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.

Estate Planning Guidelines When you Have a Non-Citizen Spouse

resident alien, Illinois estate planning lawyer, estate planning, estate tax, Standard estate planning tax advice might not work for situations in which one or both spouses are resident aliens. The term resident alien is used by the U.S. government to describe non-citizens who are permanent U.S. residents, and it could be beneficial for those in this circumstance to get some guidance from an estate planning attorney.

Under federal tax law, resident aliens and American citizens are governed by the same estate tax rules. In cases where the taxable estate assets are above $5.34 million, the IRS will want 40% of those excess funds. With careful planning, the implications of the federal estate tax can be avoided or minimized.

U.S. citizens are eligible to take advantage of the unlimited marital deduction, which allows for as many tax-free transfers to your spouse during your lifetime as you would like. Unfortunately, non-citizen spouses can't take advantage of this program. This can be a big hit when it comes to the estate tax, since the IRS will always want to go after 40% of the excess.

There are several solutions to this issue if you are already married to a non-citizen. First, your spouse can become a citizen. This can even occur after you have passed away provided that it is done before the due date for your federal estate tax return, allowing your spouse to reap the rewards of the unlimited marital deduction.

Second, you can reduce your taxable estate by making big gifts to your spouse while you are alive- married couples can transfer $145,000 to one another in 2014. Finally, you could set up a qualified domestic trust, deferring the federal estate tax on any assets inside until your spouse removes them or passes away.

As you can see, estate tax planning with a non-citizen spouse can be complicated, but there are opportunities for you to reduce the federal estate tax. Consult with an Illinois estate planning attorney today for more details.

Tips on Leaving Inheritances to Your Children

estate plan, children, inheritance, will, trust, Illinois estate planning lawyer, beneficiariesAccording to an article from AARP, baby-boomer parents will be leaving $30 trillion to their children over the next four decades, keeping in mind factors such as longevity, the economy and the stock market. There are steps you can take to ensure that the estate plans you make are carried out in the easiest and less painful way possible.

One of the most important factors to keep in mind is communication with your children about where you stand financially. Fidelity Investments conducted a survey that revealed that most people underestimate their parents' financial worth by approximately $100,000.

It's also important to let your children know who to contact in the event of your death, as well as where important documents are kept for safe-keeping.

Ideally, the division of your estate should be equal among your children. If, however, you choose a different division, explaining why you are dividing assets the way that you are can help ease any resentment later on. If you aren't comfortable having that discussion, legal experts suggest you leave a note in your will, explaining your decisions.

It's also not a good idea to choose one child to be in charge of the dividing of funds and property. It's better to do it yourself. For example, have a list made of who gets what piece of art, jewelry, etc.

Any insurance policies should have all your children listed as beneficiaries, not just one with the expectation they will share the proceeds equally with their siblings.

Many experts recommending setting up trusts for your children, this is another way to ensure that the estate you are leaving will not be spent foolishly after you are gone. The funds can be released to your child in stages and not just in one lump sum. You can also have provisions denying or delaying the release of funds, such as in the case of a substance abuse issue.

Estate planning can be complicated so it's important to contact a knowledgeable DuPage County estate planning attorney to make sure that your assets are protected