If you are one of the millions of Americans who have yet to get started with inheritance planning, there is no time like the present to get started. Like many of your fellow procrastinators, you probably have not started on your plan yet because you don’t know how to get started. It sounds easy enough in the abstract; however, when you actually sit down and try to put together an inheritance plan, it becomes much more complex and confusing. This is one of the many reasons why you should work closely with an experienced inheritance planning attorney when you do decide to move forward with your plan. Toward that goal, the inheritance planning attorneys at Hedeker Law, Ltd. have put together some common inheritance planning steps you may wish to follow.
Your Inheritance Planning Steps
Just as every estate is unique, the exact steps you take when creating your inheritance plan will be unique as well. Nonetheless, there are some common steps most people take when they are contemplating an inheritance plan, such as:
- Define your goals. Before you can really get started with your inheritance plan you need to sit down and define your estate planning goals. Ensuring that you do not leave behind an intestate estate may be your primary incentive to create your plan; however, you will likely have related goals you wish to achieve with your plan as well, such as incapacity planning.
- Assess your assets and liabilities. You undoubtedly have a pretty good idea of what your net worth is; however, when you start focusing on the details of your inheritance plan you will need details relating to your assets and liabilities as well. The easiest way to handle this is to make two lists – one for assets and one for liabilities. Include as much information as possible by each entry so your Executor can use the lists as well when the time comes to probate your estate.
- Identify beneficiaries and special bequests. Your primary beneficiaries are easy – spouse, children, family and friends; however, you may also want to add a charity or even your family pet once you really think about it. Also, start thinking about specific bequests you wish to make, such as leaving family heirlooms to specific children.
- Choose your fiduciaries. Do not make the common mistake of appointing fiduciaries, such as your Executor or a Trustee, without taking the time to really consider who is right for the position.
- Protect your minor child’s inheritance. If you are a parent, keep in mind that your minor child cannot inherit directly from your estate. It is crucial that you include tools, such as a trust, to protect your child’s inheritance until he/she reaches the age of majority.
- Avoid probate. This will become more important as your estate, and your family, grow. Probate can be costly, both in terms of time and money. Fortunately, there are several tools and strategies that you may be able to use to help your estate avoid probate. The key is to limit your probate assets because not all assets are required to go through probate. Commonly used assets that bypass the probate process (non-probate assets) include:
- Assets held in a trust
- Certain types of jointly held property
- Proceeds of a life insurance policy
- Assets held in an account designated as “payable on death (POD)” or “transfer on death (TOD)”
- Most retirement and pension accounts
- Think about your own incapacity. A comprehensive plan will also contemplate, and plan for, the possibility of your own incapacity. Who do you want to take over your assets and make decisions for you in the event you are incapacitated at some point in the future?
- Consult with an experienced inheritance planning attorney. Once you are ready to sit down and put your inheritance plan together, you need to consult with an experienced inheritance planning attorney. Do not make the mistake of trying to DIY your inheritance plan. The DIY forms you find on the internet will almost always create problems for your loved ones when it comes time to actually probate your estate. The relatively small account of money you save now could end up costing your loved ones a small fortune in legal fees down the road.
Contact an Illinois Inheritance Planning Attorney
For additional information, please download our FREE estate planning worksheet. If you have questions or concerns regarding inheritance planning, contact the experienced Illinois inheritance planning attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.