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Estate Planning FAQs

Estate Planning FAQs

There is considerable confusion and misconceptions surrounding the topic of estate planning. You will want the help of an experienced Illinois and Indiana business lawyer when you have estate planning needs that you want to fulfill.

Spagnolo & Hoeksema, LLC helps clients in numerous communities throughout Illinois and Indiana with all kinds of estate planning issues. We can answer all of the questions you might have and create a plan that achieves your goals. Read here for answers to a few of the most commonly asked questions about estate planning.

Estate planning is the process of making legal arrangements to manage and transfer your property before your eventual death and any potential incapacity while you are still competent. During the process, provide for a guardian or the custodial care of any minor or adult dependent children, minimize taxes, decide who makes personal, medical, and financial decisions for you should you be unable to do so yourself, direct distribution of all your assets, and provide directions about the disposition of your remains. Estate planning will turn your wishes into reality with binding legal documents.

Many people mistakenly assume that estate plans are only for people with high income or that a will is not necessary because state law distributes property appropriately to family members. But failing to establish a valid estate plan means giving up important rights regarding how assets are allocated and who gets what. Whether items have real market value or sentimental meaning to your family, you’ll need an estate plan if you want to have a say in how they are distributed after your passing.

Yes. A detailed, well-crafted will allows you to explain maintaining control over your own health care decisions in the event of incapacity, as well as appointing a guardian or conservator for minor or special-needs children. Having an estate plan will protect your family from future conflict, including estate-related litigation, minimizes estate taxes, and ensures that all of your wishes are clear and legal.

The four documents that essentially make up a standard estate plan are a will, a Health Insurance Portability and Accountability Act (HIPAA) authorization, a power of attorney for health care, and a power of attorney for property or financial matters. In some cases, a fifth document will be a revocable living trust.

Death probate is a legal process of distributing a deceased person’s estate in which a judge will determine the validity of a will, should one exist, grant authority to a legal representative of the estate or an executor if a valid will exists, and preside over the process of liquidation and distribution of assets. The probate estate will eventually close, but probate can be a complicated ordeal in some cases and a mere formality in others.

Living probate, which is also known as guardianship or conservatorship, involves people who are or are alleged to be incapable of handling their own assets. Durable powers of attorney for property and revocable trusts will help minimize or totally avoid any legal stress of transitioning from full capacity to incapacity.

For most people, the strongest way to avoid the probate process upon death is to have a fully-funded revocable living trust. When you place all of your assets in a revocable living trust, you can use them any time during your life in any way you want. After you die, the assets in the revocable living trust will pass along to your beneficiaries with ease. Trusts will not die, but they do cease to exist upon achievement of full outright distribution, or there are no longer any assets.

You can also avoid probate regarding a financial account, retirement plan, or insurance policy by naming beneficiaries using a form from your financial institution. Owning assets in joint tenancy with rights of survivorship can also help avoid probate, but joint tenancies work best only in limited situations.

Simply put, a will only goes into effect after a person dies. A trust can benefit you both during your lifetime and after your death.

A will specifies the distribution of all your individually owned assets after you die, names an executor to administer the estate, and a guardian for any minor children. A revocable living trust may manage and distribute your property before and after your death.

A testamentary trust is one that only goes into effect through probate after death. Both wills and revocable living trusts can provide for testamentary trusts to control assets following a death. A living trust is a trust a person creates during their lifetime and can either distribute its assets to other beneficiaries upon death or morph into a testamentary trust to further control the distribution of assets to beneficiaries.

The primary difference is that you can change or rescind a revocable living trust following its creation, and you must give up control over assets owned by an irrevocable living trust.

A revocable living trust becomes irrevocable upon death, though upon death, both revocable and irrevocable trusts may either distribute assets outright to beneficiaries or continue to control them via testamentary trust provisions.

If you are now considering creating an estate plan, do not try to handle everything on your own. Make sure you are working with a skilled Illinois and Indiana estate planning lawyer who can listen to all of your needs and work to accomplish all of your goals.

Spagnolo & Hoeksema, LLC invests heavily in estate planning needs and can take you through the entire process of creating an estate plan on your own time. Call us or contact us online to request a consultation so we can discuss what we can do for you.

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