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Lombard estate planning lawyerIf you asked your children and grandchildren how they think you should divide your assets in your estate plan, you will almost certainly get many different answers. Some of your family might suggest dividing everything equally—most likely without any idea of how to figure out what constitutes “equally.” Others might defer to you entirely since after all, it is your property that is being discussed.

Ironically, the people in your life who say that you should do what you want with your estate plan are likely to be the ones who get upset when they realize they did not receive the inheritance they expected upon your death. Fortunately, an experienced estate planning lawyer can provide the guidance you need to stop family fights about your estate plan before they even begin.

Decide on Your Priorities

According to the law in Illinois, you absolutely have the right to do whatever you wish with the assets and property that comprise your estate. However, it is a good idea for you to at least think about how your decisions are likely going to affect your surviving family members. You may reach the conclusion that you do not care who you upset with your choices since you will not be around to hear about it. Again, you have that right. On the other hand, it may be more important for you to take steps to promote family unity and stable relationships in the wake of your passing. There is a good chance that your estate planning choices could affect your family positively or negatively after your death. You should choose wisely.

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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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Lombard estate planning lawyerWhen considering estate planning, it is wise to have some of your assets set aside as liquid assets. Liquid assets are easily turned into cash, the most obvious form being a checking or savings account. Mutual funds, stocks, and money market assets are also considered to be liquid. Non-liquid assets include physical property, which can take months to sell, or ownership in a company.

Immediate Access to Liquid Funds After Your Death

There are specific expenses that will come up very quickly after your death and your survivors may or may not be prepared to pay for these costs without using the funds from your estate. These costs may include:

  • Funeral and Burial Costs - According to Lincoln Heritage Funeral Advantage, the average funeral costs between $7,000 and $12,000. Even a cremation can cost $6,000 to $7,000. 

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Lombard estate planning lawyerWith coronavirus hitting the United States hard, many people are realizing the importance of estate planning. Not only are people worried about their financial future, but they are also concerned about what would happen if they became gravely ill from COVID-19. Luckily, Governor Pritzker determined at the beginning of the pandemic that legal services were still an essential business in Illinois. There is no better time to consider what will happen to your assets after death. Moreover, it is extremely important to get your affairs in order so that your children and grandchildren are properly taken care of.

What Happens to the Home?

Having a will and testament is not enough to keep your property out of probate, which is a long and costly process. Furthermore, if you do not designate beneficiaries and complete the proper legal paperwork to transfer your property after your death, it is possible that any family members who live with you could lose their home. One way to ensure your family stays in your home after your death is by setting up a transfer on death instrument which allows you to designate a beneficiary who will receive interest on the property and avoid probate. Other options include creating a living trust, joint tenancy, or life estate. A knowledgeable estate planning attorney can guide you through which option is best for you and your family.

Thinking About Your Medical Care

At the beginning of the pandemic many patients who were seriously ill were being sedated and put on ventilators to help their breathing. At this point, patients are no longer coherent to make their own medical decisions. According to NextGen Wealth, 80 percent of terminally ill patients do not want to receive intensive care at the end of their lives, yet fewer than 50 percent of terminally ill patients have an advanced care directive that would prevent them from receiving such unwanted care. Other documents that help determine what medical care you will receive include a do-not-resuscitate (DNR) form and a HIPAA authorization form. Designating a medical power of attorney allows another person to make medical decisions on your behalf if you become unable to do so yourself.

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Wheaton estate planning lawyerGeneration-skipping trusts, also known as dynasty trusts, are a way of avoiding estate taxes on an individual’s property and assets after death. It is a legally binding agreement that skips the children’s generation and leaves the inheritance to the grantor’s grandchildren to avoid an estate being taxed twice. With a generation-skipping trust, the children can still access the funds to pay for education, health, maintenance, and support, but upon their death, it automatically goes to their children. Generation-skipping trusts are a type of irrevocable trust, which means they cannot be changed or canceled. For this reason, it is wise to speak with a knowledgeable estate planning attorney who can assist in creating the trust before attempting to do so yourself.

Who Can Be the Beneficiaries?

The fact that this type of trust is called a generation-skipping trust leads many people to believe that the only beneficiaries can be grandchildren. However, the trust can be set up for anyone who is 37.5 years younger than the grantor. If the beneficiary is not a relative, he or she is called a “skip-person.” According to Internal Revenue Code 2651, if the parents die before the grandchild, then the grandchild moves into his or her parent’s place in line and a generation-skipping trust is no longer applicable to them. 

Tax Exemptions Associated with a Generation-Skipping Trust

According to Forbes, the Internal Revenue Service (IRS) announced the estate and gift tax exemption is $11.58 million per individual and $23.16 million per couple for 2020. Any estate worth more than these exemption amounts will be taxed at 40 percent federally. The Tax Cuts and Jobs Act, which went into effect in 2018, nearly doubled the exemption amounts. This act is set to expire at the end of 2025, at which point Congress will need to renew it for the exemptions to remain as large as they have been. 

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