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Lombard IL living trust attorneyMany people associate estate planning with death, and as a result, they often miss out on a truly valuable instrument of asset protection and financial management during their lifetime. A great place to begin learning about and utilizing estate planning is what is known as a “living trust.” This estate planning resource can allow you greater control over the transfer of your assets to your loved ones when the time is right through a mechanism that bypasses the time and expense of probate. To begin benefitting from estate planning, whether through a living trust, a will, or other tools, work with an experienced Illinois estate planning attorney.

Functions of a Living Trust

Unlike a will or a testamentary trust, which become effective only upon your death, a living trust can become effective while you are living. For many, a primary reason to create a living trust is to protect assets from the probate process. This form of lawful asset protection is accomplished when legal ownership of the assets is transferred from you—the “grantor”—to the trust under the control of a “trustee.” The trustee holds the assets in trust for those you who have selected to benefit from them—the “beneficiaries”.

Importantly, the law even allows you to be named as the trustee of your own living trust, which permits you to retain full control of the assets held in the trust during your lifetime. You have the ability to add or remove assets, modify the terms of the trust, or revoke the trust as you see fit. It is also important to name a successor trustee who will take over management of the trust assets in the event of your death or incapacitation. After your death, the assets can then be distributed to your named beneficiaries according to your wishes.

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Wheaton estate planning attorney

When you are setting up your Illinois estate plan, it is important to consider more than just the laws that exist today. It is also a good idea to plan accordingly for rising interest rates. Of course, it is impossible to predict the future. However, there are some wealth-transfer strategies that could minimize the impact of estate taxes while also offering some additional tax breaks to trustees later on down the road.

Using Intra Family Loans

Some families opt to provide an intra family loan to their adult children, or they may transfer a promising investment to pass down an inheritance. Paired with a promissory note that requires the adult child to pay interest, the net returns of these investments are a tax-free transfer of wealth.

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DuPage County estate planning attorney wills and trusts

When a married person decides to develop an estate plan, the person’s spouse will almost always be involved in the process. But, what happens if you are ready to start making a plan for the future and your spouse is not? You know your spouse better than just about anyone else does, so you probably realize that nagging him or her about it will probably not work. Begging or threatening is not likely to be successful either. There are, however, some things you can do to start the estate planning process despite your spouse’s reluctance. In doing so, you might just be able to convince your spouse that there is no time like the present to plan for what lies ahead.

Start On Your Own

Obviously, it would be best for everyone involved if your spouse decided to get on board before you start your estate plan, but if he or she continues to refuse, you should look for the things that you can do by yourself. For example, you can draft a will that addresses the assets that you own and specifies what will happen to them upon your death. If your solely owned assets are substantial, you might consider working with an attorney to create various types of trusts as well. Additionally, you can appoint a power of attorney for health care or property without your spouse’s input.
At this stage, you should also compile a list of your joint accounts and investments. If you outlive your spouse, there is a good chance that you will be responsible for these assets—especially if your partner never makes an estate plan. This will also be helpful to your heirs and loved ones if you and your spouse were to both die within a short period of time.

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Arlington Heights family law attorney estate planning

Make no mistake about it, estate planning is not just for the excessively wealthy. Anyone—even those with smaller estates—can have their assets eaten up by various types of taxes and other obligations, especially if the items being passed down have appreciated greatly since they were acquired. However, there are some solutions that could allow you to keep more of your money within your family regardless of the current tax laws.

Tip #1: Check and Update Beneficiaries Frequently

It is surprising just how many people end up having no beneficiary or a previous spouse listed on life insurance policies, investment accounts, and even their wills. To an extent, it is understandable—life is busy, things change often, and before you know it, years have passed and you still have not gotten around to updating your beneficiaries.

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Arlington Heights estate planning attorney

A marriage can have a significant impact on your estate plan. Married couples generally create an estate plan together— all or most of the marital assets are typically passed onto the surviving spouse. Only when he or she passes does the estate plan take effect. However, this is not always the case, particularly if one of the spouses has children from a previous marriage, or if there is a large age difference between the spouses. Moreover, if you are in the middle of a separation or a divorce, which can take over one year to finalize in many cases, it can have a significant impact on how you should handle your estate planning. 

How Marriage Impacts Estate Planning

Marriage makes it easier for you to leave assets to your spouse after death. Even if you fail to do any estate planning or create a will, Illinois intestate succession states that a spouse inherits all of the intestate property. If there are children, then the intestate property is split between the spouse and children 50/50.  

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