvantages. A good estate planning lawyer can help you determine which option(s) are best for you.


Things That Pass Through Probate

Only property titled in a decedent's sole name or as "tenancy in common" (commonly abbreviated TIC) will go through Probate. Probate is a court procedure whereupon the court determines what the assets are, who should get them, and if there are any claims against the estate that might interfere with the distribution of these assets. The court places high deference on what the decedent's will specifically states, and what the decedent might have meant in his/her will. Unfortunately the decedent is no longer around to specifically tell the court exactly what he or she meant when the will was signed, so the best the court can do is an educated guess.  Often they get it wrong.


A TIC is co-ownership of an asset where each person individually owns a fraction of an asset (for example, two co-owners each own 50% of the asset) which cannot be undivided. When one of the co-owners passes, his or her portion of that asset is sent through probate. The living TIC still maintains their share of the asset.



Things That Pass Through Operation by Law 

An asset that is titled "Joint Tenancy With Rights Of Survivorship" (commonly abbreviated as JTWRS) will automatically pass to the surviving joint tenant(s). While joint tenancy successfully avoids probate upon the death of the first joint tenant, it does not avoid probate upon the death of the survivor. There are tax gift considerations to be thought of, and the asset can be claimed by creditors as well.


Perhaps the biggest concern for JTWROS is the area for litigation. While the general rule is that joint tenancies pass automatically to the surviving joint tenant(s), there is an exception made for "convenience accounts" when an estate or claimant can show by clear and convincing evidence that the decedent intended the joint asset to pass in their estate and not to the surviving joint tenant. 

Things That Pass Through Contract

Contract Perhaps the best known item that passes through contract and bypasses probate is the life insurance contract. In it the decedent merely states who should receive the life insurance proceeds (called a beneficiary) when he or she passes. That money goes directly to the person without any squabble. The same is true for other beneficiary designations such as IRAs, 401(k)s, pensions, Key man insurance, etc. While this initially sounds very good, the Maker of the policy must be cognizant to keep the beneficiaries current. There have been many a time where proceeds from items such as life insurance policies are given to an ex-wife, not the current wife, simply because the decedent forgot to update the policy to indicate the new beneficiary.


A living trust and land trusts are other items that pass through contracts, as long as the asset is properly titled in that trust.  One can put anything into a living trust that they desire, but land trusts may only contain real property.


I hope this month's newsletter is helpful to you, your family, friends and colleagues. Please circulate it as you wish. And if you or anyone you know needs an estate planning attorney, I can recommend several. Contact me for more info at 312.849.3000 or email me.


View our profile on LinkedIn  Like us on Facebook 
 Follow us on Twitter  
Join the mailing list
Law Offices of David Clough P.C. | 312-849-3000 | [email protected] |
55 West Monroe, Suite 3950, Chicago, IL 60603

Copyright 2014. All Rights Reserved.