Estate Planning After Buying a Home in Lockport and Will County

Why the closing is a good time

At the closing you sign a stack of papers, and one of them is the deed that says how title is held. That choice already decides what happens to the house when you die. If you bought alone, the home is in your name. If you bought with a spouse or partner, the deed says how the two of you hold it. Few buyers stop to ask what that means for the family.

If the closing is still ahead, talk to Jeff before you sign. If you already closed, you can still change how title is held with a new deed. See real estate closings and deeds and titles.

Option one: leave it in your will

If title stays in your name and you have a will, the house is part of the estate that the court oversees. The executor you name handles it. This is the simplest paper plan, and many households start here. The cost is the court process, which the Will County probate process page walks through. If you have no will, state law chooses who gets the home. See dying without a will in Illinois.

Option two: deed the home into a trust

A revocable living trust holds property that you transfer into it. For a house, that means a new deed from you, as owner, to yourself or someone as trustee of the trust. The deed is signed and recorded with the county. You keep living in the home and you can change the trust. When you die, the successor trustee you named handles the house under the terms you wrote.

• A trust is only as good as its funding. A trust that never received the deed does not control the house.
• Tell your mortgage company and your homeowner's insurance company about the change.
• Ask your title company how a deed into a trust affects your title coverage.

The revocable living trust page explains how these work, and will versus trust compares the two.

Option three: a transfer on death instrument

Illinois has a Real Property Transfer on Death Instrument Act, 755 ILCS 27. It lets you name who receives the real estate at your death while you stay the owner. The law has firm rules, and breaking one makes the instrument void:

• It must state that the transfer happens at your death.
• It must be signed with two credible witnesses and acknowledged before a notary.
• It must be recorded in the county recorder's office before you die.

The details are on the transfer on death instrument page. A TODI works for some families and is a poor fit for others, for example when children are minors or a beneficiary may not be able to manage a property.

If you bought with a spouse or a partner

How you hold title with another person matters. Some forms pass the home to the survivor automatically, and some do not. A couple who are not married, or a couple with children from earlier relationships, should be careful about the deed. A deed that is right for two first marriages can leave a stepchild or a partner out. See blended family estate planning.

Questions to bring to the first call

Bring the deed or the closing papers, if you have them. Jeff will want to know who is on title, whether there is a mortgage, who lives in the home, and who you want to have it later. He will also ask whether anyone in your family has a disability, a debt problem or a strained relationship with another relative, since those facts change which option fits.

Say if you plan to buy more property or move soon. A plan built around one house needs to work if you sell that house in five years, and if you buy another one. Documents can be written so they still work after the next purchase.

A short list for new homeowners

• Keep your deed and closing papers in one safe place.
• Review who is on title and how title is held.
• Update your will or trust so the house is listed or covered.
• Check homeowner's insurance and who the named insureds are.
• Put a property power of attorney in place so someone can handle the house if you cannot. See power of attorney for property.

Reviewed by Jeff McCarthy, Attorney, Inspired Law Group, 136 E 9th St, Lockport, IL 60441.