4 Common Estate Planning Mistakes in Illinois

 Posted on January 22, 2021 in Estate Planning

Estate planning can be simple, but most often, it is a bit more complex than most people realize. Regardless of your situation, the best way to ensure your wishes are known and followed after your death is to have the proper documents in place by creating a will and appropriate trusts with the help of a skilled estate planning attorney. It also helps to know some of the most common mistakes made by those creating estate plans, including:

Failing to Plan at All

The statistics are alarming: more than half of all Americans do not have an existing will. Unfortunately, if you die without an estate plan, your assets will be divided according to the intestate succession laws of Illinois. Not only is it highly unlikely that this will happen according to your wishes, but the process of probate can end up chipping away at—and potentially decimating—the assets you have left behind.

Another concerning matter is that, if you should die without a will and have minor children, there is no guarantee as to who will assume responsibility for their guardianship until they become adults. Avoid this common mistake, and take the first steps in creating an estate plan today.

Not Maximizing Marital Estate Exemptions

Federal law includes a “portability” provision that allows each individual an $11.58 million federal estate tax exemption in 2021. Under the current law, the exemption amount is set to drop to $5 million plus inflation adjustments in 2026. If one spouse dies without using the full exemption amount, the unused portion can be transferred to the surviving spouse, tax-free. If the surviving spouse dies soon after, the unused portion from the first deceased spouse, along with their own unused portion, can be transferred to minor children or the next heir without being subject to federal estate taxes.

Unfortunately, many fail to consider other factors, such as unpaid creditors, state taxes, or inflation. This short-sightedness can lead to a significant difference in the value of the estate left over compared to what was expected. As such, it is important to look at all of your options with the help of an experienced estate planning attorney.

Naming a Family Member as the Executor or Trustee of Your Estate

Appointing a family member as the executor of your estate or a trustee may seem like the most logical answer, and in some cases it is a good decision. However, it is important to remember that your loved one will be handling their own grief after your death. Adding the responsibility and stress of handling conflicts, financial matters, and other possible issues can be burdensome. Instead, consider hiring a professional along with a family member to help save time, money, and emotional stress for your loved one.

Counting on Family and Friends to Offer Estate Planning Advice

Most people look to their friends and family when they need advice for personal matters. However, it is important to understand that your financial planning should only be handled by a professional. Your family and friends are not likely to have a full understanding of your situation, and even if they do, they probably do not have the extensive training and experience of a qualified estate planning lawyer.

Contact a DuPage County Wills and Trusts Lawyer

If you are ready to begin the process of estate planning, the skilled team at A. Traub & Associates is prepared to help you do so. Contact one of our experienced Lombard estate planning lawyers by calling 630-426-0196. We will help you create an estate plan that is fully customized to meet your unique needs so that you can be sure that your assets are protected and properly transferred to your chosen heirs.

Sources:

https://www.thebalance.com/what-is-portability-of-the-estate-tax-exemption-3505672

https://www.forbes.com/sites/ashleaebeling/2021/01/15/state-death-tax-changes-loom-where-not-to-die-in-2021/

https://www.kiplinger.com/slideshow/retirement/t021-s014-10-common-estate-planning-mistakes-to-avoid/index.html