An estate plan allows you to provide for your loved ones after you pass
The Next Avenue website notes that, incredibly, some 51 percent of Americans ages 55 to 64 do not have wills. Moreover, approximately 62 percent of those ages 45 to 54 have not taken the time to execute a will. Those who die without a will forfeit the right to decide who they want to inherit their money and assets and who they desire to be the executor of their estate. Illinois residents who pass without having executed a will end up having their money and other assets pass to their closest relatives pursuant to the Illinois laws governing intestate succession. Conceivably, portions of one’s estate could pass to relatives they barely knew or-perhaps worse-that they fervently disliked. Having an estate plan in place avoids this scenario.
Estate planning is the process of analyzing a person’s objectives for the disposition of his or her property after passing and then putting into place a plan-such as a will or trust-designed to accomplish those specific objectives. The American Bar Association observes that, by taking the time necessary to craft an estate plan, you will be able to:
- Provide sufficient financial resources for your immediate family after you pass.
- Minimize expenses by keeping the cost of transferring property to beneficiaries as low as possible.
- Choose your own executor to handle your estate.
- Ease the strain on your family by planning your own funeral arrangements.
- Help a favorite cause by leaving money to religious, educational or other charitable causes.
- Provide for people who need help and guidance such as an elderly parent or a disabled child.
In addition, estate planning encompasses the execution of advance directives which would go into effect in the event of your mental or physical incapacity. According to the State of Illinois Department of Human Services, Illinois has these advance directives: (1) a health care power of attorney; (2) a living will; and (3) a mental health treatment preference declaration. These documents let you decide, in advance, precisely how you want your medical decisions to be made in the future if you are no longer able to make them for yourself.
Fox Business News offers the following four suggestions as to how to begin the process of estate planning. First, before executing a will or trust, take an inventory of your assets and liabilities. List your real estate, cars, jewelry, artwork and other physical assets. Add to the list information pertaining to your bank and brokerage accounts, insurance policies and any pensions you are entitled to receive.
Second, define and refine your estate planning goals. Specifically, you need to determine who you want your assets distributed to and in what proportion.
Third, you need to decide upon: (1) the person you want to be the executor of your estate; (2) the person you desire to make medical decisions on your behalf if you become incapacitated; (3) the person you trust to make financial decisions on your behalf if you become incapacitated; and (4) the person you wish to nominate to be the guardian of your minor children. Obviously, these people need to be dependable, honest and trustworthy individuals.
Fourth, it is advised that you meet with an experienced attorney to prepare your estate plan. An attorney can review your objectives and explain the tools-wills, trusts, beneficiary designations, etc.-that you can use to help accomplish your estate planning goals.
Seek legal help
If you are concerned about the disposition of your money and property after you pass you should contact an Illinois attorney with experience in estate planning as soon as possible. It is tempting to use the many forms available on the Internet instead of seeking the advice of an attorney. But the role of the attorney is to point out the many pitfalls that might not be apparent to you such as gifts to children from a prior marriage, inadvertent gifts to minors or people with disabilities, the overuse of beneficiaries so that the executor does not have the cash to administer the estate and identifying persons who should not be responsible for your finances or health if you are incapacitated.