Rethinking Trusts and Estate Planning

DuPage County estate planning lawyers, estate planning, trusts, trusts and estate planning, transfer-on-death beneficiary, payable-on-death in orderToo often, people think that estate planning and trusts are not applicable to their lives. They may feel they are not old enough to begin to plan, and therefore mistakenly believe that only senior citizens make estate plans and set up trusts. Additionally, they may think that only people who are rich set up trust funds. Again, this is not true.

Although many wealthy individuals do set up trusts to ensure their loved ones are taken care of and their estate is not eaten up by taxes, trusts can be set up by people who have a limited means.

trust is useful in several ways. Whether the person setting it up is rich or has a limited income, it ensures that a person to whom the trust is being left, such as a young adult, will not spend all the money at once. Quite often, a trusted family member or friend is named as trustee to cut down on expenses of administrating a trust.

Another reason why people avoid creating trusts is that they feel it will take too much work to create a trust. Yet the act of moving the money that will fund a trust does not have to be difficult. One option is to name a trust as a transfer-on-death beneficiary or payable-on-death in order to fund it. Hence, immediate action does not have to be taken. This helps keep the funds out of probate.

Many also believe that issues, such as trusts and estate planning, are only necessary when a person is dead and does not realize how helpful they can be when a person is still living. Trusts can help in the event one is stricken with a debilitating illness or injury. Having plans in place for unexpected tragedies can also help ease the burden off one’s family since an estate plan will already have his or her wishes in place.

It is never too early to begin estate planning. If you need help developing an estate plan in Illinois, contact Stock, Carlson, Flynn & McGrath, LLC. Our experienced DuPage County estate planning lawyers offer solutions to protect your rights and assets and help you plan for a better retirement. We can assist clients in Downers Grove, Hinsdale, Lombard, Naperville, and throughout DuPage County. To schedule a consultation, please contact our office at 630-665-2500.

Living Wills become More Popular in Estate Planning Choices

Many people are under the misconception that estate planning is only for the rich and the elderly. In estate planning, an estate is not a large mansion, but it is actually everything a person owns when they die. Personal property, bank accounts, their home or other property, digital information, stocks, retirement plans, and business ownership all fall under the domain of a person’s estate.

Whether wealthy or not, everyone should have a will or living trust to clearly spell out your wishes in the event of your death. A living trust, also referred to as a living will, is becoming a more and more popular choice in estate planning, especially as it avoids the probate process a will is required to go through to determine its validity.

In a living will, you determine who the trustee or the trustees are and who the beneficiaries will be. Check with your attorney to see if you and your spouse should also be on the list of trustees, as this will enable you to maintain complete control of your assets while you are still alive.

Like a will, a living will allows you to clearly spell out which of your assets goes to whom and how those assets should be handed out. For example, you may not want a young adult to suddenly inherit a large sum of money so your instructions could include the assets be portioned out over a period of time.

An attorney can help you decide if a will or a living will is the right choice for you based on your assets and the size of your estate. Whether a large or not so large estate, the basic questions for estate planning are the same.

  • Who are the loved ones you want to provide for?
  • What assets will you have to gift to your beneficiaries when you die?
  • What will your liabilities (i.e. debts) be?
  • When do you want your beneficiaries to receive your gifts (i.e. minor children)?

If you have questions on whether or not a will or living will is right for you, contact a qualified DuPage County estate planning attorney today to help decide which are offer the best options.

Different Kinds of Trusts and Their Uses

If you have property or assets that you want to leave to your heirs, then you have several options.  A trust can shield these assets from taxation and also probate.  It allows you to protect your legacy and control your wealth.  They are essential to good estate planning so it is important to know what they can do.

There are two types of trusts.  The first is a living trust, which is called that because it is active during the grantors lifetime.  A living trust can either be revocable or irrevocable.  A revocable trust can be changed at any time in the grantor’s lifetime.  If a relationship, circumstances or your intentions change then it is not an issue.  But while it does avoid probate, a revocable trust is subject to estate taxes.

An irrevocable trust is the opposite.  It immediately transfers your effects out of your estate and into a separate legal entity. There is no way to change your mind or use these assets because they are not yours anymore.  Benefits of an irrevocable trust is that it can avoid probate and estate taxes.

The other type of trust is called a testamentary trust.  These kind are specified in a will document and only created after the grantor has died. The funds can be subject to probate and estate taxes but can accomplish a variety of goals.

One example is a bypass or credit shelter trust which can protect your estate from taxation.  It allows the transfer of the most money allowed without being subject to taxation and then moves the rest to your spouse completely tax free, even if the estate grows.  Another example is a generation-skipping or dynasty trust.  It allows the transfer of a sizable amount of assets tax-free to beneficiaries that are at least two generations removed, such as grandchildren.

If you are interested in leaving the most assets to your heirs, then you should consider setting up a trust.  Contact an experienced estate planning attorney in DuPage County who can suggest the best trust for your given situation.