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Recent Blog Posts
New Portability Rules Affect Estate Planning
President Obama signed the American Tax Relief Act (ATRA) of 2012 into law at the beginning of this year, causing many revisions to estate planning code that will affect retiring Boomers in large numbers. According to Forbes, "one of the key provisions of ATRA is to make permanent to so-called portability of the applicable exclusions amount between spouses." The rules of portability greatly affect estate planning, according to Forbes, and should be considered with an estate-planning attorney. So what is portability? What does it do?
According to Forbes, the new laws regarding portability allow for the transfer of one spouse's unused estate tax application exclusion to the other upon the death of the first spouse. This means that the surviving spouse can use this tax application exclusion for gift or estate tax purposes, rather than it going to waste if it hadn't been used before the death of his or her spouse. "Any applicable exclusion amount of the first spouse to die that is used to reduce the estate tax liability of that spouse's estate tax reduced the amount of the excess applicable exclusions amount that carries over to the surviving spouse in the form of ‘deceased spousal unused exclusion amount,' or DSUE amount," reports Forbes.
Divorce Is the Dumps for Dads
Nearly 7 out of 10 divorces are initiated by women, according to a survey conducted by the AARP. This may be due to anticipated advantages women see in being single, rather than remaining married (a concept supported in a study titled "Child Custody Policies and Divorce Rates in the US," conducted by John Guidubaldi and Richard Kuhn). Coinciding with this figure is the figure of child custody awarded to parents based on gender; according to Divorce-Lawyer-Source.com, 70 percent of divorces involving children result in the mother getting custody.
When women anticipate that the courts will demonstrate a clear gender bias regarding custody, they expect to be the primary residential parent for the children and the recipient of the resulting financial child support. They may also expect to maintain the marital residence, receive half of all marital property, and gain total freedom to establish new social relationships. In Guidubaldi and Kuhn's detailed analysis of divorce rates, they conclude that acceptance of joint physical custody may reduce divorce. States whose family law policies, statutes, or judicial practice encourage joint custody have shown a greater decline in their divorce rates than those that favor sole custody.
Estate Planning: Do You Want To Leave a Digital Fingerprint?
Most everyone is familiar with the benefits of traditional estate planning, from articulating your desires in a living will to generating trusts or wills that explain what happens to your assets after you pass away. As people are increasingly active online, it's necessary to think about what might happen to your digital assets after you pass away. Everything from the photos on your Facebook account to the contents of your email inbox is worth considering. Failing to think about what should happen to your digital accounts and data after you pass away can lead to additional emotional trauma for family members in the wake of your death. Companies involved with digital data are increasingly cognizant of the role that stored information can play in family disputes or dissemination of information, which is why Google has created Inactive Account Manager. With Google's new tool, which just came out this spring, users can determine what happens to their data on their own terms. Using this program allows individuals to designate what will happen to any information or data connected with Google accounts- including everything from email to videos posted on YouTube. Users can name other individuals who will be notified about account deactivation, which you can set to occur anywhere from 3-12 months after the company identifies you as "inactive". Google will reach out one month before they official terminate your accounts, in the event that you're traveling or otherwise around. Beneficiaries, if you name them, will receive digital links to download any information that you have previously chosen to share. This way, digital memories can be kept alive if you wish, or you can have all of the information deleted. Other companies also offer what's known as online safe deposit boxes, where you can store information about account sign-ins and passwords, allowing beneficiaries to get information if they want or need it. Estate planning now reaches right into your computer screen. If you have questions about developing estate plans, contact our office today for a consultation.Image courtesy of Jomphong at freedigitalphotos.net
Wills in Illinois
Wills are often not thought of until people reach a very old age, but it is very important for even young people to have them. Not only are they used to distribute property and to name a legal guardian for children, they can also be used as directions for what to do if you are no longer able to speak for yourself in the hospital or after death.
Although states vary, in Illinois, if someone dies without creating a will, his or her property will be distributed according to state "intestacy" laws. These laws state that the property of the deceased will go to the closest relatives, beginning with a spouse and children, then moving to grandchildren or parents if you have no spouse or children.
If there is no relative of the deceased to claim the property, it will go to the state. This is only after all relative have been exhausted, however, beginning with siblings, grandparents, uncles, cousins and even to spouse's relatives.
People Who Meet Online Less Likely to Divorce
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Whole Life vs. Term Life Insurance
Life insurance policies come in several different types. The two main types of policies are term life and whole life. Within each are their own individual subcategories that are designed to suit differing individuals.
There are no definitive rules when deciding which type of policy is going to be the best for you. Although term life policies can appear cheaper and a more financially viable option to begin with this is not always the case. In the long run, researching and understanding the main differences between the two types of insurance can help you to make the most informed decision.
The length of the policy coverage is the main differentiating factor; whole life insurance covers you for your entire life whereas the duration of the coverage of term life depends on the particular terms of the policy. Term life will provide coverage for as long as you pay your premiums, there are term policies that have a fixed term such as 10 years, 20 years etc... Some insurance companies will also allow you to convert some or your entire insured sum into a whole life policy after a period of time or at the end of your term policy.
The Value of a Family Law Attorney
Even though divorces are not easy, couples have to make sure certain things are in place before filing for divorce. One of the most important decisions is whether to seek legal counsel. The answer is nearly always ‘Yes'. Among its many benefits, a family law attorney can remove emotion from the decision-making process, giving clients the ability to see the benefits of a particular course of action that would otherwise be lost in an emotionally charged situation. Yes, there are costs associated with having an attorney, and couples seeking a divorce must be aware that in Illinois one attorney cannot represent both couples. The Illinois Rules of Professional Conduct, which govern attorney practice, prohibit attorneys from representing two clients when there is a potential for a concurrent conflict of competing interests, which is common in divorces. It is not hard to imagine a situation where an attorney faces two potential outcomes, each favoring one spouse or the other, making it impossible for an attorney to act in the best interest of both parties. At times, couples try to avoid hiring two attorneys by having only one spouse hire one. The client then tells the attorney to draft the divorce documents that benefits both spouses equally. Even though this approach may work in uncontested divorces, it is easier said than done. Attorneys are trained advocates. They aggressively pursue what they see as the best outcome for their client, which makes it harder to be neutral in a setting riddled with competing interests. More often than not, even in uncontested divorces, the party with one attorney will likely be worse off than the party who has legal representation. Filing for divorce involves costs, including legal fees. However, the presence of an experienced Illinois family law attorney may avoid expensive legal headaches down the road and will ensure that you receive the best possible outcome in a divorce.Image courtesy of sscreations / freedigitalphotos.net
Tracking Down Delinquent Child Support
A $338 million Powerball winner in New Jersey has reignited a national conversation about child support, according to the CS Monitor, and brought to light some rather alarming statistics. In 2011, reports the CS Monitor, "12 percent of Americans were owed child support and did not receive it." When Pedro Quezada won the Powerball, it seemed as if he'd no longer have an excuse not to immediately begin making payments on the $29,000 he owed in back child support payments. According to the Department of Health and Human Services and reported by the CS Monitor, "Quezada is just $1,000 away from being part of the top 11 percent of arrears delinquents in child support owed." The figures go on and on. "For 13.7 million custodial parents on child support, there are 11.4 million cases on non-custodial delinquency." That's more than 83 percent. The cultural meme that a father feels like an ATM or is being taken advantage of paying undue child support may not be as prevalent as it feels. In fact, according to the CS Monitor, "around 70 percent of arrears owed nationwide is owed by noncustodial parents who have little or no reported income and thus is largely uncontrollable." The irony, and fear, speculated by the CS Monitor reporter is that now that Quezada can pay, his big winnings will only fuel the delusion of other deadbeat parents who think one day they'll get the big payoff, and can avoid paying child support in the meantime. According to the Chicago Tribune, the best way to collect child support that you're owed is through income withholding. The first step is to contact the Office of Child Support Enforcement. Keep in mind that tracking down child support payments may end up costing you money, as well as time. Be sure to factor this in to any payment you're expecting to get, and decide if the cost is worth it. The last resort in a worst-case scenario child support situation is to press charges. If you or someone you know is seeking delinquent child support payments, don't go through it alone. Contact a dedicated Illinois family law attorney today.
DOMA and Estate Tax Planning
On Wednesday June 26th, the United States Supreme Court ruled five to four that the Defense of Marriage Act is unconstitutional. The definition of marriage will now change to reflect the diversity of human life. There will also be far reaching affects concerning married couples when they plan their estates.
The first change concerns the tax break afforded to married couples which was the issue in the United States v. Windsor case. This is defined as the marital deduction which lets spouses that are US citizens transfer assets to each other without paying gift taxes or other federal taxes. But that was not the case for same sex couples because they could not be married under federal law. That is because under section three of DOMA, marriage is defined as the "legal union between one man and one woman" while a spouse is defined as a "person of the opposite sex who is a husband or a wife".
Preparing for Divorce
Divorce is a very scary and overwhelming subject, and if you have found yourself in the process of getting a divorce, there are some steps for you to take to help you prepare legally, emotionally, and financially.- Contact a family lawyer. Divorce is generally handled better by professionals. Contact a DuPage County divorce attorney to help guide you through the process of your divorce.
- Contact a therapist. Divorce can take a serious toll on your mental health. Find a therapist to provide you with support, who can help you grieve and begin to move forward.
- Get a post office box. It is best to choose a post office in a nearby town instead of your local post office. Start fresh and use this mailing address on everything relating to your divorce.
- Set up your own personal email account with a password your spouse does not know. Use this email for things related to your divorce and be sure to keep it private.
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