The Basics of A Living Will | Illinois Estate Planning Lawyer

Estate planning can be daunting, even to the most seasoned money-maker and mover. Setting up an estate plan is admitting mortality, and many people shy away from it solely because they fear what it implies. Yet having an estate plan shouldn’t be looked at as preparation for death—it's preparation for the lives of your loved ones after you're gone. There are several aspects of estate planning, and each step of the way can be a complicated one. The most important first step is to contact an estate planning attorney who can walk you through the process. 

One aspect of estate planning is a living will or a health-care proxy, which, according to CNN Money Magazine, is also known as an advance medical directive. A living will is a "statement of your wishes for the kind of life-sustaining medical intervention you want, or don't want, in the even that you become terminally ill and unable to communicate," according to CNN Money Magazine. Many people fear becoming so ill that their lives are only sustained by artificial means such as life support, and would rather check out, so to speak, than breath through an apparatus. Others would rather hold out hope until the very end. The only way to let your loved ones know legally which you'd prefer is through a living will.

According to CNN Money Magazine, "most states have living will statues that define when a living will goes into effect (for example, when a person has less than six months to live). Illinois has an actual Living Will Act, which finds "that persons have the fundamental right to control the decisions relating to the rendering of their own medical care, including the decision to have death delaying procedures withheld or withdrawn in instances of terminal condition." The Living Will declaration for Illinois can be filled out and kept with a family member in the event of catastrophe.

Living wills are only one part of estate planning. Don't attempt it alone. Contact a dedicated Illinois estate planning lawyer today.

Image courtesy of FreeDigitalPhotos.net

Make Estate Planning Part of Your New Year's Resolutions

StaciMany people make the new year the start of their new resolutions, whether they want to lose weight, save more money, or improve other parts of their lives. A recent Press & Guide article points out that one often-overlooked aspect of life is estate planning. As we move through the first part of 2013, take some time and make one of your resolutions to engage in some estate planning that will help carry out your wishes and save your surviving family members from some headaches in the long run.

You may think it is sufficient to avoid formal estate planning if you have listed another person as beneficiary on your bank accounts, life insurance policies, and 401(k) and other investment accounts. The major problem with using the beneficiary designation as an estate planning tool is the risk that a beneficiary predeceases you. If there is no beneficiary designated, and you have no will or other estate planning document in place, then state law will dictate how the proceeds of your account or other asset is divided among your heirs, whether that is what you intended or not. The bottom line is that if you want to be certain that your assets are distributed according to your wishes, then you need to take all necessary steps to ensure that your plans are carried out.

Another common problem with beneficiary designations is that people tend to forget to change them as major life events occur. Marriage, divorce, adoption, and death are all important reasons to review your beneficiary designations on all of your accounts and other assets. Otherwise, you run the real risk of having your assets distributed to your ex-wife, your deceased father, or excluding your newly adopted child from your estate altogether. These situations can result in some ugly and lengthy legal battles following your death if you do not take all steps necessary to avoid them.

As your Naperville estate planning attorneys well know, solely relying on the beneficiary designation as your estate planning device is simply not enough to ensure that your wishes are followed with respect to the distribution of your property. Contact our law office today and set up an appointment in order to devise an estate plan that you can depend on to carry your wishes.

Highlights of ATRA Benefits

The online publication Financial Planning recently reported on the benefits of the new American Taxpayer Relief Act of 2012 (ATRA), which have now gone into effect.

The first benefit highlighted by the report is the provisions for estate and gift tax. Unlike the prior law, which relied on sunset provisions with constant uncertainty surrounding federal tax policy, the new law's provisions are permanent.

Permanence of portability of the federal estate tax exemption for married couples is also offered under ATRA. This means that if the first spouse dies and the value of his or her estate does not require the use all of his or her federal exemption from estate taxes, then the amount of the exemption that was not used for the deceased spouse’s estate may be transferred to the surviving spouse’s exemption so that he or she can use the deceased spouse’s unused exemption plus his or her own exemption when the surviving spouse later dies.

The new law maintains unified gift and estate tax treatment, meaning that the exemption may be used for lifetime gifts or bequests at death. On January 11, 2013, the IRS announced that adjusted for inflation, the applicable exemption amount for 2013 is $5,250,000. Without the new law, the federal estate tax exemption was scheduled to return to its 2003 level of $1 million. The $5 million exemption amount is in place for the foreseeable future.

The new law contains no restrictions or limitations on the use of grantor retained annuity trusts (GRATS) and also placed no restrictions or limitations on the applicability of valuation discounts to intra-family transfers of business interests.

With all the new laws, it's important to consult with a qualified estate planning attorney to make sure that you and your family are receiving the best benefit of these laws.