Contrary to what many people believe, you do not have to reach a certain age before you start your estate plan. Estate planning should begin as soon as you are old enough to own assets – usually at age 18. Your estate plan will likely grow and expand throughout the years as you mature and your assets grow; however, everyone should have at least a basic estate plan in place as soon as they reach the age of majority. Find out why an estate plan is important.
Although your Illinois estate planning attorney will guide you through the process of creating your estate plan, it is always good to take some time and think about your plan before you get started because there are a number of important decisions you will need to make when you actually create your plan. Some decisions are obvious, such as who will be the beneficiaries of your estate; however, there are other decisions you must also make that you may not have thought about. For instance, who will be the Executor of your estate?? Who do you want to control your assets if you become incapacitated? How do you want your estate assets distributed? Learn more about questions you need to ask yourself when estate planning.
One of the most common mistakes people make is believing that they can save time and money by using DIY estate planning forms they find online or at local stationary stores. The reality is that there is a very high likelihood that the DIY Will form (or other estate planning document) you find will be defective in some way. Counting on that form, therefore, as part of your estate plan will likely cost your loved ones far more time and money down the road than you saved by not working with an experienced estate planning attorney. Find out more about the risks of using DIY estate planning formsand other common estate planning mistakes.
A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories – testamentary and living trusts. A living trust (formally referred to as an inter vivos trust) takes effect immediately after creation unlike a testamentary trust which does not take effect until the death of the Settlor. Living trusts are very common additions to the average estate plan because of the variety of estate planning goals that can be met using a living trust. Learn more about living trusts.
Probate is the legal process that follows the death of an individual. Probate ensures that all the decedent’s assets are accounted for and properly transferred to the new owners as well as serves to make sure estate taxes are paid and that creditors of the estate are provided the opportunity to file claims against the estate before assets are transferred to the intended beneficiaries and/or heirs of the estate. Learn more about the probate process.
In a word – yes. Everyone should understand the impact federal gift and estate taxes could have on their estate. Because not all states impose a state estate tax or inheritance tax, not everyone needs to worry about state level estate taxes. If you live in the State of Illinois though, you do, because Illinois does have an estate tax. Moreover, the exemption limit for Illinoi’s estate tax is lower than the federal lifetime exemption limit, meaning your estate could incur estate taxes in Illinois but not be subject to federal gift and estate taxes.
Although most people prefer not to think about it, incapacity can happen to anyone at any time. If you were to become incapacitated tomorrow as a result of a tragic accident or debilitating illness, who would take over control of your assets? Who would make medical decisions for you? Incapacity planning allows you to answers those questions ahead of time. An incapacity plan will include tools and strategies that allow for the shift of control of your assets as well as the appointment of someone of your choosing as your Agent for the purpose of making health care related decisions for you if you are unable to make them at some point in the future.
The older you are, the higher the odds that you will need long-term care at some point in your life. The cost of long-term care runs, on average, over $80,000 a year across the country. The State of Illinois is about on par with the national average, running just under $80,000 a year, on average, for long-term care. Most private health insurance plans will not cover the costs nor will Medicare, which is why over half of all seniors to turn to Medicaid for help covering the expenses of long-term care. Qualifying for Medicaid, however, can be problematic because of the income and asset limits that are imposed on applicants. By including Medicaid planning in your overall estate plan you can protect your assets and set yourself up to qualify for Medicaid benefits in the event you need them down the road.