Crafting a comprehensive estate plan has several benefits: it can provide guidelines for your own care, it allows you to plan for your family’s future, and it safeguards your assets after your death. Your estate plan can be made to fit your goals for your assets and beneficiaries. It can also help you feel more confident about how things will be handled after your death.
Documents in a Comprehensive Estate Plan
The components of your estate plan may differ based on your unique needs. Generally, a complete estate plan includes the following documents:
- A Will: This lays out your wishes for assets and heirs, sets an executor for your estate, and explains guardianship wishes for any minor children you have.
- A Trust: A trust is an entity that can hold certain assets and name beneficiaries. Your trust is under the care of a trustee, and the assets in a trust avoid probate.
- Property and Financial Power of Attorney: This appoints someone to take care of your financial actions and decisions if you are unable to.
- Healthcare Power of Attorney and Advance Directives: Advanced medical directives outline what healthcare you allow yourself to receive and where. A power of attorney for healthcare gives someone power over your medical decisions and makes them responsible for following your medical directives if you become incapacitated.
For you to be sure that an estate plan can provide its benefits, the documents must be legally enforceable. When you create an estate plan with an estate planning attorney, you can ensure that these documents cover all your needs and are enforceable after your death.
Why Do I Want to Avoid Probate?
Creating a trust and other estate planning documents helps you avoid probate. If you die with only a will, your estate may enter probate court. This is how the state gives authority to an executor to distribute your assets. In some cases, this also subjects your estate to federal and state estate taxes. If you don’t have a will when you die, the state will appoint an executor for your estate and follow intestate succession laws to distribute your assets.
Probate court is costly and lengthy for your loved ones who are still grieving your loss. Not only will the value of your estate be lessened, but your family members will have to pay court costs. They also won’t have access to the assets you want to pass to them until probate is complete. Probate can take months to years to complete and be a significant hassle for your family.
Benefits of an Estate Plan
There are several benefits to having a comprehensive estate plan.
Help Your Loved Ones
By creating a comprehensive estate plan, you can avoid probate and ensure that your wishes are followed. The heirs and beneficiaries that you want to benefit from your estate can do so, and avoiding probate will allow them to receive full benefits.
A will and trust also allow you full control over what assets your loved ones receive rather than leaving it up to state succession laws. Even if Illinois’ intestacy laws reflect how you want your estate distributed, your family would still have to go through probate. An estate plan also allows you to name a trustee and an executor.
A complete estate plan gives your loved ones instructions for your end-of-life care if you become incapacitated or incompetent. Documents such as a power of attorney and medical directives can plan for long-term care and healthcare. It can also prevent the necessity of establishing a guardianship over your life. You could provide property and healthcare power of attorney to a friend, family member, other loved one, or trusted professional.
If you become incapacitated without these documents, your family has to petition the court to make decisions for your medical care and financial management.
Maintaining Your Estate and Assets
Estate planning helps you protect assets from creditors and determine who benefits from those assets. By keeping your estate out of probate, you are also keeping your assets private. Probate is a public process, and creating a trust can keep many of your assets out of public records.
Q: Why Is Having an Estate Plan Important?
A: An estate plan distributes your assets to the people and entities you want to benefit from your estate. Documents in an estate plan can designate custody decisions for your minor children. If your estate plan keeps your estate out of probate, your loved ones and beneficiaries can avoid the time, stress, and financial burden of probate. It can also give directives for your own care at the end of your life, including giving individuals power over your financial and medical decisions.
Q: Does a Spouse Automatically Inherit Everything in Illinois?
A: If someone dies without a will or trust, their estate follows Illinois instancy succession laws. A spouse will inherit everything if the person who died had no descendants. If there are descendants, which include children and grandchildren, the spouse will inherit half and the descendants will inherit half. When someone dies with no spouse or children, their estate will pass to parents and siblings.
Q: What Are the Three Primary Goals of Estate Planning?
A: For a complete estate plan, the main goals for most individuals include:
- Giving instructions and legal authority to take care of you at the end of your life and if you become incapacitated
- Maintaining and protecting your estate so that it can provide benefits for you during life and benefits to your heirs after death
- Mitigating costs, time, and stress for heirs and beneficiaries
Q: How Do I Avoid Estate Tax in Illinois?
A: The Illinois estate tax applies to estates that value over $4 million. If your estate is under this amount, you will not owe a state estate tax. To minimize the tax impact on a large estate, you need effective estate planning. This can protect your assets from creditors, taxes, and the state probate process.
Q: What Are Five Components to Consider When Estate Planning?
A: The five documents of an estate plan include:
- Wills appoint an executor to your estate and outlines the distribution of your assets.
- A trust is overseen by a trustee and determines beneficiaries to assets in your estate.
- Financial power of attorney appoints someone to make financial decisions if you are unable to.
- Healthcare power of attorney appoints someone to make medical decisions for you at the end of your life.
- Medical directives list what you allow for healthcare.
Contact Stange Law Firm
Contact the estate planning attorneys with Stange Law Firm to create a comprehensive estate plan.