Creating an estate plan is one of the most effective things you can do to help provide for your family’s comfort, stability, and peace of mind in a difficult time.
Understandably, not many people like to think in depth about the necessity of estate planning. As a result, people often put off this important life step until it’s too late. According to a 2019 report from Caring.com, 57 percent of U.S. adults do not currently have estate planning documents such as a will or living trust. While the majority of survey respondents agree that “having a will or living trust” is “very important,” only 53 percent say that they have “talked to a loved one” about estate planning matters.
Broadly speaking, estate planning is the process of making arrangements during your life for what will happen to your estate when you become incapacitated or die. This can mean everything from planning ahead for your burial, to distributing your assets to your friends and family — including your home, vehicle, investments, savings accounts, and personal possessions.
While it can seem daunting to think about, planning ahead for this transition can make it much easier for your family down the line. Estate planning is not only for the extremely wealthy or the elderly. There are important steps you can take to plan ahead at every stage of life’s journey, whether you are purchasing a new home or welcoming a new child into the world.
Creating an estate plan can allow you to protect your assets and make sure that your inheritance is dispersed in accordance with your wishes. More than that, an estate plan can empower you to protect those closest to you, by taking actions such as naming a guardian for your children or disabled adult children and safeguarding your family’s finances from long-term complications. On the other hand, passing away without an estate plan can open the door for prolonged legal battles and costly fees, making an already difficult moment even more confusing and frustrating for your loved ones.
Why is thinking ahead and creating an estate plan so important? This process can empower you to…
Name a Guardian for Your Children
Importantly, an estate plan allows you to choose who will protect your children if you cannot. Many people use their will to name a guardian for their minor children — that is, the person or people who will be responsible for their care. In addition, if your children are minors, you can set up your estate plan to appoint a conservator for their finances until they come of age. Depending on your wishes, you can also set up mechanisms that will allow your child to receive their inheritance from you at a later date. A testamentary trust, for instance, holds the right to the inheritance until a specific designated time, such as when a child reaches a certain age or gets married.
Distribute Your Assets In the Manner That You Wish
It’s important to plan ahead for how you want to pass your most valued assets along to family or friends — whether that means your home, a precious family heirloom, or a savings account.
If you do not account for your assets and name beneficiaries as part of your estate plan, the decisions for who receives what after you pass away ultimately fall to the state, and outside of your control. Illinois intestacy laws are fairly rigid, and may result in your assets being distributed in ways that do not align with your preferences or goals. With an estate plan, however, you can make individualized decisions about who gets what, and when. Without such a plan, these decisions are not up to you. This consideration may be particularly important depending on your circumstances; for instance, you may want to set up special provisions if you have a blended family, children from multiple spouses, or a beneficiary with a disability.
Your estate plan can also name a personal representative for the estate, also known as the executor of the will, to carry out your wishes. This way, you can help ensure that your estate will be properly managed in line with your decisions, and your loved ones protected by someone you know and trust.
Preparing an estate plan in advance can also allow you to think of the big picture, including any philanthropic goals you might have. Legacy planning is a valuable part of estate planning for people of all backgrounds. You may wish to bequeath money or property a charity as part of your will; set up a charitable trust; or leave behind directions for setting up a family foundation.
Whatever your goals, an experienced estate planning attorney can help you make sure that your most important assets are protected and passed down in accordance with your wishes. A legal professional can provide guidance and insight when it comes to writing a Will and Testament, the legal document that states your wishes for your property and assets after death. An attorney can also help you understand and set up a revocable living trust (a legal arrangement that allows a third party, known as the trustee, to hold and manage assets on behalf of your chosen beneficiary), perhaps in conjunction with a Pour-over Will (a legal document outlining that all property that passes through the will at death is transferred to a trust).
Over time, your attorney can also help you to regularly review your documents and plans, to account for changes in your family circumstances, finances, or goals.
Avoid the Costly, Time-Intensive Probate Process
Many people spend time thoroughly preparing their estate plan in order to avoid the probate process. In Illinois, probate refers to the legal process for administering someone’s estate after they have died. The goal of probate is to manage the distribution of the deceased person’s estate to their designated heirs and their chosen beneficiaries, while also resolving any debts owed to creditors.
Even in the most straightforward circumstances, probate can stretch on for months or even a year or more, preventing your loved ones from moving forward or getting access to important assets or funds. Meanwhile, probate can quickly become expensive, using up a portion of an estate’s value in fees, court costs, and, in some cases, taxes. Finally, documents entered into probate become a matter of public record. Many people want to avoid probate in order to preserve their family’s privacy.
Creating an estate plan can streamline and expedite probate, and may allow many of your most important assets to bypass the process altogether. Broadly speaking, an attorney can assist you in putting money and possessions into a trust to allow them to bypass probate. Meanwhile, your attorney may also be able to help you create a strategy for naming beneficiaries on many different types of assets, including real estate; bank accounts; certificates of deposit; and stocks, bonds, and securities.
Protect Your Own Health, Finances, and Peace of Mind
Estate planning is not just about what happens after death. Instead, a comprehensive estate plan can also help you prepare for incapacity, perhaps caused by a sudden accident or critical illness.
Creating an estate plan can allow you to leave guidelines and decisions that your family and care providers must follow in the event that you can no longer make or communicate your own decisions for any reason. An attorney can help you plan ahead for different scenarios by completing a Living Will or Advanced Directive, a short legal document which allows you to provide a medical directive and dictate your end-of-life wishes. An attorney can also assist you in naming a Healthcare Power of Attorney, which outlines who will make your medical decisions if you are incapacitated, as well as a Property Power of Attorney, which does the same for your financial decisions.
In addition, having a comprehensive estate plan can provide you with confidence and peace of mind as you move into life’s next stages, knowing that your legacy, your assets, and your loved ones will be protected. It’s hard to imagine a more rewarding feeling than knowing you’ve taken steps to safeguard your family’s future. Many people also consider factors like life insurance, funeral preparations, and disposition of remains to be part of the estate planning process.
Once you have created an estate plan, it will become easier to make changes and updates as time goes on, whether you want to add a codicil to a will or update the beneficiaries of a trust.
Prevent Family Conflicts and Expect the Unexpected
Life is a highway, a rollercoaster, a box of chocolates: Whatever your preferred metaphor, it’s important to plan ahead for all of the ups and downs that may face your loved ones, even after you’re gone. A comprehensive estate plan can allow you to make provisions and plan ahead for unique situations in your life, while also making arrangements for new developments to come.
For example, you may be able to set up a trust in such a way that it protects beneficiaries from spending all of their wealth at once. You can also make arrangements to safeguard a beneficiary’s assets from a future divorce, or perhaps interference from a spouse.
Importantly, having a thorough estate plan in place can also help prevent family arguments and disagreements. The less room that you leave for disputes or contests, the quicker and smoother the process can be for all parties involved. Preparing for key decisions and organizing your documents ahead of time can make moving forward easier for your loved ones, and take a significant burden off of their shoulders as they enter a major transition period.
Ready to Discuss the Estate Planning Process In Chicago?
Estate planning is one of the single most important things you can do to provide for your family in the future. Our experienced and compassionate team can help you understand what goes into the estate planning process, evaluate your assets, and prepare all necessary documents, including basic wills, trusts, powers of attorney, and advanced directives.
Founded in 2009 and offering more than 15 years of combined experience, the attorneys and staff at the Law Offices of J. Jeltes work together to provide skilled, efficient, and affordable legal representation to individuals and families going through major life transitions.
We know that every situation is unique, and our attorneys can provide you with a comprehensive one-on-one consultation to discuss your legal concerns and goals. Do you have any questions about any aspect of estate planning in Illinois? Curious about what it takes to get the process started? Don’t hesitate to contact us to begin the conversation.