Estate planning means planning for death and for disability.
Who will speak for me if I am disabled? Who should inherit my property? Who will make sure that my beneficiaries get what I have left them? Who will take care of my children? What about my special needs child?
Making these decisions can be difficult. I can guide my clients through these decisions then prepare an estate plan to meet their goals.
Do I need a will? If you do not make a will, the State of Illinois makes one for you. Your property will go to your next of kin as determined by state law. Your estate will likely go through probate, and your family will likely pay a bond. In the case of a spouse with minor children, improper planning can cause huge problems. A minor cannot own real estate and the surviving spouse may have to get court permission to make decisions about their own home. A will can avoid this issue by allowing you to leave your property outright to your surviving spouse.
It is important to note that even with a will, your estate may require probate. But your assets will go where you direct and you can provide for your family members to avoid a bond.
Is avoiding probate important? Probate is a way of transferring the title to any assets that have not been transferred in some other way. Probate also gives creditors a forum to file claims against your estate for any money you might owe. The entire probate process can become cumbersome and expensive. For this reason, many people prefer to avoid probate, but this can depend on your personal considerations. In smaller estates, it may be possible to plan so probate may not be necessary.
What about my minor children? One of the most difficult decisions for a parent is deciding who is fit to raise their child and manage their child’s money. If possible, you should have a first choice and second choice. The guardian who raises the child need not be the same as the person who manages the money.
When should my children receive their inheritance? Many parents have reservations about their children’s ability to handle money. Fortunately, with the help of a trust, you have options. Your children can receive their money in stages or upon reaching a certain age. You can still provide access to the trust fund for higher education or medical needs or even purchasing a home.
I have a special needs child. If your beneficiary is on disability, you may have to do some extra planning so that the assets you leave your loved one will enhance the quality of their life rather than replace government benefits.
I worry about estate taxes. If you and your spouse have more than $5 million in assets, you might need to consider some tax planning. Proper trust planning can preserve the $5 million exemption for each parent to pass on to their children.
Who will make my health care decisions when I cannot speak for myself? This can be a tough one. You should choose someone who understands your philosophy on end of life care and who you trust to carry out those wishes.
What happens if I can’t take care of my financial affairs? A power of attorney and a trust can be instrumental in preparing for this eventuality. It is important to pick someone you trust, even if that means overlooking a family member.