Introduction: Why Asset Management Matters in Estate Planning

At McLeod Legal Advisors, led by Rev. Aaron J. McLeod, Esq., a trusted estate planning attorney in Chicago, we understand that estate planning can seem overwhelming. Our clients frequently ask questions about how to properly manage and designate their assets to ensure their wishes are honored and their loved ones protected. In this first installment of our two-part series, we address the most common questions about handling assets in your estate plan that every Illinois estate planning attorney regularly encounters.

Joint Ownership vs. Transfer-on-Death: What Your Estate Planning Attorney in Illinois Wants You to Know

Q: What’s the difference between joint ownership and transfer-on-death designation?

As an experienced Chicago estate planning attorney, Rev. McLeod explains that joint ownership (often called “joint tenancy with right of survivorship”) means that two or more people own property together. When one owner dies, the property automatically passes to the surviving owner(s) without going through probate. This is commonly used between spouses for real estate, bank accounts, and investments.

Transfer-on-death (TOD) or payable-on-death (POD) designations allow you to name a beneficiary who will receive the asset upon your death, also avoiding probate. Unlike joint ownership, TOD/POD beneficiaries have no rights to the asset while you’re alive—they only receive the asset after your death.

The key differences that any knowledgeable estate planning attorney in Illinois will highlight include:

  • Control: With joint ownership, all owners have equal rights to the property immediately. With TOD/POD, the beneficiary has no rights until after your death.
  • Creditor exposure: Joint owners’ creditors may potentially reach jointly-owned assets. TOD/POD assets are not exposed to beneficiaries’ creditors during your lifetime.
  • Flexibility: TOD/POD designations can be changed anytime without the beneficiary’s consent, whereas removing a joint owner typically requires their agreement.

As we explain in our estate planning materials: “Property held in joint tenancy passes to the surviving joint tenant without the need for probate. Likewise, insurance, individual retirement accounts, pension plans and other employee benefits may pass to living persons by virtue of beneficiary designations—not by will and probate.”

Beyond Beneficiary Designations: Why Your Chicago Estate Planning Attorney Recommends Trusts

Q: If I hold my property jointly, or use a TOD or POD, do I need to have a Trust?

While joint ownership and TOD/POD designations can help avoid probate, they are not comprehensive estate planning solutions. As a dedicated estate planning attorney in Chicago, Rev. McLeod advises that a trust offers several advantages that these methods don’t provide:

  • Incapacity planning: As our practice literature explains, “A living trust also protects against nonmanagement or mismanagement of assets during physical or mental incapacity. If you become incompetent, a successor trustee can take over management of the trust without a court proceeding and without interruption.”
  • Conditions and control: Trusts allow you to specify conditions on inheritances and extend control over assets beyond your lifetime, which TOD/POD designations cannot do.
  • Privacy: “Probate records are open to the public; a living trust is not,” as our materials note. TOD/POD designations may become public in certain circumstances.
  • Comprehensive asset management: A trust can hold and manage virtually all types of assets under a unified plan, whereas TOD/POD and joint ownership must be set up separately for each account or asset.
  • Protection against unintended consequences: Proper trust planning can prevent accidental disinheritance in blended families and provide for minor children, which simple beneficiary designations often fail to address.

At McLeod Legal Advisors, our approach as an Illinois estate planning attorney firm is to recommend a combined approach using appropriate beneficiary designations within a comprehensive trust-based plan.

Retirement Accounts and Life Insurance: Important Considerations from an Estate Planning Attorney in Illinois

Q: What happens to retirement accounts and life insurance policies after death?

Any experienced estate planning attorney in Illinois will tell you that retirement accounts (like 401(k)s and IRAs) and life insurance policies pass directly to the named beneficiaries upon the owner’s death, outside of probate. This is why proper beneficiary designations are crucial.

For retirement accounts:

  • The named beneficiary can typically choose between taking a lump sum or structured distributions
  • Spouses have special rollover rights that non-spouse beneficiaries don’t have
  • Distribution rules and tax implications vary depending on the type of account and the beneficiary’s relationship to the deceased

For life insurance:

  • Proceeds typically pass tax-free to beneficiaries
  • The insurance company pays the designated beneficiary directly upon receiving the death certificate and claim forms
  • If no beneficiary is named or all named beneficiaries have predeceased the insured, proceeds may be paid to the estate and subject to probate

As we note in our practice materials, these assets “may pass to living persons by virtue of beneficiary designations—not by will and probate.” However, it’s critical that these designations coordinate with your overall estate plan to avoid unintended consequences. This is why consulting with a knowledgeable Chicago estate planning attorney is essential.

Asset Inventory: A Critical Tool Every Illinois Estate Planning Attorney Recommends

Q: Do I need an inventory of my assets?

Absolutely. A comprehensive asset inventory is essential for effective estate planning and administration. Without one:

  • Your executor or successor trustee might miss valuable assets
  • Your family may struggle to locate accounts, insurance policies, or digital assets
  • Important property might end up in probate unnecessarily
  • Your estate administration could be delayed and more expensive

At McLeod Legal Advisors, as thorough estate planning attorneys in Chicago, we guide clients through creating detailed asset inventories as part of our estate planning process. This includes helping you:

  • Document financial accounts, real estate, business interests, and personal property
  • Record digital assets, including online accounts
  • Note how each asset is titled and any beneficiary designations
  • Update the inventory when significant changes occur

As our client Mrs. Patricia K. Owens recently experienced, our thorough estate planning process ensures all your assets are properly accounted for and integrated into your estate plan—a service any reputable Illinois estate planning attorney should provide.

Maintaining Your Estate Plan: When to Consult Your Estate Planning Attorney in Chicago

Q: How often should I review my asset inventory and account designations?

As a diligent estate planning attorney in Illinois, Rev. McLeod recommends reviewing your asset inventory and beneficiary designations:

  • Annually: A quick check to ensure your inventory remains current
  • After major life events: Marriage, divorce, births, deaths, relocations
  • Following significant asset changes: Purchasing or selling real estate, receiving an inheritance, changing jobs (and retirement plans)
  • When tax laws change: New legislation may require adjustments to your estate planning strategy

This regular review process helps ensure that all your assets are properly aligned with your estate plan and that beneficiary designations remain current with your wishes. Your Chicago estate planning attorney should be available to assist with these reviews.

Organizing Estate Planning Documents: Best Practices from an Estate Planning Attorney in Chicago

Q: What’s the best way to organize and store my asset information?

Effective organization of your asset information is crucial for your peace of mind and your family’s security. As experienced estate planning attorneys in Illinois, we recommend:

  1. Create a master document: Compile a comprehensive list of all assets, account numbers, institutions, online login information, and the location of important documents. Include contact information for financial advisors, attorneys, and accountants.
  2. Secure digital storage: Consider a password-protected digital file or secure online vault for electronic copies of important documents and your asset inventory.
  3. Physical storage: Keep original documents (wills, trusts, deeds, etc.) in a fireproof safe or safety deposit box. Ensure your executor or trustee knows the location and has appropriate access.
  4. Sharing information: Inform trusted family members or your executor about where to find your asset information in an emergency, without necessarily sharing all details during your lifetime.
  5. Regular updates: Set calendar reminders to review and update your asset information at least annually.

At McLeod Legal Advisors, we provide our clients with specialized asset inventory tools and secure storage recommendations tailored to their specific situations—a service that sets us apart as dedicated Chicago estate planning attorneys.

Comprehensive Estate Planning Services from Your Illinois Estate Planning Attorney

At McLeod Legal Advisors, our estate planning practice goes beyond simply drafting documents. We partner with you to create a comprehensive estate plan that addresses all aspects of your asset management and distribution. Our process as committed estate planning attorneys in Illinois includes:

  1. Thorough asset review: We help you identify all assets and how they should be handled in your estate plan.
  2. Strategic beneficiary designation planning: We ensure your account designations align with your overall estate planning goals.
  3. Customized trust solutions: As our literature explains, “Estate planning can be accomplished through a variety of methods, including revocable trust agreements, simple and complex wills, powers of attorney, advanced medical directives and living wills, insurance trusts, marital planning, charitable trusts & other charitable arrangements.”
  4. Ongoing support: We help you maintain and update your plan as your life and assets change.
  5. Family communication assistance: We can facilitate conversations with your loved ones about your estate plan when appropriate.

As McLeod Legal Advisors emphasizes to all clients, proper asset management within your estate plan isn’t just about avoiding probate—it’s about ensuring your wishes are honored and your loved ones are protected. This is the mission of every dedicated estate planning attorney in Chicago.

Contact Your Chicago Estate Planning Attorney Today

Don’t leave your family’s future to chance. Contact McLeod Legal Advisors, your trusted Illinois estate planning attorney firm, today at (312) 725-9974 or amcleod@mcleodlegaladvisors.com to schedule a consultation. Our office is located at 1510 E. 55th Street, Unit #15396, Chicago, IL 60615-2598.

This blog is for informational purposes only and does not constitute legal advice. For specific advice regarding your situation, please consult with a qualified estate planning attorney in Illinois.