Giving Your Heirs “Lifetime Gifts” Can Benefit You During the Estate Planning Process

Wheaton wills and trusts lawyersIf estate plans were only about money, they would not be so difficult to create. Instead, parties must first come to terms with their own eventual death, and they must consider where and how they would like money to be distributed. Since family matters can be highly complex and sometimes volatile, and the rules for handling assets upon one’s death can vary by type and situation, such decisions regarding inheritances can be more than just difficult. One possible solution is to use “lifetime gifts” as your guide. Learn more in the following sections, including how our seasoned estate planning attorneys can help with drafting your initial estate plan. 

What is a Lifetime Gift?

Lifetime gifts are often used as an estate-planning strategy for reducing federal and state taxes, which means they are most commonly used in estate plans that exceed either the $4 million Illinois state estate tax exemption or the $5.5 million federal estate tax exemption. Each gift, which may equal up to $15,000 in value each year ($30,000 maximum for married couples giving a joint gift), reduces the value of the estate, thereby reducing the amount that heirs will be taxed when they inherit it. Lifetime gifts can do more than simply lower the tax load of one’s estate, however. They can also benefit the guarantor during the estate planning process. 

Using Lifetime Gifts to Aid You in Estate Planning

One of the biggest struggles that guarantors face is deciding how to distribute their wealth among heirs. Some are not even sure if the total value of the estate should be divided equally among children, or if personality and spending habits be considered when deciding how much to give a specific heir? Those who are considering the latter may use lifetime gifting as a part of their estate planning strategy. 

Consider this example: You have two children – one that has always been responsible with money and life decisions, and another that usually spends money frivolously and seems to struggle with making good and healthy life decisions. Perhaps the latter has made attempts to improve things, so you want to leave them an inheritance. Yet, because of their history with money, you are concerned that they will squander whatever you leave to them. A lifetime gift, given to them with conditions, can help you determine how well they might handle an inheritance. You can also give lifetime gifts to extended family members that you may not know very well to determine how they might handle any wealth that you decide to leave them. 

Contact Our Wheaton Estate Planning Attorneys 

Lifetime gifting is just one of many strategies that guarantors can use during the estate planning process. Stock, Carlson, Oldfield & McGrath, LLC can assist you in using it, as well as any others that may serve your needs. Schedule a consultation with our DuPage County wills and trusts lawyers by calling 630-665-2500 today. 

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=609&ChapterID=8

https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax

 

Cryptocurrencies in Your Estate Plan – What You Need to Know

Illinois will and trusts lawyersBitcoin, Ethereum, and other types of cryptocurrencies have made many savvy investors quite wealthy – and many of them have been able to keep their wealth secret. Unfortunately, the very thing that makes such currencies appealing can also endanger the wealth of one’s heirs. Learn how and why you should add your cryptocurrencies into your estate plan, and discover how a seasoned Illinois wills and trusts lawyer can assist with the process and mitigate any financial loss. 

The Hidden Nature of Cryptocurrency Creates Issues for Heirs 

Because the money is entirely digital, cryptocurrencies can be easily lost. In fact, there are stories about investors who have had to dig through their trash after losing their password and login information. Others choose to keep their currency stored offline, on a thumb drive. However, even this presents a problem in estate planning. 

One cannot gain access to a cryptocurrency account if they do not know that it exists – and since most investors want their funds to stay private, most heirs do not have any knowledge of the account. Yet, even with knowledge of it, the heir cannot search for the account like they could a bank account or retirement account, and they would not receive notice from the Internal Revenue Service since the agency does not typically have knowledge of the account either. Thankfully, there is a way to protect your cryptocurrency wealth and your heirs from severe financial loss. 

Adding Cryptocurrencies to Your Estate Plan

While you should definitely include every financial account to your estate plan, it is absolutely critical that you take the proper steps to ensure your cryptocurrencies are accurately documented and easily retrievable. One way to do this is to download your account to a thumb drive, offline, and then store it with your estate planning documents. Another is to ensure you include all details of your account into the estate plan and ensure it is safely stored (i.e. a locking safe). Some investors choose to do both, just to be safe. Either way, be sure that your heirs know where to find your estate plan and other pertinent documents. 

Contact Our DuPage Estate Planning Lawyers

If you have not yet created your estate plan, or you need to add your cryptocurrency account to it to ensure your heirs receive all the wealth to which they are entitled, Stock, Carlson, Oldfield & McGrath, LLC is the firm to trust. Our seasoned DuPage County estate planning attorneys have over 40 years of experience in the industry, and we can assist you with developing a sound set of documents that protect your wealth and your heirs. Call 630-665-2500 and schedule your personalized consultation with us today. 

Source:

https://www.cnbc.com/2018/04/30/add-cryptocurrency-assets-to-estate-plan-to-save-your-fortune.html

 

Understanding the Risks of DIY Estate Planning

Illinois estate planning lawyerIn a world where people are increasingly reliant upon the internet for their personal, financial, and business needs, do-it-yourself estate planning may seem like the fastest, easiest, and least expensive option for drafting a will or trust. Unfortunately, this is rarely the case. Do-it-yourself estate planning options can rarely accommodate the unique needs of individuals, and they can leave the surviving family susceptible to all sorts of complications. Learn more about the risks that one may assume under a DIY estate plan, and discover how the assistance of a seasoned estate planning lawyer can reduce the risk of probate issues for your loved ones.

Overlooking Potential Issues

In a DIY estate plan, individuals usually rely on the prompts of a computer. If they respond incorrectly, do not understand the verbiage of a specific question, or if the computer fails to ask the appropriate questions, there could be potential issues in the future. As an example, consider the estate plan in which one names only primary beneficiaries. If something happens to the named parties and a successor or contingent was not named, the estate could go to probate.

Complex Estate Planning Issues 

Families are far more diverse these days. In fact, many individuals are on their second or third marriages, and there are often children involved. How does one ensure that everyone receives their "fair share," or how can you prevent a spouse from taking assets that are intended to go to children? To answer this question simply: such issues are best discussed with a lawyer, rather than a computer, especially if there is a substantial amount of money at stake.

Guardianship Naming is a Complex Issue

Parents often assume that a DIY will is sufficient for naming a guardian. Sadly, this is not always  the case. There are scenarios in which parents may need a more complex document to ensure the safety and well-being of their child. For example, consider a scenario in which the primary guardian dies shortly after the child's natural parents. If a successive guardian has not been named, the child could experience the very same fate that his or her parents were trying to avoid.

Probate is More Common with DIY Estate Plans

Estate plans that are drafted with the assistance of an attorney are far from iron-clad, but they are still far less susceptible to probate than a DIY estate plan. Part of this can be attributed to the more comprehensive nature of lawyer-assisted estate plans, but another reason that such estate plans are more effective at preventing probate is that people are also less likely to challenge an estate that was drafted in the presence of an attorney.

Contact Our DuPage County Estate Planning Lawyers

If you need assistance with an estate plan, contact Stock, Carlson, Oldfield & McGrath, LLC for assistance. Dedicated and experienced, our DuPage County estate planning lawyers can help you create a personalized legal document that reduces the risk of probate for your heirs. Call 630-665-2500 to schedule your personalized consultation today.

Source:

https://www.wsj.com/articles/diy-estate-planning-has-its-risks-1502071680