Many of us think of estate planning as a complex and unpleasant task to be put off whenever possible. However, in these uncertain times, estate planning is especially critical. Your estate plan provides certainty for your loved ones, ensures your wishes are carried out — both during your life and after your death — and can help to ensure that the costs associated with your estate’s administration are minimized, ensuring your loved ones receive your assets as you intend. Learn why it’s more important than ever to have a comprehensive estate plan.
What Is An Estate Plan
The term “estate planning” refers to the process of designating your wishes, including how you want your assets distributed and who you want to make decisions in the event of your death or incapacity. Your estate plan is the set of legal documents created to carry out those directives.
The process of estate planning begins with creating a comprehensive inventory of your assets, including:
- Real estate holdings, including your home and any vacation homes or other land holdings
- Valuable collections or other personal property
- Checking and savings accounts
- Securities, including stocks, bonds, mutual funds, or other securities holdings
- Digital assets such as cryptocurrency or NFTs
- Life insurance policies
- Retirement plans
- Health savings accounts
- Business ownership interests
Once you have an understanding of your assets and liabilities, you and your attorney will proceed to make decisions about the distribution of these assets upon your death. To carry out this process, your attorney will recommend that one or more documents be created, including a will, revocable or irrevocable trust documents, a durable power of attorney, a medical directive, and other documents depending on your financial situation and wishes upon your death. Each of these documents has a different legal operation, offering you the flexibility to create a customized plan for your estate both during your life and after your death.
Why Is An Estate Plan Important?
An estate plan serves a number of important purposes, even if you don’t have a large estate.
A clear and comprehensive estate plan can serve to avoid disputes among heirs, legatees, and beneficiaries. Many of us have heard at least one horror story about family members arguing or even becoming embroiled in lengthy legal battles over a family member’s estate. In many cases, these legal battles can erode the value of the estate, create long-lasting animosity between family members, and result in outcomes that are contrary to your wishes.
A comprehensive estate plan can prevent these conflicts, allowing you to designate who will carry out your plans and stopping fights before they begin.
Allowing For Individualized Estate Plans
An estate plan allows you to personalize the way in which your assets are distributed to ensure equitable outcomes rather than the legal default in your state. For example, a trust document allows you to designate the ages at which your children will receive disbursements of funds from your trust, enabling you to account for the care of a child with a disability or set funds aside for the education of a college-aged child. You can even provide for the care of family pets. This control can ensure that your loved ones’ individualized needs are met over the long term, even when you’re not able to be there to manage them yourself.
An estate plan is also absolutely essential if you’ve had children in more than one marriage, or if you’ve remarried after having children with a prior spouse. Your estate plan can ensure that everyone in your blended family is treated fairly and that your wishes for their care are carried out upon your passing.
Providing For The Care Of Dependents
Even if you’ve expressed your wishes regarding the care of your minor or dependent children during your life, there’s no legal guarantee that these expressions will be respected upon your death. To make sure that your children and other dependents are cared for in the manner you intend, it’s crucial to express those desires in a legally enforceable document. Your plans for your children, their care, and their inheritance can be laid out in your estate plan, providing critical peace of mind that your children will be cared for if the unthinkable happens.
Protecting Against A Tax Burden
If your estate meets the Illinois state estate tax threshold of $4 million, an estate plan can help to minimize the tax burden on your heirs, legatees, and beneficiaries. Your attorney can help you structure your estate plan to avoid as much tax burden as possible, ensuring that your assets are used to benefit your loved ones and not consumed by a tax bill.
Getting An Accurate Picture Of Your Financial Situation And Goals
An estate plan can also serve critical functions while you’re still around, allowing you to clarify your current financial picture and measure it up for your goals regarding care of loved ones after you’re gone. An estate plan, for example, can help you to evaluate whether you need to purchase additional life insurance or change your investment strategy to ensure that a loved one’s needs are fully met upon your passing. Working with an estate planning attorney to construct a comprehensive estate plan is a great way to sharpen and clarify your goals and measure your progress toward those goals, all while creating the documents and financial structures that will protect your loved ones.
Avoiding The Time And Costs Of Probate
The probate process, while not as scary as it’s often made out to be, comes with costs and delays that can erode the value of your estate and result in negative outcomes for your loved ones. A comprehensive estate plan can avoid the costs of probate and administration, and provide financial security for your loved ones without delays.
Providing For Your Own Care
As part of your comprehensive estate plan, you can provide for your own care in the event you are unable to make medical, financial, or personal decisions for yourself. This incapacity planning step can give you immeasurable peace of mind regarding your own future, and can ensure that your affairs are carried out in accordance with your wishes even if you’re unable to do so yourself.
Ready To Get Started On Your Comprehensive Estate Plan? We’re Here For You
Preparing for the unknown can be difficult, especially if you are doing it alone. Our team of experienced and compassionate advocates is here to help.
Founded in 2009 and offering more than 20 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.
Our dedicated team can help you understand what goes into the estate planning process, evaluate your assets, and prepare all necessary documents, including basic wills, trusts, and powers of attorney.
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. Don’t hesitate to contact us to begin the conversation.