Estate Planning

What is Estate Planning?

If you are reading this, chances are you have questions and concerns about what will happen after you die.  Who will receive your assets?  Who will take care of your minor children or disabled relatives?  How fast can your family access assets to provide for their needs?  Estate planning covers this and much more.

Yet, many people believe that estate planning is only for wealthy individuals and affluent families. This is a common misconception. The reality is that nearly everyone can benefit from an estate plan.

Estate planning is the process of making legal arrangements during your lifetime regarding the management, use and transfer of property during periods of disability and upon your death. It can also include naming guardians for minor children, providing for family members with special needs, minimization of taxes and asset protection strategies.

Our clients often express surprise after our initial consultation (yes, it’s free) as to the number of issues they never even considered.  In many respects, an estate plan can be as simple or complex as the needs and wants of the individual. But complex needs and wants are no excuse for putting off sound planning.  We enjoy taking a seemingly daunting and confusing process and making it easy for our clients to plan thoroughly.  And plan you must or the State of Illinois will plan for you (more on this below).

Common Estate Planning Objectives

While individual circumstances vary, there are many common estate planning objectives that our clients typically share. These include:

• Instructions for your care if you become mentally or physically disabled.
• Avoiding the need (and expense) of a legal guardianship if you become legally incompetent.
• Control over personal health care decisions involving treatments, organ donation, and end-of-life care.
• Timely and organized distribution of your family heirlooms, jewelry and other valuables.
• Minimizing disputes and contention among family members at your death.
• Naming a guardian for minor children and adult dependent children.
• Providing resources for family members with special needs, without disrupting their continued eligibility for government benefits.
• Providing for loved ones who might be irresponsible with money or who may need protection (now or in the future) from creditors or asset division in divorce.
• Planning for the transfer of your business at your retirement, disability, or death.
• Minimizing taxes, court costs and unnecessary legal fees while maximizing your privacy.

Common Estate Planning Documents

There are a variety of estate planning options and strategies that may be employed depending on your particular needs, circumstances, and goals. Our estate planning attorneys can guide you through the many options to help you create and implement a customized plan for your unique situation. An estate plan typically includes one or more of the following documents:

• Will – A formal document that becomes operative at your death and controls (i) the disposition of assets to named beneficiaries; (ii) the nomination of guardians of minor children and adult dependent children; and, (iii) the selection of an executor to carry out your wishes.

• Living Trust – A legal document that is effective during your lifetime and after your death that controls how trust assets are to be used during periods of your disability and after your passing. Generally speaking, assets held in a living trust can pass after your death to or for the benefit of your family outside of probate court involvement. Avoiding probate can save an estate thousands of dollars in legal fees and court costs. In addition, assets passing to or for the benefit of a beneficiary through a living trust can be shielded from the beneficiary’s creditors. If the estate is large enough to incur tax liability, the use of a living trust can allow for the taxes to be deferred until the death of the surviving spouse. A trust-centered plan can be more expensive than a will-centered plan; but considering the numerous benefits, many of our clients consider it to be a bargain.

• Power of Attorney for Property – A legal document where you, as the “principal,” name an “agent” to make and carry out financial decisions for you during your lifetime.

• Power of Attorney for Health Care – A legal document where you, as the “principal,” name an “agent” who is authorized to make health care related decisions for you if you are unable to make such decisions on your own.

• HIPAA Authorization – A legal document that allows you to share protected medical information with family or friends. For example, a HIPAA Authorization can be used to allow your family to quickly inquire about your medical condition in an emergency situation.

Although less common, an estate plan can also include prenuptial agreements, buy/sell and shareholder agreements for business owners, and irrevocable trusts to hold life insurance, retirement accounts and other assets. Our estate planning attorneys will take time to understand your goals and unique situation before offering advice on how to structure your plan.

The Risk of Not Having an Estate Plan

Some individuals delay estate planning because they think that the size of their estate does not warrant an estate plan. Others believe that they are too young, too healthy or simply too busy to bother with an estate plan. Then, their family and friends have to pick up the pieces when something unexpected happens to them.

Illinois law contains a series of “default rules” that will govern your assets and estate if you do not have a valid estate plan. These default rules (which are sometimes called rules of “intestacy”) may conflict with what you would have wanted. For example:

• During your disability:  If your name is on the title of your assets and you are unable to manage your affairs due to mental or physical incapacity, your family may need to petition a court to have a legal guardian named. As a result, a court (and not your family) will control how your assets are used to care for you and who will be named as your legal guardian. Guardianship proceedings can be very expensive and often create a ready forum for the public airing of family grievances and disagreements. In addition, a legal guardianship can be difficult and expensive to terminate, even if you recover. In many cases, however, the need for a legal guardianship can be minimized or removed through the use of a living trust.

• At your death:  If you die without an estate plan, your assets will be distributed according to the probate laws in your state. In many states, including Illinois, if you are married and have children, your spouse and children will each receive a share. That means your spouse could receive only a fraction of your total estate, which may not be enough to live on. Assets passing to your legal heirs through intestacy will not be shielded from their creditors. In addition, if both parents die (e.g., in a car accident), a court will appoint a legal guardian for your minor children—without taking into account your wishes. These risks (and others) can be avoided through the use of a valid will and/or living trust.

Cost and Expense

Estate planning does not have to be expensive. If you don’t think you can afford a comprehensive estate plan now, start with what you can afford. It may be that, for a young family or unmarried adult, a simple will (naming guardians for minor children), term life insurance and powers of attorney documents are all that is needed. Then, as your needs change and your financial situation improves, you can update your estate plan to include asset protection and probate avoidance strategies through the use of a living trust. In other words, our estate planning attorneys can guide you through the many options to help you design and implement a customized plan for your unique situation and budget.

If you already have an estate plan in place, we recommend that you review your estate planning documents from time to time to ensure that they continue to address your needs, circumstances and goals. Your estate plan should be an ongoing process and not a one-time event. For example, you may consider reviewing and possibly updating your existing estate planning documents when:

• Having a new child or grandchild;
• Getting married or divorced;
• Changing jobs or retiring;
• Selling a business;
• Dealing with an illness, disability or death of a spouse;
• Planning for the education or special needs of a child or grandchild;
• Experiencing a substantial change in net worth;
• Receiving an inheritance from a family member of friend;
• Moving to another state;
• Updating the list of individuals to serve as guardians, agents, executors and successor trustees in your existing documents; or
• Learning of any federal and state tax law changes.

How to Get Started

The best way to start the process is to call us at (630) 852-2529 and schedule a no-cost, no- obligation initial consultation with one of our estate planning attorneys. During the meeting, the attorney will discuss your individual goals and objectives and explain the many options available to you. Our overarching goal is to help you understand all of your options and feel confident and comfortable with how your plan is designed. This is done by explaining complex legal principles and strategies in plain, easy to understand terms. In most cases, at the conclusion of the meeting, the attorney is able to quote a flat fee for the preparation of documents that meet your individual needs, priorities and budget. At that point, it is up to you if you want to move forward—no pressure.

Prior to the no-cost, no-obligation initial consultation, we recommend that you complete our standard Estate Planning Questionnaire, and send it to us along with a copy of any preexisting estate planning documents. The attorney will review this information in preparation for the meeting. Of course, you are welcome to simply bring the questionnaire with you to the meeting. Please also bring a list of your assets, including estimated values, how they are titled and if they are subject to any restrictions on transfer.

If you have any questions, please feel free to call us. We look forward to working with you.

Disclaimer

The material on this website has been prepared by Lyons Law Group, LLC and is intended to be a discussion of general estate planning principles and for informational purposes only. It is not intended to be legal advice with respect to any particular situation and is not a substitute for obtaining specific legal advice from an attorney.

Your receipt of the information on this website is not intended to create, and receipt does not constitute, a contract for representation. Likewise, your completion of the Estate Planning Questionnaire—whether or not it discloses confidential information and is sent to our office—does not initiate an attorney-client relationship. You will become a client of Lyons Law Group, LLC only if and when you sign a retainer agreement setting forth the scope of the law firm’s engagement, the fee arrangement, and other relevant matters.

Our estate planning attorneys focus on the preparation of wills, trusts, powers of attorney and related documents for clients in Illinois.