Estate Planning Wishes: Have You Had “The Talk” with Your Parents?

estate planning wishes, Illinois Estate Planning LawyerFamilies may find it uncomfortable discussing estate planning wishes with their loved ones. No one likes to consider the day when his or her parents will no longer be around. However, not discussing one’s estate planning can have serious consequences. It is an all-too-common scenario when a person passes away—or becomes seriously incapacitated—without ever making important legal decisions.

If your elderly parents have not addressed these decisions, it is important to sit down with them and make plans to consult with an estate planning attorney to ensure their wishes are carried out. This is not always easy since parents often feel that these matters are private ones, even with their own children. They may also not want to make these plans because it reminds them of their own mortality. Yet keeping these factors in mind when approaching parents can help make the conversation easier.

One of the most important issues that should first be addressed are the plans regarding the care of your parents in the future. Questions such as whether or not the funds are available for them to live comfortably, as well as what plans are in place should long-term or permanent placement in a medical facility should become necessary, need to be answered. There should also be a medical directives in place, including someone appointed to make healthcare decisions should the need become necessary.

Once you have established medical and future care decisions with your parents, it is also important to really understand what your parents' wishes are; not only for medical end-of-life decisions, but also how they want their assets and property divided once they have passed. Sit down with your parents and gather all account and asset information. Check on who is listed as beneficiaries and make sure that these are still the individuals of whom your parents want these items divided.

Your parents will need to decide on a power of attorney to handle their finances should they become incapacitated. This is different than the medical power-of-attorney, but it is just as important. At the very least, your parents should have a will in place and may also want to consider setting up trusts in order to help alleviate any tax consequences for which their beneficiaries may be responsible.

If you or your parents need to address estate planning wishes, please contact an experienced DuPage County estate planning attorney—the first step to ensuring that the correct documents are drawn up to protect your family's future.

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.

The other type of trust is called a testamentary trust.  These kind are specified in a will document and only created after the grantor has died. The funds can be subject to probate and estate taxes but can accomplish a variety of goals.

One example is a bypass or credit shelter trust which can protect your estate from taxation.  It allows the transfer of the most money allowed without being subject to taxation and then moves the rest to your spouse completely tax free, even if the estate grows.  Another example is a generation-skipping or dynasty trust.  It allows the transfer of a sizable amount of assets tax-free to beneficiaries that are at least two generations removed, such as grandchildren.

If you are interested in leaving the most assets to your heirs, then you should consider setting up a trust.  Contact an experienced estate planning attorney in DuPage County who can suggest the best trust for your given situation.

An Estate Planning To-do List

Since the holidays are right around the corner, there are some things that you should start to consider for planning your estate. One reason to plan now is that laws will change on January 1, 2014, and certain trusts can allow you to leave assets to your loved ones without being lessened by taxes. To make the most of your hard work, make sure you take the time to complete your estate plan.

Starting in 2014, the federal tax free limit that people can transfer to successors will increase. The gift tax will is also set to increase. There are also many different tax breaks or exclusions that will change beginning next year. This is a good time to begin or review your personal estate plan with a checklist.

It is important to elect someone who will act in your best interest if you are unable to. If your health could be an issue in the future, nominate someone to have health care power of attorney and amend your living will, which will provide them with a guide. You can also elect a financial power of attorney, a guardian for any minor children and an executor of your last wishes.

Estate planning is the time to write down how you want your assets to be passed on to your loved ones. Your spouse might want to sit in with you as they will be one of your main concerns in this process. If you have any current documentation that controls your estate, this is a good chance to review it and make changes as you see fit.

If you have identified your main goals in your estate plan, it is time to seek a professional. It is important to have the expertise of someone who can translate your desires into a combination of trusts and scheduled gifting that will allow your estate to be transferred with a minimal taxed amount. An attorney can make sure that all documents are legally sound, and there will not be any hiccups when it it is too late for you to make changes. Contact an experienced estate planning attorney in DuPage County today.