In this article, we answer the question, can a guardian create an estate plan on behalf of a ward in Illinois?
This means that, in order to create a valid will or trust for a ward, the guardian must file a petition requesting leave to do so with the probate court that has jurisdiction over the guardianship case.
In creating the estate plan, the guardian of an estate must create the estate plan in the way that the ward would have wished had he or she been of sound mind. In determining whether the estate plan meets this “substituted judgment” standard, the court will consider:
- Whether the estate plan is set up in such a way as to ensure that the ward’s own current and future needs are provided for;
- Whether the estate plan provides for the ward’s children, grandchildren, and other close family members;
- Whether the ward is estranged from any heirs who would otherwise inherit in absence of the proposed estate plan;
- Minimization of estate taxes and income taxes; and
- Provision of gifts to relatives, friends, and charities that the ward would likely have provided had he or she been of sound mind;
- The ward’s wishes to the extent they can be determined from conversations with the ward, previous estate planning documents, and beneficiary listings on life insurance and retirement accounts.
In creating an estate plan for a disabled adult, the guardian is empowered (with court approval) to:
- Create revocable and irrevocable trusts that extend beyond the life of the ward;
- Enter into contracts;
- Change beneficiaries and ownership on life insurance policies, annuity policies, retirement accounts, and investment accounts; and
- Modify existing estate planning documents to the extent it is advantageous to do so in light of changes in tax laws.
In the petition to create or modify an estate plan for the ward, the guardian must briefly outline the following:
- The action for which he or she seeks court approval;
- The results that the guardian expects to accomplish;
- Any tax savings that are expected from such actions; and
- That any such actions are consistent with the intentions of the ward to the extent they can be determined.
Notice of the petition must be provided to all parties impacted by the prospective changes.
It is important to note that just because an individual has been adjudicated as being disabled and has had a guardian appointed, this does not mean that he or she necessarily lacks the legal ability to execute his or own estate planning documents without the involvement of the guardian.
In order to execute a will or trust, the disabled adult must have testamentary capacity. This means that he or she is able to understand (1) what property he or she possesses; (2) who his or her children and grandchildren are; and (3) what he or she is accomplishing in executing the estate plan. It is possible to have a guardian appointed and still retain testamentary capacity.