Most people want to make sure their families are taken care of once they pass away. However, in the event of prolonged illness or long term care, that goal may not be possible to achieve. Medical expenses and long term care can reduce the value of an estate very quickly. Heirs and family members may wonder who is responsible for the payment of debts after death. The answer may depend upon the status of the estate once the decedent has passed.
A solvent estate is one that has enough assets to pay off all of the debt of the decedent. The estate representative will pay off all of the debts using the assets of the estate. For example, if the estate is worth $500,000.00 and the debts add up to $200,000.00, after the debts are satisfied, the estate would then be worth $300,000.00. If the decedent has left a Last Will and Testament, the remaining monies would then be given to the people that were named therein.
An insolvent estate results when the decedent left more debts than assets. For example, if the final debt amounts to $100,000.00 and there is only $50,000.00 in the estate, the estate is considered insolvent. In this case, the representative would then have to prioritize the payment of the bills based on state law. There may be creditors that will be paid in full while others may receive a partial payment or none at all.
The Bottom Line
In the case of an insolvent estate, there will be no monies that will be paid out to those named as beneficiaries in the Last Will and Testament. The beneficiaries or heirs to the estate will not be responsible for payment of these debts unless one of them was contractually obligated. For example, if the heir was a co-signer or guaranteed payment of the debt, they may be liable for the debt. If you have questions regarding the planning of your estate or the impact that debt may have upon your estate plan, an experienced Illinois estate planning attorney can assist you.
More than 5 million Americans suffer from Alzheimer’s, a progressive brain disorder that leads to the eventual loss of memory, reasoning and intellect. According to Centers for Disease Control and Prevention (CDC) statistics, it is the sixth leading cause of death in the United States. While numbers rise for newly diagnosed cases, funding for research to combat the disease is not materializing fast enough.
The National Institutes of Health (NIH) reports an estimated $562 million in funding for Alzheimer’s research in fiscal year 2014. The Alzheimer’s Association estimates that the cost of care will exceed $200 billion this year and reach $1.2 trillion by 2050. A survey of 170 leading biomedical scientists released this year by BrightFocus Foundation, a Maryland-based nonprofit, revealed that:
- 91 percent of respondents believed funding shortages are related to scientist retention in research
- 96 percent of those surveyed saw limited funding as a deterrent for attracting new scientists to the field
- 94 percent of the survey participants felt that the lack of funding is an obstacle to advances in research
Last year, the Illinois Health Department awarded more than $100,000 in Alzheimer’s research grants. Illinois taxpayers have freely contributed more than $4 million to Alzheimer’s research efforts since 1986. Those funds supported 166 research projects. With laws such as the National Alzheimer’s Project Act (NAPA) and legislation introduced in Congress (S. 709/H.R. 1507) bringing attention to Alzheimer’s issues, one can only hope that increased funding is not far behind.
If your family has been impacted by Alzheimer’s, contact an experienced Wheaton, Illinois attorney handling elder law and estate planning issues. Capture and protect your intentions for future care and the well being of your loved ones.
If you do not have a lot of money or assets, you may be wondering why it is important for you to have a will. However, a will is not only for the rich. You do not have to be rich to feel that you have something of value. Perhaps it is a precious belonging that you want a certain person to have. If you do not have a will in place, you will not have a say in how things are managed once you are gone.
A will can be changed as your life changes. According to CNNMoney it is a good idea to review your will periodically, particularly if your marital status changes or if your family expands. It is also recommended that you review your named beneficiary on any retirement such as any IRA and 401 (k) accounts, as these will automatically be transferred upon your death. If your beneficiaries are deceased or no longer in your life, you want to ensure your assets transfer to those you care about most.
Even if you do not have material assets, a will is important if you have minor children. In your will, you can assure that your wishes for the guardianship of your children is clearly reflected.
Even if you have a trust, a will goes hand in hand with the trust. A trust will stipulate how assets are distributed and to whom; a will is still necessary in the event you have assets that were not placed in trust in order to determine how those assets are distributed upon your death.
Some people feel that they have plenty of time to address these matters. The thought of planning for one’s death does evoke happy thoughts. However, being prepared helps make the transition easier and smoother for those left behind. If you have questions about types of wills or if you are in need of a will, contact an Illinois Estate Planning attorney.