Estate Planning Articles
Estate Planning Articles
- IT IS IMPORTANT TO MAKE QUALITY OF LIFE DECISIONS
- HOW LAND TRUSTS BENEFIT OWNERS
- NEW CONCERNS ABOUT ESTATE PLANNING
- WHO NEEDS TO DO ESTATE PLANNING?
- HOW TO KEEP GROUP LIFE INSURANCE OUT OF YOUR ESTATE
- ARE YOUR BENEFICIARY DESIGNATIONS UP-TO-DATE?
- REVOCABLE LIVING TRUST PROTECTS SPOUSE’S ESTATE FROM THE STATE
IT IS IMPORTANT TO MAKE QUALITY OF LIFE DECISIONS
When long-term illness or the debilitating effects of aging strike, patients, and family members must often make difficult decisions. A law went into effect on January 1, 2001, which provides a clear path for people to make quality of life decisions. The law provides for an orange “Do Not Resuscitate Order” bearing the seal of the Illinois Department of Public Health.
As a result of this law, a completed form is required in the event emergency medical personnel are called to treat anyone whose long-term prognosis is poor. In the past, a doctor’s order on a prescription pad or letterhead was acceptable in such cases. The law requires completion of the form in addition to any last directives such as a living will or a power-of-attorney for health care.
The form requires the name and signature of the patient and physician, plus the names, signatures and addresses of two witnesses. If the patient lacks decision-making capability, the form may be completed by someone holding a power-of-attorney for health care. Forms are available from hospitals, physicians, and most fire departments.
HOW LAND TRUSTS BENEFIT OWNERS
By a simple procedure a lawyer can change a client’s interest in real estate into an interest in personal property. This device, called a Land Trust, allows greater flexibility in transferring, owning, and passing property on without giving up any of the rights and conveniences of property ownership. There are Estate Planning advantages too.
A Land Trust allows the owners to pass property from one generation to the next without going through probate. This cuts the cost of dying and the possibility of litigation since the property does not pass by a Will that can be contested. For estate planning purposes a Land Trust has tremendous advantage over any other form of real estate ownership.
One can provide for many owners while having the decisions regarding buying, selling, and other uses of the property all in the person chosen through a Trust Agreement. Joint Tenancy often cannot accomplish the desired line of succession, but in a Land Trust the arrangement possibilities are almost limitless.
A Trust Department of a title company, you as Trustee or a bank holds legal title to the property while the owner holds the beneficial interest or the right to enjoyment based upon written instructions given to the Trustee. Ownership of the property can be kept private. The ownership as shown at the Recorder’s office is a bank, trust company, or you as Trustee. The Trustee will not reveal the beneficial owners unless subpoenaed or court ordered. If for some reason one doesn’t want title information to be a matter of public record, a Land Trust will serve your purpose.
If you are interested in transferring your property into a land trust, consult this office for further information.
Since the terrorist attack on September 11 at the World Trade Center, many individuals, young married couples and seniors are thinking that it is necessary to do estate planning. Although a will is an important and helpful estate-planning tool, it will not prevent your estate from going through probate court proceedings. An estate planning tool, which can deliver your assets to your heirs after you die, without probate, is a living trust.
A revocable living trust allows a person to transfer ownership of his or her assets to another entity the trust. The living trust is an ideal arrangement for the management of assets, and it keeps them within a safe place. Your assets always remain totally within your control as long as you are capable of making your own decisions. The best possible scenario is to have a fully funded trust with a “pour-over” will as a backup, which essentially “pours-over” to the trust any assets that you may have forgotten to put into the trust.
The most important step you can take right now is to get your affairs in order. It is unwise to think that nothing can happen to you, so you can wait a few years to make estate-planning decisions. In these uncertain times, that is not the case. Estate planning will help your spouse, other family members and friends feel confident that your estate will be managed as you desire. Please consult with us to help plan your estate.
WHO NEEDS TO DO ESTATE PLANNING?
Please take a moment and take this true or false quiz:
- I do not need a will if I have only a few assets.
- If I have a will, my estate is spared the time and expense of probate.
If you answered “false” to both statements, you are on your way to planning your estate. A will is an important and helpful estate-planning tool, but it will not prevent your estate from going through probate court proceedings. An estate planning tool, which can deliver your assets to your heirs after you die, without probate, is a living trust.
A revocable living trust allows a person to transfer ownership of his or her assets to another entity the trust. The living trust is an ideal arrangement for the management of assets, and it keeps them within a safe place. Your assets always remain totally within your control as long as you are capable of making your own decisions. The best possible scenario is to have a fully funded trust with a “pour-over” will as a backup, which essentially “pours over” to the trust any assets not specifically covered by it after your death.
The most important step you can take is to get your affairs in order now. This will help your spouse and other family members and friends feel confident that your estate will be managed as you desire. Please consult with us to help plan your estate.
HOW TO KEEP GROUP LIFE INSURANCE OUT OF YOUR ESTATE
Many employees receive life insurance coverage through their employment. To make sure your group life insurance does not become subject to estate tax, all of your ownership rights in the policy must be assigned to your chosen beneficiary as soon as possible, provided assignment is permissible under state law and under the policy. An assignment form can be obtained from your employer or the insurance company. The assignment must transfer all of your rights in the group policy, including the rights to choose beneficiaries. Life insurance proceeds will not be includable in your estate if (1) you have given up all rights of ownership in the policy at least three years before your death, and (2) the proceeds are not payable to your estate.
The assignment form should be sent to the insurance company for its endorsement. The insurance certificate should be given to the new owner for safekeeping. If an assignment form is not available, one can be prepared by your attorneys.
ARE YOUR BENEFICIARY DESIGNATIONS UP-TO-DATE?
Like most people, it has probably been awhile since you last updated the beneficiary designations on your IRAs and employer-sponsored retirement plan. Regardless of the instructions in your will, these assets will pass directly to your assigned beneficiary in the event of your death. So, at the start of this new year, a quick review is well worth your time.
A number of life-changing events could require a change in beneficiary such as the birth of a child, marriage, a divorce, or a blending of families. If you have neglected to name a beneficiary at all or if your beneficiary passes away before you do, the institution that manages your account may liquidate the assets and add them to your estate, resulting in potential probate and income taxes. Therefore, it pays to name a secondary beneficiary for added protection.
Due to recent tax law changes, you can set up your IRA account as multigenerational or “stretch IRA”, resulting in extending the asset’s tax-deferred status into the next generation. When you pass away, your child or grandchild as the beneficiary, receives distributions from the account in increments over the course of his or her lifetime.
REVOCABLE LIVING TRUST PROTECTS SPOUSE’S ESTATE FROM THE STATE
The Illinois Supreme Court has ruled that the Illinois Department of Healthcare and Family Services can’t seek reimbursement for long-term care from a surviving spouse’s estate. This ruling means that married couples should consider a revocable living trust as an attractive estate-planning tool to protect their assets such as a home, cars, and retirement plans. (This ruling the court determined does not apply to the spouse receiving Medicaid).