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Recent Blog Posts
The Importance of Estate Planning when Diagnosed with Alzheimer's Disease
According to the Alzheimer's Association, Alzheimer's disease is the sixth leading cause of death in the United States.
Currently, there are 5 million people who are 65 years or older suffering from the disease, and another 200,000 younger than 65 who are struggling with early-onset Alzheimer's. Those numbers will continue to rise as Americans continue to grow older. By 2025, the number of Americans who will be diagnosed with Alzheimer's is predicted to reach over 7 million, and by 2050, that number will reach almost 14 million if no medical cures are found.
The National Institute on Aging, (NIA), recommends a series of steps that a person who has recently been diagnosed with Alzheimer's, or any other serious illness, should take in order to make sure that their wishes are carried out. The organization has broken down the estate planning one should do into two groups - documents outlining the health care wishes of the person and documents outlining the financial wishes.
What Happens to Your Digital Assets when You Die?
When most people think of estate planning, they think of items such as bank accounts, stocks, bonds, real estate, furniture, jewelry, etc. But what happens to a person's virtual property - or digital assets - when they die? An article in the Huffington Post discusses digital assets and what people should consider when planning their estate.
There are many items that fall under a person's digital assets, including:
- Emails;
- Social network accounts like Facebook, Twitter and LinkedIn, as well as all the content posted on these sites;
- Digital photos and videos;
- Songs;
- Ebooks;
- PayPal account.
According to a survey conducted by McAfee, the average internet user has about $37,000 in digital assets. Most of those assets are contained in unprotected digital devices.
Lessons Learned From Farrah Fawcett's Estate
The deaths of celebrities often have important lessons for estate planning. Failing to consider your estate in full can have ramifications for the beneficiaries and it can also mean that your intentions might not be carried out the way you thought after you have passed away. If you would like a review of your existing estate planning documents or if you would like to have a comprehensive evaluation of your needs, contact an Illinois estate planning attorney today.
When Farrah Fawcett passed away, her partner, Ryan O'Neal, took an Andy Warhol painting from her home, alleging that it was his. The University of Texas sued O'Neal because Fawcett's revocable living trust outlined that all her artwork was to be given to the school. There were two copies of the painting in question, and the University of Texas had already received one of them, but this didn't stop them from pursuing O'Neal for the other copy. Ultimately, O'Neal won the rights to keep the painting, and he stated that he plans to leave the painting for the child he had with Fawcett.
Estate Tax Changes for 2014
Typically, new amendments or laws regarding estate planning will start at the beginning of the year, and 2014 will be no different with regard to some changes in estate planning. One of the biggest changes hitting the landscape is that as of January 1st, individuals are able to pass on an additional $90,000 free of the federal estate tax to others during their life and at death. Since this is such a dramatic change, it's worth a call to your estate planning attorney to talk about how this might alter your existing plans for the upcoming year.
What's behind the change? It's a lot more practical to give individuals the opportunity to give gifts during their life or at death at this new higher limit without having to worry about the estate tax. Previously, the exclusion amount was capped at $5,250,000, but now each personal obtains a "Credit" to offset estate taxes on amounts up to $5.34 million.
The Link Between Prenups and Estate Planning
The most popular use of prenups is a situation where an individual guards against possible loss in a divorce. In fact, polls indicate that 80% of prenuptial agreements are designed to protect separate property. These documents, however, are growing in popularity as an estate planning tool across genders. According to the American Academy of Matrimonial Lawyers, the desire of more individuals to get married later in life means that individuals are bringing greater individual assets into their marriages.
Prenuptial agreements are also popular with individuals getting married for a second time, since concerns about children from those prior relationships as well as concerns about separate assets factor into the equation here. When developed alongside wills and trusts, couples can walk away with important components of an estate plan. The reason to approach all of this planning together is that trusts and prenuptial agreements are considered contracts and can therefore override a will or give legal grounds to contest an existing will. Headed into remarriage? This is an important time to review all your estate planning materials.
Be Careful When Modifying your Will in Illinois
A Last Will and Testament is the most well-known estate planning document. A Will is used to distribute property to beneficiaries at death and make other end-of-life wishes known. Today there are many more options to efficiently handle these matters--like use of a living trust. But even with the expanded choices, the Will remains the most commonly used estate planning tool.
Illinois law is very specific in identifying the exact requirements that must be met for a Will to be deemed valid. The Illinois Probate Act of 1975, lists those requirements, which include that the will be in writing, witnessed and signed at the same time by two individuals who are not beneficiaries under the will, that the testator have the capacity to sign the Will at the time, among other formalities. It is quite common for Illinois residents to hire an attorney to draft a Will. Failure to do so often results in a Will being rejected by the court at the very time when it is needed.
However, even those who have the aid of an attorney when drafting a Will can later make the mistake of modifying the document without legal guidance. This is usually an error that can result in the document being rendered ineffective and assets distributed via intestacy rules against the actual wishes of the testator. There are formal requirements that must be met even when modifying a Will.
Think Before You Act
A common mistake is for someone to take a Will created by an attorney and simply write changes on top of the older document. Will those changes be upheld by the court? Unlikely. Changes or additions to a Will, usually referred to as a "codicil," generally must meet the same signature and witnessing requirements as the a new Will itself. Those requirements are safeguards to minimize the risk of fraud or deception. As such, crossed out names, changed bequests amounts, or other handwritten adaptations to a previously signed Will must not be made haphazardly.
Protecting Your Pets with a Trust
Throughout the ages domesticated animals of all types have been considered companions, pets, and even members of the family. The specialty markets that provide products for pets have continued to expand as people continue to redefine the position their pets hold within the household. As a continuing testament to that, Illinois, under 760 ILCS, Sec. 15.2., offers trusts for domestic or pet animals.
As with any estate planning, trusts are a viable option to protect your assets, and with that, your loved ones, including your pets. Generally, a ""Trust" means a trust created by will, deed, agreement, declaration or other written instrument. Within that trust is a designated "Trustee" who provides for and regulates the administration of trusts. Pursuant to the Section 3 of the Act, "[a] person establishing a trust may specify in the instrument the rights, powers, duties, limitations and immunities applicable to the trustee, beneficiary and others and those provisions where not otherwise contrary to law shall control, notwithstanding this Act." Thus, the trustee of the trust is granted specific powers either through the Trust and Trustees Act, or, if not in contradiction with the Act, then in accordance with the specific sections of the trust which a qualified estate planning attorney can assist you in creating. The "Beneficiary" of the trust is simply a person or persons who benefit from the creation of the trust. In the case of a Pet Trust, your pets would be the beneficiaries.
Conducting a Year End Estate Planning Review
With the New Year on the horizon, now is a great time to review all of your estate planning documents and get them updated. Don't let this important review pass you by-if your circumstances have changed at all you need to revise your documents. To ensure that your materials are up to date, set a yearly calendar reminder to look them over before the new year starts. If you need changes to your documents, reach out to an estate planning attorney today to get your appointment scheduled. Skipped making your will and other documents last year? Now is a great time to get your house in order.
Another reason that the end of the year is a great time to conduct an annual review on your documents is that when there are changes in federal or state law, they tend to take effect starting in January. This upcoming year is no different, as there are several changes in estate planning law that are coming in 2014. Starting in January, 2014, the amount of tax free transfers to family in a lifetime is increasing by $90,000. Doing your annual review now allows you to speak with your estate planning attorney about changes that might affect your documents or your estate.
Why Just Having a Will is Not Enough
Everyone knows that they must get a will before it is too late. Those who know better know that a will alone is simply not enough. It is true that having a proper will is an important tool in preparing for death, but it is only one in a set of tools that an estate-planning attorney has.
The estate-planning attorney uses these tools to achieve their clients' objectives. This is especially important for larger estates that may have several overarching interests.
One goal may be privacy. If a will goes through probate pursuant to the Illinois Probate Act, it will be a public document, allowing anyone to have access to it. This could create conflict in cases when a family member was left out of the will or gets a smaller portion of the estate.
One goal may be continuity. For example, if most of the assets are tied up in a business or some other venture that one may want to continue after their death, they leave sufficient assets to a trust, which would avoid probate and use the trust funds to continue the business. The trust then would pay any income that it earns from its investment to the family members until a specific event occurs, e.g., the children turn a certain age.
Different Kinds of Trusts and Their Uses
If you have property or assets that you want to leave to your heirs, then you have several options. A trust can shield these assets from taxation and also probate. It allows you to protect your legacy and control your wealth. They are essential to good estate planning so it is important to know what they can do.
There are two types of trusts. The first is a living trust, which is called that because it is active during the grantors lifetime. A living trust can either be revocable or irrevocable. A revocable trust can be changed at any time in the grantor's lifetime. If a relationship, circumstances or your intentions change then it is not an issue. But while it does avoid probate, a revocable trust is subject to estate taxes.
An irrevocable trust is the opposite. It immediately transfers your effects out of your estate and into a separate legal entity. There is no way to change your mind or use these assets because they are not yours anymore. Benefits of an irrevocable trust is that it can avoid probate and estate taxes.
