Will vs. Trust: Which One is For Me?

Will vs. Trust: Which One is For Me?

Will vs. Trust Which One is For Me? A common question in estate planning is do I need a Will or a Trust.  The simple answer is, it depends on what you want to accomplish.  Below we review the differences between a Will and a Trust and the benefits of each. What Does a Will Do? A will tells those you leave behind what you want to do with all of your property and assets.  If you have minor children you can also list the guardians you elect in the will as well.  Have a well written will can have many benefits, but it does not avoid probate. What is Probate? If you have assets valued at more than $100,000 that are not in trust or other instrument which avoids probate, then in Illinois then your estate will need to go through probate proceedings. Probate is the process for your estate to pay all its final bills and debts and for the remaining assets to be distributed to your heirs, either according to your will or, if none, according to state law.  This is done under the probate court’s supervision.  This process takes a minimum of 6 months to complete.  There are additional costs for attorneys fees and court costs. Benefits of a Trust 1) Avoid Probate 2) Provide for Minors 3) Avoid a Lump Sum Inheritance 4) More Privacy 5) Easier to Manage after Death Avoiding Probate When you create a Living Revocable Trust you can retain control of your assets while you are alive with the added benefit that aAll assets funded to the trust  do not need to go through the...
How the New Federal Tax Law Could Affect Your Estate Plan

How the New Federal Tax Law Could Affect Your Estate Plan

    Many people sign an Estate Plan and then lock it away in a drawer and never look at it again.  But every good Estate Plan needs consistent review to make sure it’s up to date with your current needs and current laws. Now is the time to take that Estate Plan out of the drawer and have it reviewed by your attorney. What is Estate Tax.  When assets are transferred after death they could be subject to an estate tax, both at the federal and state levels.  However, there are exemptions based on the value of the estate. The estate will be subject to tax on the amount that exceeds the federal or state tax exemptions. Portability. The concept of portability was introduced by the federal government in 2013. It allows a married couple the opportunity to use the full exemption for both spouses. For example, assume the federal tax exemption were $5 million. If Mary and John are married and John has an estate worth $3 million at his death, Mary could carry over John’s remaining $2 million of exemption and apply it toward her exemption at her death, making her federal tax exemption $7 million. Federal and State Estate Taxes.  Keep in mind, there are separate federal and state estate taxes and Illinois does not allow for portability. New Tax Act. The Tax Cuts and Jobs Act signed into law on December 22, 2017 brought with it great changes for estate tax planning. The new law eliminated taxes for many higher income families. It doubled the federal estate tax exemption from $5.6 million per individual...
Estate Planning for Digital Assets

Estate Planning for Digital Assets

What are Digital Assets? Digital Assets are any online account that you may own or any file you have stored on your computer or other digital device. This includes your online banking account, social media sites such as Facebook, LinkedIn or Twitter, your email account or websites you may own. They may be stored on a desktop, laptop, smartphone, ipad, tablet, flashdrives. The list is endless. If you are good about creating unique and secure passwords, then each account will have its own string of unique and complicated characters to access each. If you’re not good about creating secure passwords… you should be. The Issue When I ask clients if they have any digital accounts a vast majority say they do. When I ask them if something happens to them, where is the information for accessing those accounts, almost everyone points to their head.  “It’s all in here.”  But what happens when your unable to share that information when it’s needed? That’s where Digital Assets Planning enters. I have a Power of Attorney… Traditional estate planning is not enough to plan for Digital Assets. The laws have simply not caught up to the realities these assets have created.  Making things even more complicated, each service provider may have its own policies about dealing with these assets during incapacity or post death, or worse yet, they have no policies at all. That’s why proactive planning in this area should not be overlooked. Why is it Important? Identity Theft Identity theft is a prevalent concern and there are steps that should be taken to prevent this. When an individual become incapacitated,...