Parents experience indescribable and immeasurable joy as their children grow. They shudder at the thought of life without their kids – or of their children's life without them. No wonder, then, that only 36% of parents with minor children have written a last will and testament. In the absence of that legal document, though, a minor child could confront emotional and financial uncertainty.

Intestacy means only the law matters

When one dies without a will, or intestate, state law determines much of a child's future. Illinois, for example, distributes intestate assets per stirpes, which roughly means equally. Importantly, the number and type of other surviving kin will dictate what a child, or children, receives.

Naturally, young parents also could assume a family member will care for their children – but without a will, the courts will play an active role in that determination. A guardian will assume legal custody of the child should unforeseen events in either the parents' or the presumed caretaker's lives occur. In Illinois, guardianship and its cousin conservatorship require court approval.

Trusts are a potentially valuable part of estate plan to consider and to understand. For that reason, estate planners should be familiar with the benefits of including a trust in their estate and what they do.

Advantages of a trust

There are a variety of different potential advantages of a trust to be aware of including:

• Placing conditions on how and when the estate planner's assets are distributed;
• Reducing estate and gift taxes;
• Distributing assets to beneficiaries efficiently without the cost, delay and publicity of the probate court. Probate can cost between 5% to 7% of the estate planner's estate and may be costly and time consuming;
• Better protecting the estate planner's assets from creditors and lawsuits; and
• Naming a successor trustee who will manage the trust after the estate planner passes and is also empowered to manage the trust assets if the estate planner becomes unable to do so.

Choose from various types of trusts

Additionally, there are a variety of different types of trusts that can help the estate planner achieve different goals and that can serve different purposes on their own or as part of an estate plan. A trust can be used alongside a will as part of an estate plan or may be used on its own in place of a will.

Many people in Illinois probably think of bankruptcy options as a “last resort” when it comes to financial problems. And, some will even think that there is “shame” involved in considering bankruptcy options. In many cases, these concerns may come from a lack of knowledge when it comes to the basics about the bankruptcy process, particularly Chapter 7 bankruptcy.

Chapter 7 bankruptcy basics

Chapter 7 bankruptcy is, perhaps, the most common form of bankruptcy that individuals and families pursue. It is commonly known as “liquidation” bankruptcy. At its most basic, this form of bankruptcy allows an individual to list assets alongside debts, have the assets sold off by a bankruptcy trustee and then have the proceeds from those sales applied toward outstanding debt. In the end, any debt remaining is discharged and the filer has a “clean slate.”

Of course, there is more to it than that. For example, not all of your assets will be included in the bankruptcy case. Some assets are “exempt” from the bankruptcy process. And, another perk is that as soon as you file your bankruptcy case an “automatic stay” is implemented, which means that creditors can no longer harass you about your debt or missed payments.

Like other states, Illinois has a law which determines how a deceased person's property will be divided if the person did not leave a will.

The law also applies if the person did leave a will, but the will does not get admitted to probate or later gets invalidated in a will contest. Finally, the law will apply if a person has a valid will, but the will does not cover all of the person's property.

It is important to remember that the law will not apply to property which by law does not pass through probate. Property held in trust, life insurance proceeds, retirement accounts like 401(k)s, joint bank accounts and jointly held real estate.

When residents of the western Chicago suburbs are considering estate planning, the last thing on their minds might be the filing of a bankruptcy

However, depending on a person's circumstances, a Chapter 7 bankruptcy may be in their best interests as they move into their retirement years.

Claims do not necessarily die with a person

Debts do not always automatically go away when a person dies. The creditor has an option to file a claim against the person's estate. A valid claim will get paid first, meaning the person's loved ones get what is left over.