Program Limitations

We want potential participants to be fully aware of the limited planning options available through the Pro Bono Supplemental Needs Planning Program.

To allow us to serve as many families as possible with the resources available, the program does not include planning to avoid probate or to minimize estate and other transfer taxes, and places limits on the choices of fiduciaries and the alternatives for distributing assets at death.

No Creation of Living Trusts or Other Probate-Avoidance Planning

Probate is a procedure that each state has to govern the disposition of assets located in that state when someone dies. It is intended to create an orderly process at death that protects third parties, such as a hospital, that might have a claim on the decedent’s assets. Although probate often is not as burdensome as many people fear, it is time-consuming (in Illinois, for example, the process takes at least 6 months), and it does result in legal fees and court fees. The time and cost of probate often can be avoided with careful attention to asset ownership and beneficiary designations.

Jointly-owned assets, assets with a designated beneficiary, and assets owned by a living trust all can pass outside of probate at death. As a result, married couples can avoid probate in some cases simply by using a combination of joint ownership and beneficiary designations. In other cases, probate can be avoided by titling those assets that do not have a joint owner or beneficiary in the name of a revocable living trust. A revocable living trust is a trust that you control and that can hold assets during your life and after your death.

Revocable living trusts are beyond the scope of this pro bono program.

No Transfer Tax Planning

The federal government imposes gift taxes on transfers during life, estate taxes on transfers at death (including on the value of life insurance proceeds), and generation-skipping transfer taxes on transfers that cross generations. In addition, Illinois and many other states impose a separate estate tax on transfers at death. The federal estate tax rate is a fixed 40%, and the top Illinois estate tax rate is 16%. However, there are a number of deductions and exclusions that can be used before paying any transfer tax. For example, in 2017, each person has a $4,000,000 exemption against Illinois estate tax, and a $5,490,000 exemption against federal estate tax.

If a married couple has assets (including the death benefit on life insurance) that exceed the state or federal estate tax exemption amounts in any year, there are a number of techniques they could use to minimize estate tax exposure, including credit-shelter trusts and irrevocable life insurance trusts.

These techniques are beyond the scope of this pro bono program.

Limited Planning Choices

To create an estate plan, including supplemental needs trusts for your child with special needs, you will need to (i) select fiduciaries you trust to step into your shoes for various roles if you die or become incapacitated, and (ii) determine the disposition of assets at death. To minimize the complexity of the planning, and thereby help keep program costs down, we place a number of limits on the choices of fiduciaries and on the alternatives for distributing assets at death.

View Specific Limitations on Document Choices
Printer-friendly Version

If these limitations do not work for your family, we encourage you to consult either with another estate planning attorney that has supplemental needs planning experience, or with our office outside of the pro bono program, in order to prepare appropriate documents for you.

Supplemental Needs Planning Outside of the Program