Most people have heard of a will, although few people fully understand what a will is used for. If you are planning your estate, this is something essential for you to know. You may have heard that there are alternatives to a will, and this is true. However, it is recommended that everyone has a will and the alternatives are in addition to it, rather than instead of it. Learn what a will is and what it does.
What a Will Does
A will is a legal document that describes what your wishes are for after your death. Its primary functions are:
- Distributing your possessions – The most famous and essential function of your will is to determine who will receive your possessions. You can divide your estate up and choose who will receive each individual item. There are only a few limitations on how you distribute your possessions.
- Naming an executor – Your will needs to have an executor. This is someone who will ensure your wishes are carried out correctly. You can name the executor of your will in the will itself. If you do not name an executor, the courts will assign one instead, which will lengthen the probate process.
- Naming a guardian for your children – If you have children who are still minors, you need to designate who will become their guardian. You should also designate who would become the guardian in the event that both you and your spouse die at the same time.
Many people do not realize that a will does more than simply designate who receives their estate. These other legal matters make it important to have one.
What a Will Does Not Do
It is important to know what your will cannot do. The biggest misconception is that a will can provide funeral instructions. A will cannot do this, although it can bring attention to a separate document that outlines your funeral instructions. This will ensure that your executor knows about it.
A will also cannot set conditions on your possessions. For example, if you wanted to leave your granddaughter college tuition, but only until she has finished college, your will would not be able to do that. You may want to consider setting up a trust instead, which can place any number and kind of conditions on your possessions that you desire.
The first step in setting up your will is speaking with a will lawyer in Chandler, AZ. A legal professional will be able to help you with every step in the process.
Thanks to Citadel Law Firm for their insight into estate planning and what a will is.Read More
Estate Planning Lawyer
If property goes to probate, then a judge determines how assets are distributed among your beneficiaries. Probate judges are experienced with this, but that doesn’t guarantee that they will make the right choices. Someone who appears to be the proper heir “on paper” may not be the person you would like to inherit your estate. Some considerations involved in the process include:
- Time: The probate process takes time. Mid-sized estates may take as many as two years to process in probate. If the judge’s decision is contested, it can take even more time. A small, uncontested estate may go through probate in just 18 months. However, if there are disputes, cases can take as much as ten years to complete. As the probate process drags out, legal fees stack up.
- Money: The probate process costs money. All the legal costs and those for the executors and attorneys eat into the estate. The heirs will be distributed what’s left.
- Privacy: Privacy is not guaranteed with probate. Both the assets and family information can become public record. As disputes heat up, family arguments and secrets could be revealed.
Alternatives to Probate
If you want to avoid the pitfalls mentioned above, there are alternatives to probate. Options that can ensure your heirs are not subject to the probate process include:
Revocable living trust: A revocable living trust holds the property via a trustee, so it is not counted toward the probate of the estate. Federal estate taxes must still be paid. However, the estate will transfer to the chosen heir(s) quickly. To create a revocable living trust, the estate owner must create a trust document and select the beneficiaries that they want to inherit the trust.
Joint ownership of property: If another person is listed on the title of the property, then it goes to that other person automatically after death.
Pay-on-death accounts: Retirement and bank accounts can be designated pay-on-death accounts by filling out a single form. The form lists the beneficiary the estate owner wants to have the funds. These automatically transfer to the beneficiary upon death.
Living trust: A living trust is similar to a will. It distributes your assets upon death but skips the probate process. Assets are placed in a trust managed by a trustee.
Joint tenancy with right of survivorship: Joint ownership of property keeps the real estate out of probate. Anyone’s name can be added to the title. The estate will pass to the survivor.
If the state you live in allows it, tenancy by the entirety enables married couples to skip probate. The property may also be designated as a community property with a right of survivorship.
A Will is not Enough
Don’t assume that a will is sufficient to keep your estate out of probate. An attorney can help you create a concise estate plan that works around the probate process. Contact a lawyer for more information.
Small Business Lawyer Rolling Meadows, IL
As a small business owner, it’s important that you create a plan for the future to ensure that your loved ones are aware of your wishes when the time comes. Although the creation of a will and estate plan is often something that many may put off for another day, it is essential for a number of reasons:
- Clearly outlines your wishes so that loved ones are not left guessing
- Ensures that your business is able to thrive for years to come
- Mitigates the risk of familial conflict over your final wishes
- Gives you the power to choose how your assets should be distributed
- May reduce taxes on your assets
- Prevents your assets from ending up in the wrong hands
There are a number of reasons to stop putting off your will, especially if you own a business. Taking action by putting a plan together can provide you with not only peace of mind, but a clear plan that your family can refer to in the event you become incapacitated or pass away. Working with a lawyer who has experience in developing wills and business planning may be in your best interest so that nothing is left up for discussion.
What is Business Succession?
No matter how large or small your business is, developing a plan of business succession is key. A business succession plan requires that you make a number of both financial and logistical decisions regarding your business. You will start by identifying the party who will be taking over your business. Following this, you will need to consult with a lawyer for help in putting your wishes into a document and developing your estate plan. This is because the sale of a business can be expensive when you consider the tax implications. You will want to make sure that you are able to smoothly transition ownership of your business in the best way possible. Options for succession that business owners may choose include:
- Leaving your business to an heir or someone in your family
- Selling to your business partner
- Allowing an employee to purchase the business
- Selling your business to an outside entity
Business succession is not just for your passing, it plans for your retirement so that you are able to smoothly transition away from your business. Beginning this process years ahead of time can ensure that you are able to move away from your business when you are ready to retire.
Making Sure That Nothing Is Left Out
There is much to consider when creating your will, especially when incorporating your business into the document. Because of this, you may be concerned that you will forget to include some key element to your plan. Working with an estate planning lawyer can be beneficial for a number of reasons, including:
- To help develop buy-sell agreements
- Outline a clear plan for who will run the business
- To consider tax implications that may arise for those who stand to inherit the business
- Help to avoid probate
- To protect your assets
- Prevent family from selling interests to those outside of the family
There are a number of benefits, many, you may have not considered. Don’t forget to incorporate your business into your final wishes, contact a small business lawyer in Rolling Meadows, IL from Bott & Associates, Ltd. today so that nothing is left out.Read More
Wills and Trusts Law Firm
When you die without a will, it’s called being intestate. Typically, if you don’t have a will, the estate will be adjudicated through probate court. A judge will appoint an executor to handle the details of your estate and present information to the court. Here are some of the pitfalls of not having a will.
You Don’t Decide Who Takes Care of Your Children
If you have minor children, on your death, the other parent will take care of your kids. If you are single and the other parent isn’t in the picture, then the court may appoint someone to take care of your children. Ideally, this person is family, but depending on the dynamics in your family, it might not be the best person or the one you would trust. To avoid this issue, name a guardian of your children in your will.
Your Assets Go to Your Heirs as Decided by State Laws
Without a will, your assets are distributed according to intestacy laws in the state where the property is located. Generally speaking, your spouse is your beneficiary, but it can be more complicated than that. If you have children with another person, your estate could be divided between your current spouse and your children. If you aren’t married, the state has laws that outline who inherits. First, it would look for children. Next, your living parents would be identified as beneficiaries, then siblings or nieces and nephews. If no relatives are found, the estate would probably go to the state.
If you are living with an unmarried partner, you might assume that your property would go to that person. Probate courts look for relatives who are married to you or related by blood. An unmarried partner would not qualify. This could leave your partner in the lurch. If you have a painting that you want to give to a friend, it wouldn’t happen. Avoid complications by naming beneficiaries in your will.
Your Assets Could Be Tied Up in Probate Court For a Long Time
If your relatives argue over who is your beneficiary, the real beneficiaries may never see any of your assets while the court tries to find a resolution. Probate court fees and expenses could take a chunk out of your estate. Your estate will have to go through probate if you have a will, but the court will have your wishes, making it easier to settle the estate. You can also name an executor to oversee your wishes.
Talk to a wills and trusts law firm in Ridgefield, CT today about a valid will to give you peace of mind when you die.
Thanks to Sweeney Legal, LLC for their insight into estate planning and what happens when you die without a will.Read More
Estate Planning Lawyer in Palatine, IL
You may have watched a scene depicted on a television show or in a movie that takes place after a funeral. People all gather at a reception in someone’s home, and the executor of the estate calls certain people into a study or extra room. There is a “reading of the will” at that time, and the implication is that the executor will be able to distribute assets to the inheritors after they are informed about the intentions of the deceased individual.
In reality, things do not work in this fashion. If you pass away with a last will in place, the executor or personal representative would be required to admit the will to probate. The administrator that you choose would take care of the hands-on tasks, and the court would provide supervision during the probate process.
Probate is in place for a couple of different reasons, but it is not necessarily a positive thing for people that are in line for inheritances.
One of the major drawbacks of probate from an inheritor’s perspective is the time factor. Even if there are no major complications, it will usually take nine months to a year for probate to run its course. No inheritances can be distributed during this process, and that can be a long time to wait.
There are also a number of different expenses that accumulate. These would include a filing fee, legal expenses, liquidation and appraisal charges, the executor’s remuneration, and other incidentals. All of the money that is spent during probate is essentially coming out of the pockets of the people that are named in the last will.
Privacy is lost during probate as well. It is a public proceeding, so anyone that is interested can access probate records to find out how you distributed your assets if you use a will. This can be disconcerting in a general sense, but this knowledge can potentially cause hard feelings among interested parties.
There are some asset transfer methods that are not subject to probate. In some cases, people will intentionally use these “easy answers” to avoid probate, and in others, it happens organically. However, unless you make informed decisions with the help of an estate planning attorney, negative consequences can come about.
With the above in mind, property that is held in joint tenancy can be transferred free of probate. So, if you were to add a joint tenant to the title or deed to your home, that individual would inherit the property after your passing, and the probate court would not be involved.
However, there are some potential problems with joint tenancy. When you add a joint tenant, this individual would own half of the property immediately. Therefore, if the person was to become the target of a lawsuit, the portion of the property that is owned by the joint tenant would be in play. The co-owner would also have to be cooperative in order for you to be able to sell the property.
Payable on death accounts can be opened at banks and some brokerages. If you start a payable on death or transfer on death account, you add a beneficiary. After your passing, this individual would assume ownership of assets that remain in the account, and the probate process would not be a factor.
This may sound like a simple solution, but there are limitations involved if you take this course of action. You could add multiple beneficiaries, but you would have to allow for equal distribution of the assets. This may not be consistent with your wishes, and what about the rest of your property?
An estate planning lawyer in Palatine, IL would say that the best way to avoid probate is to establish a revocable living trust. After you create and fund the trust, you can serve as the beneficiary and the trustee while you are living. In the document, you name successors to assume these roles after you pass away. When the time comes, the successor trustee would be empowered to distribute assets to the beneficiaries in accordance with your wishes outside of probate.
Contact Bott & Associates for their insight into estate planning and administration.Read More
Estate Planning Lawyer in Rolling Meadows, IL
The planning done before marriage is often as important as planning after marriage in assuring that a client’s estate planning wishes are carried out. Laws governing prenuptial agreements vary somewhat from state to state, but often the circumstances surrounding the drafting, execution, and administration of a prenuptial agreement are crucial to the effectiveness of the agreement.
The case of In re Estate of Ingmand, No. 1-357 / 00-1281 (Iowa App. 7/31/2001) involved a prenuptial agreement. Eugene and Frances Ingmand married on March 14, 1986. Eugene, a retired Arizona veterinarian, and Frances, a resident of Iowa, had known each other for years before their wedding. Eugene entered the marriage with over a half million dollars in assets. Frances’ net worth at the time of their marriage was less than $300,000. Because Eugene had assisted Frances with her finances before their marriage, Eugene was familiar with her finances. In contrast, Frances was not familiar with Eugene’s finances, other than the fact he was “comfortably well off.”
Days before their marriage, Eugene drove Frances to his attorney’s office after telling her they were going to procure their marriage license. Instead, Eugene’s attorney, after informing Frances that he was representing Eugene only, presented her with a prenuptial agreement that kept each party’s income and assets separate. Feeling uncomfortable and embarrassed at the prospect of people finding out that Eugene was conditioning their marriage on the execution of the prenuptial agreement, Frances signed the agreement without requesting to consult with her own attorney. She did not even read the document before signing it. Nor did she keep a copy of the executed document. When Eugene died a number of years later, Frances, as Eugene’s surviving spouse, filed an election to take against Eugene’s will. Eugene’s personal representative denied her election, arguing that it was precluded by the prenuptial agreement. The court held that the agreement was valid and that Frances would take nothing from Eugene’s estate.
In a second prenuptial agreement case, In re Estate of Hollett, No. 2002-346 (N.H. 9/26/2003), John and Erin Hollett married in 1990 after dating for six years. John was a successful real estate developer worth about six million dollars. He was about thirty years older than Erin, who had dropped out of high school and worked as a cashier and bartender.
Mr. Hollett’s attorneys hired a young, inexperienced attorney to represent the soon-to-be Mrs. Hollett with regard to a prenuptial agreement that was being presented to her days before the marriage. The young attorney recognized that the proposed agreement was not very favorable to his client and that the financial disclosure was very sketchy. Despite his inexperience, he was able to negotiate an agreement that guaranteed Erin one-sixth of her husband’s estate in the event of death or divorce. The prenup was signed by both parties on the morning of the wedding.
Mr. Hollett died ten years later, at which time Mrs. Hollett moved to have the agreement declared invalid, claiming she had signed it under duress. The New Hampshire courts held for her, citing the couple’s great disparity in education and finances and the hurried nature of the agreement’s execution.
In an unreported California case, a multi-millionaire oil and real estate investor married a woman decades younger than himself. She brought nothing into the marriage other than a small residence in rural Texas. The couple signed a prenuptial agreement prior to marriage, giving the new bride interests in several apartments worth about five million dollars, but retaining the bulk of husband’s assets as his separate property. Each party was well represented by separate legal counsel. During the marriage, husband acquired several new properties and started new business enterprises, giving wife varying ownership interests in them. When wife unexpectedly pre-deceased him years later, husband tried to invoke the prenuptial agreement against wife’s heirs. Despite finding the prenuptial to be a valid agreement, the court held that wife’s heirs had acquired ownership in many of husband’s properties and business enterprises because of his actions in contravention of the agreement throughout the marriage.
While a prenuptial agreement can be a vital part of an estate plan, improper drafting or administration, or the failure to fully disclose financial information or to obtain independent legal counsel before execution, can have disastrous consequences. An experienced estate planning lawyer in Rolling Meadows, IL, working together with family law professionals, can prevent this from happening.
Contact Bott & Associates for their insight into estate planning and prenuptial agreements.Read More
Estate Planning Lawyer Palatine, IL
Every time you turn on the news, it seems like there is a new scam making headlines.
By now, we’re all familiar with Bernie Madoff and his infamous Ponzi scheme. Many people have also heard about the “grandparent scam.” In this swindle, the scammer calls posing as the victim’s grandchild, claiming to be traveling in a foreign country and in distress. The scammer convinces the victim to wire them money. The “grandchild” hangs up, and the funds are gone forever.
One surprising area in which scams are becoming more common is estate planning. Each year, more people fall victim to unscrupulous and unqualified sellers of ineffective estate planning documents. Often, these scammers are door-to-door salesmen or telemarketers.
Would you recognize an estate planning scam if you saw one? Here’s how to make sure your or loved ones are never victims:
- Work with a qualified estate planning attorney. Be careful of websites that offer DIY wills. Estate planning is a complex area of law, and the rules vary from state to state. Only a licensed, experienced estate planning attorney is qualified to prepare an estate plan for you. Before you work with any estate planning professional, make sure he or she is licensed to practice law in your state. This is as simple as checking your state’s Bar (http://www.americanbar.org/groups/bar_services/resources/state_local_bar_associations.html) to ensure the person you want to work with is listed as an active member in good standing.
- Take your time. Legitimate estate planning attorneys understand when you need additional information about their services. This is especially true if you attend an estate planning seminar. Never feel pressured to buy products or services “on the spot” – and never, ever purchase a pre-printed Living Trust “kit.”
- Ask lots of questions. A qualified estate planning attorney has years of legal training and experience. He or she should be able to explain all of your planning options, as well as the potential outcomes for each option. What’s more, your attorney should be able to explain these things in language you can understand. Here’s a good rule of thumb: if you don’t understand what you’re signing, don’t sign it.
Finally, it pays to remember the old adage if it sounds too good to be true, it probably is. Someone who is unlicensed or unqualified might offer you a bargain-basement price, but what value are you really receiving? Too often, it is an estate plan that turns out to be ineffective or even counter to your wishes. What’s worse, your family might not even realize there is a problem until after your death, when it is too late to correct the mistake. By then, your life savings could have passed to unintended recipients, your estate could be on the hook for unnecessary taxes and fees, and your loved ones could find themselves in the midst of unnecessary confusion and conflict.
A qualified estate planning lawyer Palatine, IL turns to from Bott & Associates, LTD. will work with you to put a plan in place that will carry out your wishes and meet your family’s needs, without any nasty last-minute surprises.Read More
Estate Law Lawyer Rolling Meadows, IL
Consider all the planning a couple may do during the course of their lives: purchasing a home, building a business, starting a family – the list is endless. However, no one plans for a break-up. So what happens when there’s no longer a “happily ever after?” What will our finances, our emotions and even our future look like on the other side of divorce?
Not only must we rethink our immediate future, but there are also long-term plans that must be addressed. Specifically, our estate plans will need to be revised. The fact is, it’s difficult to look past the pain that’s felt in the moment, and looking towards the future may suddenly feel foreign.
But taking a proactive step in reducing the risks and going through the process of making important changes can help us feel more in control. Not to mention, there are many benefits that come from knowing those legalities are addressed. Here are a few ways to move toward those goals during a divorce from an estate planning perspective.
One of the most important changes you’ll make moving forward is changing the beneficiary designation on your retirement plan. Don’t forget that you’ll need to change the beneficiary on your actual retirement account, as many assume the only place these changes should be reflected is on their estate planning documents. The beneficiary on the retirement account takes precedence over anything you might have changed in your other legal documents.
Your powers of attorney–financial and medical–should be revised as well. Even if the divorce was mutual, odds are, you’ll want to name someone else to make medical and financial decisions on your behalf, should you become incapacitated. Your life insurance policy should also be reviewed.
Just as you changed your other joint accounts, such as credit cards and bank accounts, any Trusts you established as a married couple will need to be amended.
You likely have a HIPAA authorization form in place, as well. These important documents are designed to protect your medical confidentiality while also preventing access to your information by others with no authorization, such as a former spouse. You’ll want to be sure these forms are also updated.
From a technological perspective, you should also change your PIN numbers associated with any of your financial accounts and change passwords to your online accounts. This is really sound advice regardless of the situation, but certainly if you’re going through a divorce.
Finally, remember that a bit of time spent with your estate planning attorney after a divorce can go a long way in shoring up the path towards retirement, whether you remarry or opt to remain single.
Divorce is overwhelming, frightening and sometimes exhausting. While those emotions will subside over time, it is both important and empowering to take control over aspects of the future you can make better in the meantime. A qualified estate law lawyer Rolling Meadows, IL offers at Bott & Associates, LTD. can help you reach those goals.Read More
Estate Planning Lawyer
You want to make sure that your wishes get carried out after your death. You crafted a will along with your attorney, and as such, you believe that it will stand the test of time. However, is there a chance that someone will be able to challenge the will upon your death? Can your children or even a former spouse try and get more than what you have set aside for them? While challenging a will is difficult and highly unusual, it does happen. Take a look at the conditions under which someone may try to challenge your will after you’ve departed.
Claims You Were Not of Sound Mind
One of the most famous legal clauses in most wills testifies that you are “of sound mind and body” and making the will as such. However, some people may try and prove that you were not at full mental capacity when the will was created, especially if it is drastically different then a previous version. This scenario typically happens when former heirs feel like they were unjustly removed from the will and attempt to prove that you were declining when you revised it. For this bid to be successful, there has to be evidence that your mental health was declining steadily before and after you executed the will. Some people who may be called on to testify include the treating physician and the attorney present at the time the will was executed.
Claims Someone Unduly Influenced You
Your heirs or former heirs may believe that someone coerced you into making changes to your will in the months leading up to your death. One example of this has to do with children who believe a step parent purposely manipulated you to cut them out of the will. This scenario occurs, and adult children can become outraged if a new spouse somehow inherits the estate whereas before they were to split it. The adult children must prove in court that the new spouse placed undue influence on you to get you to make the changes.
The Will Is Not Properly Executed
An administrative error could allow someone you deleted from your will to come in and take a share. If a will is not dated correctly or is missing a witness signature, the entire document may be ruled invalid. A previous will, if one exists, will then come back into play and take its place.
Make sure that the people you love get what you want them to after your death. Go to a wills attorney in O’Fallon, MO and have the appropriate documents drafted and executed.
Thanks to the Legacy Law Center for their insight into estate planning and challenging a will.Read More
Estate Law Lawyer Rolling Meadows, IL
More and more Americans are worried about long term care. With life expectancies being longer than expected, it is more and more difficult to pay for care in our senior years. People work so hard, sacrifice so much, to accumulate the nest egg that they believe will carry them for the rest of their lives. However, when a person is diagnosed with diseases such as Dementia, Alzheimer’s, Multiple Sclerosis, ALS, and other debilitating diseases, the panic revolves around who is going to take care of me, and how will I pay for it? The myth in many people’s minds is the State will take care of them. Unfortunately, that is not always the case. Below are the five things you need to know about Medicaid.
- Medicaid is a joint Federal and State program. Medicaid is primarily funded by the Federal government. But it is up to each state to administer the program. Some states supplement funding for Medicaid, and that is considered “Medicaid Expansion”. Each state has its own rules as to eligibility criteria and benefits. Some are easier to qualify for, and others are much more difficult. Therefore, it can be a consideration when discussing where to retire in the future.
- Medicare vs. Medicaid. Often people are confused as to why long-term care is not covered by Medicare. They often think that Medicare covers everything after reaching age 65. This is not true. Medicare only covers your health care needs, for illnesses, hospitalizations, etc. Once you are in a rehab facility after you are discharged from the hospital, Medicare may pay for some of your days in that facility, depending on how well you are improving during the rehabilitation process. Once you max out the days paid for by Medicare, typically 120 days, then it is up to you to pay for additional days in the facility.
- Medicaid has low income and asset limits. The Medicaid program uses both income and asset limits to determine eligibility. Typically for a single person, you can only have $2,000 in assets. The income limit is tied to the Federal Poverty level applicable to the household size and geographic area. If a person has assets beyond the $2,000, then you are forced to “spend down” the assets until you have reached the level.
- There is a 5 Year Look Back period. Often people think they can gift their assets to their children in order to qualify for Medicaid. What they don’t know is that there is a 5-year look back for qualification. Your application requires 5 years’ worth of financial statements to be reviewed by the State. If they see any transfers during such time, then you will be disqualified for Medicaid, or at least have a waiting period before being qualified. You can do Medicaid Planning prior to needing long term care, as long as the planning begins at least 5 years before the need.
- The State may recover your assets upon your death. The Medicaid Estate Recovery Program allows states to recover assets or place liens on real estate after your death, if Medicaid paid for your care during your life. So although your residence is typically an exempt asset for purposes of qualification, it can be taken away from your children, upon your death. Again, Medicaid Planning way ahead of the need, can help prevent this from happening.
Planning ahead is the key. Although estate planning with Wills and Trusts are very important, it’s even more important to start thinking about long term care. Seek a qualified estate law lawyer Rolling Meadows, IL trusts to discuss what options are right for you.
Contact Bott & Associates, Ltd. for their insight into estate planning and Medicaid.Read More
Trust Administration Lawyer Schaumburg, IL
As a parent, you often want to make sure that you treat your kids as equally as possible. If one child gets new sneakers, you make sure the other kids get new sneakers. If a child wants to go on a school trip out of town, you want to give the other children the same opportunity. When planning for inheritance, many parents are very adamant that all children receive the same share, no matter what, so there are no hard feelings. In most cases, that is a great plan. In certain circumstances, it would be more advisable to treat them a little bit differently.
- Spendthrift Child – If your adult child has a history of spending every last dollar, and then some, of their income and previous inheritances, you may want to think twice about giving that child too much money, too fast. The child may have a tendency to think that the money will never run out, so they go on to spend it in record time. You can always give them a certain amount, but have it be held in a trust for their benefit. Perhaps they receive a certain amount per year, like $20K per year, or 10% per year. Then at a certain age, like 65, he/she may request the balance. This allows the child to have some funds, but still have a nest egg growing in the trust for his/her retirement.
- Drug or Alcohol Addiction – With prescription drug addiction on the rise, you never know if your children have one right now, or have one in the future. If he/she receives an inheritance in full, in cash, he/she may just use most of it to increase their addiction. Generally parents are in denial that this would ever happen to their child, but unfortunately, anyone can be addicted fairly quickly and easily, just by one prescription of pain medication. The best way to tackle this issue is to keep a child’s inheritance in trust, and provide the trustee some discretion to withhold distributions if they suspect an addiction. This will hopefully give them the incentive to go to recovery, and get clean.
- Mental Health – Another issue on the rise today is mental health. Many people are being diagnosed with anxiety, depression, bipolar, schizophrenia and a whole host of issues. If your child already suffers from this now, or in the future, it is important to not give the inheritance too soon or too fast, because they are more likely to be “duped.” They may decide to trust the next person who shows them love and affection, and that person encourages them to hand over the money, or they may just get access to the funds on their own. To protect your children, keep the assets in trust, with the Trustee having the discretion to distribute. Therefore, the child will have funds to keep them in their standard of living, but will not have the ability to just hand over the funds to a predator.
- Ex In-Laws – When a couple walks down the aisle, the hope is always that they live happily ever after. Unfortunately, the statistics show that more than half of marriages fail and end in divorce. Perhaps you think your children have “perfect” marriages and would never end up that way. But what if they do? Would you want potentially half or all of the money you worked hard for, in the hands of your ex-son in law or ex-daughter-in-law? Most people do not. Once again, by putting your children’s inheritances in a Trust with the help of a trust administration lawyer Schaumburg, IL offers, it will be protected from any future divorces.
All of the above issues are sensitive subjects. After you have prepared a proper estate plan, using a Living Trust, it is also advisable to write out a Statement of Intentions. This is done in your words, and in your own way, to explain the rationale on how you decided on certain terms of your trust. This statement will help the family have a better understanding, and reduce the ill-will that may occur upon your death.
Contact Bott & Associates, Ltd. for more information on estate planning and children.Read More
Clients sometimes approach our firm to purchase a specific document they have heard or believe they require to protect against a particular risk or problem. Other clients come to us to learn about the purpose and process of estate planning more broadly and to determine if they need to develop a plan to protect their own interests. Nearly all clients in the beginning are confused about the distinction between a “Last Will and Testament” (or “Last Will” or simply “Will”) and a “Living Will.”
A Last Will and Testament is the document most people intuitively think of as a Will. A Last Will and Testament is a testamentary legal document that, upon the death of a person, exists as evidence of how the person desired his or her real and personal property to be distributed. The Last Will is typically submitted to a state court as evidence in a court proceeding known as “probate,” which determines the distribution of assets and payment of outstanding liabilities left by a decedent.
The Last Will may be as simple as a one-page form or a substantial document of dozens of pages with sections and subsections addressing various legal, financial, and personal concerns of the client. For those clients who require a trust to effectuate their estate planning goals, the Last Will may act as the funding mechanism designating their Revocable Living Trust as the recipient of non-trust property for the benefit of other persons or entities. Alternatively, a skilled estate planning attorney may draft the Last Will to actually create a Testamentary Trust to hold the decedent’s property after death for the benefit of other persons or entities. The other persons or entities are typically family members, business partners, or charities important to the decedent.
A Living Will, on the other hand, does not address property but instead addresses the end-of-life wishes of clients. Specifically, a Living Will expresses the desires of how clients wish to be allowed to pass away. Most clients elect for pain relief and to be kept in a comfortable state, even if the use of medications to achieve this results in accelerating the dying process. However other clients, a minority in our practice, elect for all available means to be kept alive regardless of the expense to their estate or physical pain that results. There are also a spectrum of circumstances and choices clients choose in between the two most common elections. The important distinction to remember is that a Living Will is the expression of a person’s desires as to how to be allowed to pass away. The people who often benefit most from the Living Will are often the family members who do not have to make the painful decision to end or prolong the life of a loved one who is nearing death.
In addition to the Last Will and Living Will, a basic estate plan for all people typically also includes a Financial Power of Attorney, a Healthcare Power of Attorney, and a HIPAA Waiver. Because the legal authority of a parent ceases when a child turns 18 years old, the Citadel Law Firm recommends all adults aged 18 or over complete at minimum a Living Will, Healthcare Power of Attorney, and a HIPAA Waiver to allow their loved ones (often parents) to be involved in their medical decision making, if required. In addition, because one of the most common sources of legal disputes (or “estate litigation”) among families of a deceased loved one is over a poorly drafted or improperly executed Last Will, we always recommended consulting with an estate planning attorney rather than going it alone with basic forms purchased online.
Thanks to our friends and contributors from Citadel Law Firm for their insight into estate planning.