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Recent Blog Posts
The New Trend of Spiritual Estate Planning
Estate planning allows people to arrange the distribution of their assets upon their death. In these situations, there are often many people clamoring for ways to hold on to their departed loved one. Rather than allow unclear desires cloud a legacy, estate planning intends to honor last wishes. It also attempts to avoid any taxes which could decrease the assets held for dispersal to loved ones.
There is a new trend in estate planning, which has been especially popular with baby boomers. It is termed "spiritual estate planning" because it is based on a system of values that the planner wants to leave behind. An example of enduring values is leaving money to charity, which is up almost 20% from last year. These statistics have been collected by Charity Navigator, who monitors charitable donations.
Another example of this kind of estate planning is about how people are leaving or not leaving estates to family members. This can include second or third families if sons or daughters have remarried numerous times. Some people can choose to leave their estate to one child while cutting another child out of the estate altogether.
Estate Tax Slated To Change in 2013
According to the American Association of Retired People (AARP), "Congress hasn't made estate planning any easier with its ping-pong approach to the estate tax," and the federal estate tax rates are slated to change again in 2013. Finding a qualified and competent attorney is the most important step to begin estate planning. Not only can a professional help you to ensure that your inheritors get the most of your estate, but also help you to wade through the necessary and complicated paperwork and legalese. In 2010, the federal estate tax rate was zero—and has moved upward since. The New Year marks a new rate, unless Congress decides otherwise. Now's a better time than ever to begin the process.
Consider it a holiday gift to yourself and your family. According to the AARP, "until January 1, 2013, the amount of your estate exempted from federal tax is $5 million for individuals, $10 million for couples." These numbers don't include gifts of up to $5 million that are exempt before paying a gift tax ($10 million for a couple).
Illinois Housing Market Lower than National Average
At the end of September in Illinois, almost eight percent of home mortgage loans were delinquent. The state remains one of the worst in the nation for foreclosures, according to the Mortgage Bankers Association.
The quarterly delinquency survey was one of three reports that were recently issued that show the housing market in Chicago and the surrounding areas continue to remain struggling to pick back up. Foreclosure proceedings were started against 1.29 percent of Illinois homes, along with the addition to delinquent loans, in the third quarter. The percentage of loans in the foreclosure process totaled about 6.83 percent. This percentage of loans in Illinois that entered the foreclosure process was higher than any other state in the country, with the exception of New Jersey and Florida.
Of all mortgage loans nationally, 7.64 percent of all one to four unit residential properties were delinquent by the end of September. For judicial states like Ilinois, in which court systems process foreclosure actions, the foreclosure rate decreased a little bit to 6.6 percent. The rate for nonjudicial states is only 2.4 percent.
Common Estate Planning Mistakes
According to On Wall Street, there are a lot of people that make mistakes when they are planning their estate issues. If you are willing to take some time, you can get the most out of your planning and you will be able to understand what will happen to your money when you pass away.
Not Making a Plan
One of the biggest problems with an estate is not making a plan on where your money is going to go after you pass away. The reason this is hard for most people is because they have to admit they are going to die someday. This can be uncomfortable.
Doing It Alone
There is nothing wrong with using legal forms you may have downloaded from the Internet, but you may not know what kind of amounts you should send where. This can be hard for you to do alone and the help of a lawyer is usually needed for this part.
Not Knowing
There are sometimes that you may think you know exactly what you want to do until you get a better deal in front of you. Getting a lawyer to help you with this will open opportunities to you that you may not have ever thought was there.
What a Will Can and Can't Accomplish
A will is a guideline for your loved ones and, sometimes, the state where you live to fulfill your last wishes on earth. It is up to you to maintain those wishes in a legal document otherwise they could be decided for you by the state that you live in. The states desire to come as close as possible to the deceased last requests, yet their generalized approach often leaves something to be desired. In order to regain control over these last plans, it is integral to draft a will.
But what is the scope of a will? What does it do and what is outside of its grasp? The main goal of a will is to distribute property to family, friends, and other beneficiaries. There are certain restrictions that vary from state to state, which is why it is essential to review these documents with an experienced estate planning professional. For example, there are certain restrictions on property that falls of a probate estate, like joint property.
Previous Arrangements may Override Your Will
Having a will may not always be enough, according to an article in the Chicago Tribune. If you have made other arrangements, they may take precedence over your will. For instance, if you own a home jointly with rights of survivorship, the owners get the property when you pass on, no matter what your will says. Additionally, any property that has a named beneficiary (e.g. retirement and savings accounts, annuities and life insurance) goes to the beneficiary despite what your will dictates.
When making a will, it is very important to go over the details with an experienced estate planning attorney. You should bring your attorney a list of all your assets with named beneficiaries. If you want to change the beneficiary of any of your assets, the documents dictating the disposition of that asset need to be updated. If the documents have been signed by you and other people, it is necessary to get their permission first.
Property that is individually owned and without a named beneficiary passes by will. It is possible that all of your assets have named beneficiaries or are held jointly with rights of survivorship. In this case, you may not have any property that would pass by will. However, a will could become useful in any case. For example, you can name beneficiaries in your will for assets that you do not have yet but expect to get later. You can specify care arrangements for your children, and you can define how your personal property will be distributed.
Illinois Healthcare Powers of Attorney
A healthcare power of attorney is a legal document that allows an individual (the "Principal") to give another person (the "Agent") the authority to act on his or her behalf as far as decisions regarding healthcare. Under the Illinois Power of Attorney Act, this document can limit the authority of the Agent, specify when the Agent's authority begins and ends, detail the duties that the Agent's authority covers, and set forth any limitations on the Agent's authority.
One common provision of a healthcare power of attorney, for instance, deals with decisions about whether to give or withdraw life-sustaining treatment. If a Principal has certain religious beliefs that prohibit or discourage certain types of medical treatment, a healthcare power of attorney can leave various instructions for the Agent regarding those types of treatment should the situation arise.
The Basics of a Revocable Living Trust vs. a Will
There are two different tools of estate planning which sound the same but serve different purposes beyond leaving behind property to beneficiaries. The two types of documents that can leave behind your wishes are living trusts and wills. Not only can both name beneficiaries to property, including young children, but both are revisable as your wishes change throughout your life. The ability to revise a document is also termed revocable in legal terms.
The difference between a trust and a will are in smaller details. For example, with a trust, you have the ability to avoid probate altogether. Probate is the very lengthy process of testing if a will in valid so that the property can be transferred to the new owners. The process itself is lengthy and expensive. A trust can also reduce any beneficiaries from contesting the estate in court because the integrity of the trust is absolute.
The Technical Aspects of Probate
Taking care of your material possessions is important if you have loved ones that need to be protected. If you have drafted a will, then whoever you assign as your personal representative will be in charge of whether probate court is necessary in regards to your remaining estate. If you have not designated one in a will, then the probate court may assign someone impartial to manage your estate. This person will then be responsible for your earthly goods to make sure they are legally transferred to others.
The probate court acts to oversee your property after your death. While all probate courts are different state to state, there are some processes which remain the same. The probate court swears in your personal representative to manage your estate. The court also is in charge of notifying your heirs, creditors and others that you are indeed, dead. They also inventory the property of the estate to verify that the assets are still real and have not been dispersed. The ultimate step of a probate court is to pay off debts, pay applicable taxes, and distribute the remaining estate to the heirs.
Childless People Benefit Greatly from Powers of Attorney
Susan Sommers is a fashion consultant in her sixties. She has a sister but no children or husband. Her sister Louise is likewise childless. Together they took care of their mother who died a while ago at the age of 94. The sisters made sure that their mother's rights were upheld and her needs were properly addressed. But what will happen to Susan Sommers or her sister, when they can't take care of themselves or each other any longer?
The problem doesn't concern only the Sommers sisters. Nowadays, there are more childless people than in the past. In 2010, almost 19% of 40-44-year-old women were childless, almost 9 percentage points more than in 1980.
Children are usually the "de facto" caregivers of their parents, if they become incapacitated or otherwise require assistance with matters the parents can't cope with themselves. But childless people obviously don't have that alternative. That is why it's important that especially people without children secure their rights with the help of professional lawyers. In Illinois, it's possible to appoint someone you trust to make healthcare decisions on your behalf or to take care of your financial and property affairs in the event of your incapacity. Your "agent" can be almost anyone, from family members to friends and neighbors. Legal documents can also detail many types of other preferences, for example, a particular type of assisted living facility. Without the documents, a court appointed guardian might take control of your affairs and not necessarily make decisions you approve of.
