Repeal or not - You Need an Estate Plan!

Posted over 4 years ago. Applies to Illinois, 1 helpful vote

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1

Do Not Delay Have Your Say!

You need an estate plan whether or not the estate tax (and GST) applies to you. Tax avoidance (or more accurately, minimizing the estate tax) is not the only reason to establish your estate plan. The primary focus of most estate plans is to determine how to distribute your assets. You need an estate plan to ensure your property, 401Ks, bank accounts are titled properly and your wishes are properly documented. Estate planning is especially important to avoid probate when you own real estate in more than one state.

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Do Not Let the State Distribute Your Estate!

If you do not have an estate plan, the state imposes its plan on you, and the state's succession statutes will determine how your assets are distributed. Take John Smith's case for example. John was married with three grown children. The oldest child worked with John in the family business. The youngest child was estranged from John and they had not talked in many years. John told his family he wanted to leave the business to the oldest child and he did not want to give anything to the youngest child. However, John died without an estate plan. The oldest child was forced to file a lawsuit to determine the ownership of the family business. The probate court applied the state statute, distributed 1/2 of John's assets (including the business) to his wife, and split the other 1/2 among all 3 children equally. The court's decision caused a huge rift in the family. With ownership of the business in the hands of feuding family members, the business failed and closed its doors within months.

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Rule From the Grave.

Perhaps one of the most powerful tools an estate plan can provide is the peace of mind that your hopes and goals for your children will be relevant after you are gone. By transferring your assets through a trust, rather than outright, you can provide substantial limitations on the distributions from the trust. Your lawyer can help craft provisions that link distributions from the trust to certain requirements or goals you wish to impose. For example, a trust could prohibit or limit distributions to a beneficiary until they reach a certain age or obtain a college degree. On the other hand, the trust can also provide a beneficiary with the right to withdraw funds from to help them with their education, pay for a wedding a house or open a business.

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Protect Your Family.

With an estate plan, you can also provide substantial protections to your surviving spouse, your children and the other beneficiaries of your trust. In general, debts and judgments against a trust beneficiary may not be satisfied from trust assets and a beneficiary cannot be forced to demand a distribution. The use of a trust is also effective in keeping the assets separate from a beneficiary's spouse; this reduces the likelihood of your assets ending up in the hands of a divorcing spouse.

5

Tell Them How to Do it Your Way!

If you have children who are minors, you need to establish who will care for them if you pass away. This may especially important if your child's other parent is remarried, absent, or otherwise ill-prepared to handle the responsibility of raising your children. Again, if you do not name guardians for your children, the state could appoint someone for them, particularly if your child receives an inheritance. A properly drafted estate plan will address who will be the guardian for your children. You can assign the responsibilities to one or more persons - i.e., one person can be responsible for the general welfare of your child, while another guardian can be solely responsible for their finances.

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Plot Your Own Fate and Avoid Probate!

Probate can be an expensive, time-consuming process, but with proper planning, it can be easily avoided. You probably have taken certain steps that can help you avoid probate, such as placing your home and bank accounts in joint ownership or providing for rights of survivor ship, and completing beneficiary designations for your 401K/IRA and insurance policies. These steps help avoid probate, but only to a certain degree. These steps often do not allow for more complex distributions. In addition, these steps only provide for limited distribution/access on your death, but do not address or offer any instruction on how you wish to be treated and cared for if you become disabled, incapacitated, or temporarily unable to make decisions for yourself. Worse yet, these steps may not offer your loved ones the access to your funds, accounts and other assets to pay for your care if you become incapacitated.

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Get a Plan!

An estate plan will document your wishes and protect your family. An estate plan will help you avoid probate and allow you to rule from the grave. So you need to create and take the actions to ensure your assets are properly titled. Contact an experienced estate planning attorney today!

Additional Resources

At Griffith & Jacobson, LLC, we provide affordable estate planning and probate services. To schedule an appointment with one of our estate planners or probate lawyers, please contact Arieh M. Flemenbaum at info@gjlaw.com or call him at 312-236-8110. For more information on Arieh M. Flemenbaum and the other estate planning lawyers at Griffith & Jacobson, LLC, please visit our website at http://www.GJLaw.com/

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