When asked, most people will admit to understanding the importance of having an estate plan in place as well as understanding the purpose of an estate plan. Despite this, over half of all Americans do not have a plan in place. One of the most commonly given reasons for the lack of planning boils down to the simple fact that estate planning is a rather mysterious concept that can be intimidating for the uninitiated. In an effort to encourage more people to get started with their estate plan by taking some of the mystery out of the process, the estate planning attorneys at Hedeker Law, Ltd. have put together some basic information they think you should know.
Your Estate Plan – Why You Need One and What It Can Accomplish
A better understanding of all the things an estate plan can accomplish for you may help motivate you to create your plan. Although the primary purpose of your estate plan may be to ensure that your estate assets are distributed to the beneficiaries of your choice in the event something happens to you, your estate plan can accomplish much more than this. Your plan can also help you plan for the possibility of becoming incapacitated by allowing you to designate the person, or persons, who will make health care and personal decisions for you and/or control your assets during a period of incapacity. Your estate plan can also help your estate avoid probate which saves your loved ones both time and money. Strategic estate planning helps your estate assets grow over the course of your lifetime, decreases any tax exposure your estate may have, and coordinates with your retirement planning goals and strategies. It can also ensure that you will qualify for Medicaid as a senior to help protect your retirement nest egg if you ever need to pay for long-term care. These are just a few of the additional benefits of creating an estate plan that goes above and beyond simply distributing your estate assets.
You Can’t Be Too Young or Too Poor to Need an Estate Plan
Among the most common myths about estate planning are the beliefs that you need to reach a certain age or familial status or that you need to amass a valuable estate before an estate plan is warranted. Put simply – not true. Every adult can benefit from at least a basic estate plan. Yes, as you expand both your family and your assets you may need to also expand your estate plan; however, it is never too early to get started.
Your Estate Might Qualify for an Alternative to Formal Probate
Probate is the legal process that is required after the death of an individual. Probate ensures that our estate assets are identified, valued, and eventually distributed to the intended beneficiaries and/or heirs. Probate can be time-consuming and expensive; however, your estate might qualify for a small estate alternative to formal probate that saves time and money. If you include probate avoidance strategies in your estate plan it is much more likely that your estate can avoid formal probate.
A Will May Not Be Your Best Choice to Distribute Your Assets
Most people immediately think about executing a Last Will and Testament when they envision creating an estate plan. While you should always have a valid Will in place, it may not be your best choice as your primary estate planning document. Instead, a trust may be the better choice for several reasons, including:
- Assets held in a trust bypass the probate process, meaning they can be distributed immediately if the terms of the trust dictate.
- A trust can protect your minor child’s inheritance given that a minor cannot inherit directly from the parent’s estate.
- A trust can help with tax avoidance as well as asset protection.
- A trust allows you to stagger disbursements instead of giving a beneficiary a lump sum of money or valuable assets before the beneficiary is truly capable of handling the inheritance.
Contact Estate Planning Attorneys
Please download our FREE estate planning worksheet. If you have questions or concerns regarding the estate planning in the State of Illinois, contact the experienced estate planning attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.