What Exactly Is An Estate Plan?
Estate planning is the process of determining how one would like to dispose of her/his assets upon their death and how they would like to manage or have them managed during their lifetime. It usually involves creating a will and a trust, as well as powers of attorney for property and health care.
Do Most People Think They Don’t Have Sufficient Assets To Create An Estate Plan?
Usually, people contact me thinking they only need a simple will. Whether people have a great deal of assets or a small amount of assets, they usually have this subject on the back burner. Unless they’re prodded, it never gets to the front burner. After all, they are not going to die. Right?
Why Do We Need An Estate Plan?
People need an estate plan in order to control and determine a) who is going to receive their assets; b) If they have children, who would be the person to take care of and bring up their minor their children. If they don’t have an estate plan, the state in which they live will determine to whom their assets are distributed. They could be distributed to people who they would rather not receive them. If they have children, unless they name guardians for them in their will, there could be conflicts between family members as to who is going to take care of those children, and a person or persons who they would never have chosen could be appointed by the court. Life is uncertain and anything can happen.
If you place your assets in a trust and something was to happen to you while you’re living and you become incapacitated, your trust agreement can also provide for successor trustees, who you choose. A trustee or trustees will take care of and manage your assets, and you will also be able to avoid having a public proceeding where you are declared incapacitated. With a trust, everything remains confidential within the parameters that you have set forth. It allows you to manage and control your estate during your lifetime. A trust will also make provisions for the management and distribution of your assets and the enjoyment of those assets, after your death.
What Happens If Someone Dies And Does Not Have An Estate Plan Or Even A Will In Place?
If you don’t have an estate plan in place and you’re married with children, under Illinois law your spouse will receive only one half of your estate. Your children, who may not be able to manage your estate, will divide the other half. Your surviving spouse would be deprived of the benefit of all the assets that he or she could manage and control while he or she is still alive. If you had created a trust, all of the assets would remain in trust for your surviving spouse’s lifetime and the use for her benefit as well as for the benefit of your children. At the death of your surviving spouse, or upon your death, if he/she should die before you, your children will then have the benefit of those assets either in a lump sum or in scheduled distributions in accordance with your directions. In the meantime, a trustee will manage the trust for your children’s benefit and care, comfort and education.
If you have not named a guardian for your children and you and your spouse both die, your children would receive the assets outright. If any of them are minors, under the age of 18 in Illinois, a guardian would be appointed not only for their person but also for their estates. Everything is decided by the courts and it could raise significant conflicts with surviving family members, as well as becoming very expensive. Having a will, a trustee, and powers of attorney for property and healthcare can save you a lot of money, as well as significantly reducing or eliminating what could be a very stressful situation.
How Often Should People Review And Update Their Estate Plans?
Every three to five years, you should take a look at your estate plan and discuss it with your attorney. Children become older and their circumstances, as well as their needs will change. You may also become less able to handle your affairs. Tax laws often change and other laws that affect your estate may change, as well. It’s always good to get a periodic checkup and see what, if anything has changed that might affect your decision-making. You may have gone into a different business; you may have a retirement plan that you didn’t have before, or you may have sold some assets and replaced them with other assets. You may have acquired other assets which should also be placed into your trust. If not, those assets may necessitate a probate.
For more information on Estate Planning Process In Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (312) 815-7778 today.
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