|
Estate Planning (Death) - Wills and Trusts
Wills. The cornerstone to every estate plan is the implementation of a valid Will. In addition to nominating a guardian for any minor children, the execution of a Will also enables
you to nominate an Executor for your estate. The Executor will be responsible for administering the terms of your will in accordance with the Probate Code. These responsibilities include
paying all of your remaining debts, filing your income tax returns and distributing your remaining assets according to the instructions in your will. Whether your situation is simple or
complex, we can recommend the type of will and tailored provisions that need to be incorporated for your specific situation. In our practice, we can discuss and make recommendations about
the following types of Wills, depending on your needs:
- Simple. Pourover Wills, Testamentary Wills (Outright Bequests, Contingent Trusts, Disclaimer to Family Trusts)
- Taxable
- Generation Skipping
Trusts. The type of estate plan implemented may involve the establishment of a trust. A trust can be created as a Revocable Living Trust or as a Testamentary Trust in a Will.
Since a Testamentary Trust is created in a will, it does not come into existence until the individual dies. However, a Revocable Living Trust is created during a person's lifetime and
it applies to both before and after a person dies. Specifically, a revocable living trust delineates the framework for how all property placed in the trust will be handled while a person
is alive and what happens to the assets after they die. Accordingly, a living trust has become an extremely popular estate planning tool because it results in several advantages upon the
disability or death of a person, regardless of whether they are single or married.
The benefit with having a revocable living trust is that it can significantly reduce or eliminate estate taxes in single and combined estates, avoid probate and eliminate the need for
a guardianship if a person becomes incapacitated during their lifetime.
- Estate Taxes. A carefully drafted estate plan can significantly reduce or eliminate payment of costly estate taxes to the federal government by individuals who own non-exempt
assets at the time of their death that are subject to the tax.
- Probate. Many clients tell us that they want to "avoid probate" although they often do not know how to do so, or why it is beneficial. Probate is a legal proceeding, where
the court appoints an executor or administrator to value assets and distribute them under the direction of the court. Of course, one method to avoid probate is joint tenancy, which
often works effectively for a husband and wife. However, serious problems, such as assessment of gift taxes and/or accessibility of assets to a child's creditors, can occur when assets
are jointly held with a child. A revocable living trust avoids the probate problem, because the assets are held by a trust that is controlled by a written agreement. Therefore, when a
person dies, the trust continues and is administered by the trustee until it is terminated pursuant to the trust agreement. Thus, assets are not readily available to children's creditors
or subject to tax implications where property is otherwise transferred when someone dies. It is also very private, because the only document that will likely be filed with the court,
provided assets held outside the trust are not otherwise subject to probate - is a Will. Thus, detailed information about your assets and liabilities are handled in a private forum -
by a trustee, instead of by a public forum - the court.
- Disability. A revocable living trust is also extremely beneficial where a person becomes incapacitated during their lifetime. When a person becomes unable to handle their
own affairs, such as after a serious accident or Alzheimer's disease, the court will step in and appoint a guardian to assume management of a person's financial matters. But, a revocable
living trust avoids this process, because it identifies a trustee to handles theses duties, if the person becomes incapacitated so that the court is not involved.
Therefore, revocable living trusts have become very popular in today's society. In our practice, we have experience with preparation of revocable trusts for our clients. We can discuss
and make recommendations for Simple Trusts, Taxable Trusts that incorporate outright bequests, QTIP - qualified terminable property elections and power of appointment provisions, as well
as Generation Skipping Transfer Revocable Trusts which can help avoid adverse tax consequences, in certain situations.
Other Trusts. If your situation requires a more complex solution, we can also make recommendations and prepare Irrevocable Trusts (Irrevocable Life Insurance Trust), Lifetime
Trusts (Minor's Trust, Crummey Trust) or Charitable Trusts (CRUT - Charitable Remainder Unitrust, CRT - Charitable Remainder Trust).
Please feel free to call or e-mail us if we can be of assistance.
CHICAGO
(773) 625-2200
(773) 625-2220 FAX
|
SUBURBS
(847) 426-2900
(847) 426-2907 FAX
|
|
|
|
