One of the most common explanations people offer for why they do not have an estate plan in place is that they simply do not know where or how to begin. Given the fact that most estate planning terms, concepts, and strategies are completely foreign to anyone outside of the law, this explanation is completely understandable. It is, however, important for every adult to have at least a basic estate plan in place. With that in mind, the Lincolnshire estate planning attorneys at Hedeker Law, Ltd. offer a brief explanation of the most common documents you might include in your initial estate plan.
Last Will and Testament
Most people use a Last Will and Testament as the foundation of their initial estate plan. Executing a Will ensures that you will not leave behind an intestate estate. Dying intestate means the state decides what happens to your estate assets using the state intestate succession laws. Instead, your Will allows you to make specific and/or general gifts to loved ones. In addition, your Will lets you appoint someone as the Executor of your estate. The Executor is responsible for overseeing the administration of your estate. Finally, your Will offers you the only opportunity you have to officially nominate a Guardian for your minor child should one ever be needed.
Trusts were once used predominantly by wealthy families to protect and pass down the family fortune. Today, however, trusts are commonly found in the average estate plan. A trust is a relationship where property is held by one party for the benefit of another party. A trust is created by the owner, also called a “Settlor”, “Trustor” or “Grantor” who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories, testamentary and living trusts. A testamentary trust does not activate until after the death of the Settlor whereas a living trust takes effect as soon as all the trust agreement is in place and the trust is funded. A living trust can be further divided into revocable and irrevocable living trusts. A trust can help achieve a wide variety of estate planning goals and can even serve as the foundation of your estate plan if probate avoidance is desirable.
Throughout the course of your lifetime, you will make many decisions regarding your own health care. There may come a time, however, when you cannot make those decisions because of your own incapacity. An advance directive helps you plan for that possibility. The State of Illinois recognizes two types of advance directives, including:
- Illinois Statutory Short Form Power of Attorney for Health Care – allows you to name someone as your Agent to make decisions about your medical care if you can no longer speak for yourself. The form lets you set down your wishes regarding organ donation, life-sustaining treatment, burial arrangements, and other advance-planning issues to help your agent make these decisions.
- Illinois Living Will — allows you to direct that, if you are suffering from a terminal condition death-delaying procedures will not be utilized to prolong your life. The Illinois Living Will is limited to this instruction and is not effective if you have an effective power of attorney for health care.
Power of Attorney
A power of attorney allows you to appoint someone as your Agent to act on your behalf in legal transactions. There are two types of power of attorney, general and limited. A general power of attorney (POA) gives your Agent almost unfettered authority to act on your behalf, meaning your Agent can engage in financial transactions on your behalf, enter into contracts in your name, and sell your assets. A limited POA, on the other hand, only gives your Agent the specific authority indicated in the POA agreement. If you make any POA durable it means that your Agent’s authority will survive your incapacity. If you make any POA durable it means that the authority you grant to your Agent will survive your incapacity.
Contact Lincolnshire Estate Planning Attorneys
For more information, please join us for a FREE estate planning seminar. If you have additional questions or concerns regarding estate planning, or you are ready to get started on your plan, contact the experienced Lincolnshire estate planning attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.