Estate planning minimizes family disputes and often can be utilized to avoid significant tax liability.
What is Estate Planning?
Estate planning goes far beyond the protection that a will provides. It is a complete plan that not only outlines how you want your assets to be distributed, but also ensures that your wishes are carried out even if you become incapacitated prior to your death. Having a solid estate plan is the best legacy you can leave for your family. Meyers & Flowers in Illinois has helped many of it's clients set up their estate plans and are considered one of the best estate planning lawyers in Chicago.
Estate Planning Checklist
Creating a solid estate plan requires careful thought in coordination with an estate planning attorney, insurance underwriters, business partners and an estate tax accountant.
The following isn’t a comprehensive ‘To Do’ list, but serves to provide an outline of the things to consider when doing an estate plan. Having an estate planning attorney is your best insurance that your wishes will be honored and that your family will not be burdened with decisions they may not want to make.
Consider the following when drawing up your estate plan:
- Is my Will up to date?
- Is my Will up to date?
- Is there enough money to support my family upon my death?
- Who should manage my estate?
- Is there enough life insurance?
- What about obligations connected to my former marriage(s)?
- What about the children from my former marriage(s)?
- What about guardianship for my minor children or children with disabilities?
- Are all available tax saving strategies included in the estate plan?
- Is there a problem with succession of ownership of my business or farm?
- Should I have a buy-sell agreement with my partner(s)?
- Will there be sufficient liquid assets to pay taxes on my business or farm?
- Do I need a durable power of attorney to handle my finances?
- Do I need a living will?
- Do I need a durable power of attorney for health care wishes?
Discussing these issues with your attorney will ensure that there will not be any issues that your family or business partners will have to resolve; decisions that they may not be equipped to make.
Probate is a legal procedure that verifies the authenticity of a will and oversees the distribution of assets, payment of any debts and assesses probate fees. In cases where there is no will, the court will appoint an executor. In Illinois and many other states, probate is legally required unless there is a living trust which has been properly executed during your lifetime.
Most people try to avoid probate as it is a time consuming and expensive way to distribute assets and settle the affairs of the estate. Probate essentially involves clerical duties which are done by the executor and an administrative assistant of the probate court. It can take up to a year to settle affairs, particularly if assets need to be sold to pay creditors. Fees for probate can be 5% of the value of the estate which is can result in a significant sum of money.
An estate planning attorney in Chicago from Meyers & Flowers can construct an estate plan that can be executed upon your death which will avoid probate and ensure your wishes are respected.
Avoiding Estate Tax
Illinois allows a gift to be received of up to $4 million without incurring an estate tax. This is separate from the Federal Estate tax that provides an exemption of $5.43 million. Estates worth over $4 million must file a tax return although there may be no tax owing after deductions are calculated.
In large estates, careful planning in coordination with an experienced tax accountant is necessary to avoid overtaxing the surviving spouse or family member inheriting a large amount of money. Additionally Federal estate tax requires a different strategy to avoid paying more than is necessary. As the current federal estate tax rate is 40% of taxable assets, this step in estate planning is critical.
Preparing an Estate Plan
Once the plan has been finalized with your attorney, your accountant and any financial planners or business consultants, documents can be prepared and filed as needed. If a trust company will operate as the executor of the estate, our estate planning attorney will provide it with the relevant documents needed.
As time goes on it will be necessary to review the estate plan periodically so adjustments can be made when the law requires it. Tax code changes may impact any estate plan.
At Meyers & Flowers in Chicago, our estate planning expertise gives clients opportunities to minimize tax expenses and create effective plans for years down the road. With a focus on your best interests, Meyers & Flowers navigates the ever-changing world of tax laws and investment trends. With a personal understanding of your world, we educate and guide your decision-making process.