There was a scene in the sitcom “Cheers” where the bartender hired a band to play on St. Patrick’s Day. The song the band played included the line “…And everywhere they looked it was death, death, death.” That’s what turning on or reading the news feels like now. That scene. That song. Over and over. Death, death, death.
I have been thinking a great deal about death lately, especially when I learned that a colleague from whom I sat across the table for twenty years succumbed to COVID-19.
My husband and I have been trying to motivate ourselves to update our wills. Our wills’ current versions name a guardian for our children – who are 29 and 32 now and have no need for a guardian – and make no provisions for the children who have come into our family through marriage, or our new grandchild. Hopefully we will have more grandchildren, but our current wills don’t provide for them either.
Just as all people who own property should, my husband and I have been thinking about how to ensure that our real estate passes easily and inexpensively to our beneficiaries. When my husband and I were first married, a tenancy by the entirety sufficed to do that. However, on the death of the first of us, the survivor would have a piece of property that would have to be probated if title is left solely to him or her.
In 2018, the Recorder of Deeds began refusing to record deeds on the basis of affidavits of heirship even if all known heirs agreed to sign off of title. The recorder’s office insisted that such deeds be probated before being recorded. Then in September 2018, under pressure from the Illinois Real Estate Lawyers Association (IRELA) and title companies, the recorder’s office changed its position. Consequently, when there is little property or little property value conveyed, recording deeds after an owner dies has become much easier and cheaper, as probate proceedings can cost thousands of dollars, easily consuming the equity in the property.
With a little forethought and minimal cost, owners can avoid the costly probate process by putting title to the property in an Illinois land trust or a personal trust. Drafting a personal or land is usually cheaper than probate. Specifically, deeding real property into a land trust or a personal trust costs $98 for recording the conveyance, plus possibly other costs for transfer stamps. But overall those costs are pretty minimal. Such trusts allow the surviving partner of a marriage to have the same sort of beneficial interest as a tenancy by the entirety. Settlors can name successor beneficiaries. And with personal trusts, settlors can address most if not all of the individual or couple’s property. By contrast, with an Illinois land trust, settlors can only deed real property into a trust, but there are other advantages.
Beware, however, that when successor beneficiaries who do not get along are named, things can get pretty ugly. Beneficiaries of a land trust that has not terminated by its terms cannot bring a partition suit if they want to force the sale of the property. Only property owners can do that. Since the trustee of an Illinois land trust is the technical owner of the property, the beneficiaries don’t have that option. Make sure, when you name beneficiaries, you consider what controls you need to put in place to assure that everyone remains civil.
Not surprisingly, there has been a great deal of activity in the estate planning area. The more one considers how real estate is titled, the easier and cheaper the distribution will be when the inevitable occurs.