Estate planning is the responsible way of preparing for the possible eventualities of life and the inevitability of death. While for most people it is pleasurable to contemplate retirement, it is painful to imagine future illness, disability, and dying. As with so many other uncomfortable topics, however, facing reality head-on by planning your estate with a skilled attorney can be reassuring, giving you a sense of order and control.
At M&A Law Firm, P.C. we are well-prepared to take you through the process of drafting a will, a power of attorney, or establishing trusts suitable to your particular needs.
Understanding the emotional, as well as financial and logistical, components of estate planning, our attorneys are not only efficient but sensitive and compassionate. Once you have a free consultation with a member of our team, we are certain you will be convinced that you have come to the right place to stabilize your future. We will provide you with clarity concerning the complex issues to be handled. Once you become our client, we will review your plans annually to make sure they remain current as you go through life changes, like having a child or receiving an inheritance.
Why Do I Need An Estate Plan?
The purpose of estate planning is to prepare for your own future and to make life less complicated and more secure for the loved ones you leave behind. Working with our competent estate planning attorneys will ensure that your legacy remains intact and that there is a smooth transmission of your worldly possessions to those you most want to protect. Because of our extensive experience in the field, we will make sure that your estate plan is well-structured and legally binding. Furthermore, we will almost certainly give you new perspectives, helping you to prepare for contingencies you hadn’t even considered.
While many people believe that estate planning is only for the wealthy, in reality, an estate plan is more important for those of us who have small or modest estates. Whether you own a single property or have a large estate, passing away without an estate plan can subject your loved ones to a lengthy legal process and subject your assets to creditors and harsh taxes. In such cases, the smaller the estate you’re leaving, the more your family will be affected.
Creating a Will
A will, also known as a last will and testament, is a legal document that names your executor, who is assigned to distribute your assets as you have directed after you pass away. Wills also serve a number of other purposes. They are designed to:
- Name the individuals, groups, or entities (such as charities) that will inherit your property
- Name a guardian for any minor children, and an alternate guardian (in case your first choice is unable to serve)
- Describe any particulars about how you want your funeral or memorial handled
- Include any relevant information concerning your trusts and tax plans
An able attorney can help you prepare a will that will help your loved ones avoid federal taxes, although this is only necessary is your estate is very large ($5.45 million or more). A skilled estate planning attorney can also help you set up various types of trusts that may help you to avoid state estate taxes and deal with several other familial issues. The state tax in Illinois, however, like the federal tax, only applies to very large estates, in this case those valued at more than $4 million.
Your attorney will assist you in avoiding probate, a court-supervised legal procedure that is sometimes required after an individual dies. While the purpose of probate is to clarify who inherits the decedent’s property and to make sure the decedent’s debts and taxes are paid, probate can frequently be avoided by the creation of revocable living trusts. The reason you want to avoid probate is that it is a costly and time-consuming procedure that may be burdensome to those you leave behind.
Specifics of Estate Planning in Illinois
It is crucial to have an estate planning attorney who is familiar with laws particular to the state in which you reside, since such legislation varies from state to state. In Illinois, it is necessary to prepare several estate planning documents in addition to a will. These include: a durable power of attorney for financial matters, an Illinois power of attorney for healthcare, and a living will (known as a “declaration” in Illinois) to specify end-of-life wishes. These documents are invaluable if you undergo a health crisis, because they give decision-making power to people you trust with your financial and physical well-being and to whom you have made your desires known.
Power of Attorney
According to Illinois law, the person you name as your agent need not be an attorney, but must be considered trustworthy and intelligent enough to understand the full-range of your financial affairs. It is also important that this person be local to the vicinity in which you reside so he or she can meet face-to-face with others involved with your business, assets, and investments.
It is always considered wise to name an alternate for the position of agent in case your first choice is unavailable when needed. In many cases, individuals choose their spouses as agents, unaware that, if they do so, in Illinois the designation terminates if the couple divorces.
Health Care Proxy
When you designate a healthcare proxy, you name the person you have chosen to make medical decisions on your behalf when and if you become unable to do so. Our attorneys can help you to formulate such a document.
The 1996 Health Insurance Portability and Accountability Act (HIPAA) prohibits release of medical information even to those to whom you have given healthcare power of attorney. For this reason, you have to sign a HIPAA release form to enable your loved ones to have access to information about your health toward the end of your life.
Business Succession Planning
If you have a business as part of your estate and want it to survive even when you can no longer manage it, you have to prepare for your potential illness, disability, retirement, or death. Whether you own a small business or head a large corporation, M&A Law Firm, P.C. can help you establish a well-constructed business succession plan. Advantages to having a workable succession plan include:
- Guaranteeing that the succession you desire will take place
- Preventing relatives or shareholders from automatically inheriting your business
- Having shares of your business divided as you see fit
- Ensuring that your methods of management and goals for the company continue
- Making sure of uninterrupted cash flow
- Ensuring that all necessary taxes are paid
You have worked hard to develop a business that will grow and thrive. Establishing a sustainable business succession plan is a significant aspect of your estate planning. M&A Law Firm, P.C. is committed to assisting you in keeping your legacy alive.
Living Will or Declaration
A Living Will is a document in which you declare which procedures you want or don’t want when you are at the end of your life. In Illinois, if you have been diagnosed by a physician with a terminal illness, you can both describe your healthcare wishes in a living will, and give healthcare power of attorney to someone you trust to speak for you when you are unable to speak for yourself.
Other Illinois Estate Planning Laws
Some other particulars concerning estate planning in the state of Illinois include certain restrictions on who can serve as your executor. Also, as of January 2015, Illinois has a new law that restricts gifts to caregivers who are non-relatives. This piece of legislation is intended to keep caregivers from taking advantage of individuals who depend on them by cajoling or coercing patients into leaving them substantial assets in their wills. If you legitimately want to leave a gift to a caregiver who is not related to you, you should make this clear to your attorney before proceeding.
It is helpful to be aware of some of the other aspects of Illinois law that may differ from those of other states, such as:
- In Illinois, disabled individuals are entitled to have ABLE accounts, savings accounts for people with disabilities. These accounts permit them to save money without jeopardizing their disability benefits (SSI or SSDI).
- llinois is one of the few states that restricts home funerals. In this state, it is required that a licensed funeral director be involved in final arrangements.
- In addition to burial and cremation, Illinois is one of the first states to offer another option to dispose of human remains: alkaline hydrolysis. Also known as biocremation, this method is more eco-friendly than cremation, producing less carbon dioxide and fewer pollutants.
- Illinois has a form called POLST (Physician Orders for Life-Sustaining Treatment) which, though not a substitute for a durable power of attorney for healthcare, describes your wishes for healthcare in case of a medical emergency.
Intestate means dying without a will. In Illinois, as in most states, if you die intestate your assets will go to your closest relatives as determined by the “intestate succession” laws of the state. The succession laws of the state may not coincide with your personal wishes, however, which is one more reason to prepare a will early in life.
The Benefits of Establishing Trusts
Although many people think of the reason for creating trusts to be the advantage of decreasing tax liability, there are several other reasons for establishing trusts. One is that a trust provides a monetary benefit to an heir, without giving that heir a large sum all at once. This may not only be desirable, but necessary, if the heir is a minor, has special needs, or is known to be irresponsible with money.
While many people think of trusts as tools for the wealthy, sometimes trusts are even more important for those with fewer assets since trusts can ensure that your loved ones are protected from those who may infringe on their rights or from their own reckless spending. At M&A Law Firm, P.C., our attorneys are adept at setting up a wide range of trust options, such as:
Trusts for Minors
By setting up a trust for a beneficiary who is a minor, you create support for children or grandchildren who will need money as they grow — for education, medical expenses, and special interests (e.g. science, sports, arts, technological pursuits) you deem worthy. In some cases, you may want to establish trusts as incentives for young heirs. You may want to encourage them, for example, to attain a certain level of education or to accomplish a particular goal in order for them to gain access to their inheritance.
Special Needs Trusts
In many cases, individuals with special needs, whether physical or mental, are entitled to receive government benefits. For any disabled members of your family it is advantageous to live in Illinois. Because of the ABLE program in this state, these individuals are permitted to keep substantial savings accounts in their names without losing their benefits. This is by no means true throughout the country. Nonetheless, there is a limit to the amount allowed to be held in ABLE account ($100,000), so if you are leaving a disabled heir part of a large estate you may still want to set up a special needs trust to protect your disabled beneficiary.
Marital trusts are often used in situations involving second marriages. Such trusts are designed to avoid taxes and protect property. By creating a marital trust, you ensure that money left to your current spouse will go back to the children of your first marriage after the current spouse dies.
Revocable Living Trusts
Living trusts have several purposes. They are created to avoid probate, protect privacy (since wills are public documents), protect assets from creditors, and reduce estate taxes imposed by the state.
Irrevocable Life Insurance Trusts
Irrevocable life insurance trusts provide other benefits. They can protect your assets from “spend downs” in order for you to receive long-term care benefits as you age and to prevent your life insurance benefits from being taxed.
For most people, pets are part of the family and the thought of leaving beloved pets untended when their owners die is heartbreaking. Pet trust laws vary from state to state, but Illinois enacted a statute a few years ago explicitly providing for the establishment of pet trusts. When you create a pet trust, you leave assets for the benefit of your pet to be managed by a designated trustee. Our attorneys advise that the trustee be someone other than the caretaker and that an alternate trustee and/or caretaker be named in the document. In many documents of this type, some compensation is also allocated to the pet’s caretaker, to the trustee, or to both.
At M&A Law Firm, P.C., estate planning is a vital part of the legal services we provide. When we work with you, we focus intensely on your individual needs and concerns. Putting a plan in place that protects your assets, your legacy, and your loved ones is our highest priority. It is never too early to begin thinking of the future of yourself and your family. To make an appointment for a free consultation with one of our highly qualified attorneys, just give us a call or fill out the contact form on our website.