Getting Remarried Should Trigger an Update to Your Estate Plan

DuPage County estate planning lawyersLove might have failed you before, but the fact that you are planning on getting remarried proves you have not abandoned all hope. Just do not let that cloud your judgement when it comes to updating your estate plan. Do not have one yet? You are certainly not alone, but this can be problematic for more reasons than one. The following explains further, and provides some guidance on estate planning matters you may want to consider before or immediately after you walk down the aisle.

No Will? You Might Have a Problem

Some blended families just do not blend. Others manage to get along fairly well, but tensions may mount if you pass away without a will. You see, without a will, your estate will be divided up according to Illinois state law. This essentially means that your spouse would receive half of your estate, and that your children would have to split the remaining half. Even more troubling is that this law does not address issues involving family heirlooms or other items you may not want sold. Instead, your family will be left to battle it out, which could take several months, possibly even years. Thankfully, a will can and often does eliminate a great deal of the potential discourse.

Making Updates to an Existing Will

If you already have a will, you are already one step ahead of most. Still, an update is generally necessary when remarrying. Your beneficiaries likely need to be updated to ensure the parties you wish to have inherit your assets and/or tangible property are the ones that are actually listed. You might also want to take a look at your power of attorney and advanced healthcare directives to ensure that the person you want in charge is, in fact, listed.

Also, do not forget to update any life insurance policies and retirement accounts to reflect what is in your will. Otherwise, portions of your will may not matter. For example, if your ex-spouse is still listed as the beneficiary of your life insurance policy, it is likely they will receive the money instead of your current spouse. You should also review any titled assets you may own to avoid conflicts in titling and joint tenancy laws, which can also nullify any wishes expressed in a will.

Contact Our DuPage County Estate Planning Lawyers

If you are getting remarried and need assistance crafting or updating a will, our DuPage County estate planning lawyers can help. Dedicated to ensuring your wishes are carried out upon your death, we have the skills and knowledge needed to creatively address any will or trust issues you and your loved ones may face. Schedule your consultation with Stock, Carlson, Oldfield & McGrath LLC to learn more. Call 630-665-2500 today.

Source:

http://www.cnbc.com/2016/10/14/remarrying-update-your-estate-plan.html

 

Inheritance Taxes in Estate Planning

inheritance taxes, DuPage County Estate Planning AttorneyMany people take advantage of the tax savings that estate planning options give them. Utilizing different legal options, such as trusts, will often alleviate how much a person would have to pay to the IRS in taxes for those funds. However, one of the issues to consider is whether or not the plans you are establishing will place a tax burden on your beneficiaries when you pass.

The federal tax exemption statistically affects approximately 1 percent of the country’s population. The current exemption is $5.43 million for individuals and $10.86 million for couples. Yet many people fail to consider if the state they live in has required estate tax. There are 16 states, including Illinois, which levy up to a 20 percent estate tax to beneficiaries.

Funds from life insurance policies are exempt from taxes. Everything else is taxable. The only people exempt from paying these taxes are spouses. All other beneficiaries can be taxed between 10 and 26 percent for any property or funds they inherit. Domestic partners are also required to pay the same estate taxes as other beneficiaries.

There are several options people have to help alleviate the burden of inheritance tax with which their heirs could get hit. Options can include the following:

  • Life Insurance: Since funds from life insurance policies are not taxable, one option may be to set up a trust and have the trust as the beneficiary of any life insurance policies you have. By setting up life insurance this way, the person maintains control of how those funds will be doled out to heirs, since the policy funds will be place in the trust and not directly to a beneficiary. This way, the benefits of a trust are being utilized without heirs having to pay any inheritance tax;
  • Gifting: Under current tax laws, a person can gift someone up to $14,000 per year—$28,000 if they have a spouse—without any required gift tax needing to be paid. However, there is a $5.43 million lifetime cap on gifting; and
  • Transferring Real Estate: One way to limit estate taxes on property is to place the property under the ownership of a limited partnership or in a trust.

These are only some of the options available when it comes to estate planning. A qualified DuPage County estate planning attorney can help sort through what the best options for your situation would be. Contact the Law Firm of Stock, Carlson, Flynn and McGrath, LLC at 630-665-2500 today to discuss your options.

Vacation Properties and Estate Planning Options

vacation properties, Illinois Estate Planning AttorneyMany families invest in vacation properties—a mountain cabin or ocean cottage—as places in which to escape and enjoy quality time together. Often, a family owns a vacation property for years—a home enjoyed while watching their children grow. Years later, the property becomes a place where the family’s grown-children bring their own children.

Yet where does a vacation home fit in when it comes to estate planning, and what options do owners have to ensure a property is protected?

Cabin Trust

Property owners have the option to create a “cabin trust.” A cabin trust is a revocable trust formed upon a property owner’s death. An owner can choose to add a certain amount of money, along with the property, specifically designated for any costs incurred for the upkeep of the property. Additionally, the trust should have instructions regarding what should happen to the property once those funds are depleted, and when and if the property can or should be sold. A cabin trust can also stipulate who is allowed to use the property and when the property may be utilized. A beneficiary’s right to use the property pending death can also be added as an additional stipulation.

Limited Liability Company

Owners also have the option of forming a limited liability company or LLC. With an LLC, an owner transfers shares of a property to beneficiaries. The LLC should have an operating agreement which clearly stipulates the property’s ground rules and how major decisions regarding the property will be made.

Having a property in an LLC also protects beneficiaries from personal liability should an issue arise surrounding the property. For example, if there is a financial issue, a creditor can only make claims against the LLC and not to any of the beneficiaries directly.

Consult with an Experienced Estate Planning in Illinois Today

Cabin trusts and LLCs have both positive points and downsides. Therefore, it is important to consult with an experienced DuPage County estate planning attorney to find out what option will work best for your situation. Call 630-665-2500 today.