Challenges Facing Baby Boomers Illustrate Importance of Planning

Millions of baby boomers today are helping to care for aging parents. Whether it’s handling healthcare needs or helping with the day-to-day aspects of life, baby boomers are serving as the stopgap for older parents who might not have anticipated their needs in advance. The pressure put on baby boomers in this situation highlights the importance of proper estate planning.

Many people caring for an older parent are doing so while juggling responsibilities of their own, like working full time and taking care of immediate family members. Some have even put their own health care on hold in order to care for a parent in the short term.

While people often underestimate the cost of retirement and the assistance they might need during this period, some proper planning in advance could help to relieve the amount of responsibility falling on adult children.

A study from AARP in 2010 shows that the ratio of possible caregivers for every person in the high risk category of 80 years or older was 7 to 1. By the year 2030, that number is expected to drop as far as 4 to 1 due to longer life spans, smaller families, and increasing rates of disability.

Relying on friends and family members for care probably shouldn’t be the only approach towards retirement and old age planning.

Baby boomers are more likely than other generations to have disabilities later in life, possibly even impacting their ability to make decisions about their own care. Deciding to set an estate plan in place earlier on can give you peace of mind and ensure that no matter what happens in the future, you have some groundwork laid with your will, trusts, and other critical estate planning documents.

If you are prepared to get started with your own documents and planning, contact an Illinois estate planning attorney today.

The Link Between Prenups and Estate Planning

The most popular use of prenups is a situation where an individual guards against possible loss in a divorce. In fact, polls indicate that 80% of prenuptial agreements are designed to protect separate property. These documents, however, are growing in popularity as an estate planning tool across genders. According to the American Academy of Matrimonial Lawyers, the desire of more individuals to get married later in life means that individuals are bringing greater individual assets into their marriages.

Prenuptial agreements are also popular with individuals getting married for a second time, since concerns about children from those prior relationships as well as concerns about separate assets factor into the equation here. When developed alongside wills and trusts, couples can walk away with important components of an estate plan. The reason to approach all of this planning together is that trusts and prenuptial agreements are considered contracts and can therefore override a will or give legal grounds to contest an existing will. Headed into remarriage? This is an important time to review all your estate planning materials.

There are many different kinds of trusts that can be used for your individual needs. For example, since vacation and personal homes are often a point of contention between spouses, a personal-residence trust can outline the plans for what happens if a couple gets divorced. This personal-residence trust can be included within the prenuptial agreement. Especially when two families are being combined, it’s a good approach to discuss existing financial situations and how a prenuptial agreement can lay the foundation for the future.

Those going into a remarriage tend to be more amenable to a conversation about a prenup, and it can be an important document to draft for both people in the marriage. For more information about prenuptial agreements, contact a DuPage County estate planning lawyer.

The Types of Last Will and Testament Documents

A Last Will and Testament is designed to transfer assets upon death according to the wishes of the departed.  This is accomplished by addressing the three concerns of the transfer, namely, beneficiaries of the will, guardians for any minors and an executor to administer the estate.   This is accomplished in one of three separate ways.

The first type is a simple or statutory will which is primarily used in uncomplicated estate planning.  There are state specific forms containing the necessary legal language which is completed by filling in the blanks.  This “one size fits all” option is not recommended as each person’s estate planning needs will be different.

The second type is a will with a testamentary trust.  This is a form of estate planning when the testator, or will-writer, does not desire to create a revocable trust.  This form of will is beneficial because it may avoid a guardianship estate if children are beneficiaries.   Yet this form does not always allow the estate to miss probate and is just as complex as setting up a revocable trust.

The third type is called a pour-over will.  It is drafted in tandem with a living or revocable trust as the beneficiary.  The will can provide a guideline for the executor to transfer all unallocated assets to the trust upon the death of the testator.  The benefit of such a will is that, if it is properly funded, then the costly hassle of probate court may be avoided.

Those people with children or those who own property should consider planning their estates, otherwise their assets could be fought over in court by relatives.  If you are thinking of creating a will or, better yet, a revocable living trust, it is important to have a guide.  Contact a skilled estate planning attorney in DuPage County to review your planning options.

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