Attorneys At Law

Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

Attorneys At Law - Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

End of Life Planning – The Essentials

End of Life Planning

An unexpected medical diagnosis can leave a person in shock.

It can also leave a person realizing that their end of life planning is not in order and they may not have as much time as they thought to complete it.

When that happens, here is what we recommend:

 

Seek professional help

It might seem outside of your comfort zone, but seeking the help of a mental health professional for guidance could be helpful to you. It could also help your family as well.

 

Get financial documents in a single place

Social Security Retirement CoupleIt’s important to begin getting your financial documents together. We recommend you gather them all in a single place and put them together in an easy to get to a location such as a three-ring binder.

This will save your relatives the struggle of trying to find all the information they need.

Start by getting your will. If you don’t have one, make a list of your assets: financial accounts, real estate, and any retirement accounts.

A will is the best way to ensure your assets get distributed to the person you want them to. Without specifying your wishes, there can be family disputes and even court cases. Property distribution is best spelled out in a will

 

Choose your beneficiary

Loan Modifications and WorkoutsOne of your first tasks should be designating your beneficiaries on your financial accounts.

It may be basic but it is more powerful than a will. It can save time and money for your assets going through probate.

Your brokerage will let you attach transfer-on-death instructions to your non-retirement account. Transfer-on-death deeds can also be used in real estate in Illinois.

After you have designated beneficiaries, detail your liabilities, for example, mortgage, loans, credit card debt, and insurance policies for health, home, and vehicles.

Create a contact list of people your family can reach out to for help. This should include your lawyer, accountant, insurance agent and financial advisor. Write down the name and contact information of everyone who needs to be involved.

Even if you already have an estate plan, it is a good idea to consult with an attorney experienced in estate planning. In the time since you made your estate plan, laws may have changed or even your financial goals or beneficiaries.

 

Decrease the tax burden

Cook County Property Tax AssessmentsThere are ways that you can decrease the tax burden on your beneficiaries.

One way to leave money to heirs is through a Roth individual retirement account.

Another is a brokerage account because any capital gains tax will be wiped out due to the step-up in basis on the original price paid.

Here is how this works: If the owner sells a stock that has gained in value, they would have to pay capital gains based on that higher price. If the owner leaves that stock to an heir, the new owner receives the stock at the new price. They will only have to pay taxes on any gains in price after that point, not the original price.

If some asset has dipped significantly in value, though, you might consider selling the stock, mutual fund or ETF. As the original owner, you can deduct the losses by selling and deducting the loss. Your heirs are not able to take this step-down since they’d inherit the stock at a new, lower basis.

If you are older than 70½, take any required minimum distribution from your retirement accounts. Heirs may not know to do this, and there is a significant penalty for not taking it.

Another way to minimize taxes for your inheritors is through charitable donations. While your heirs would have to pay tax on the money in a retirement account, a charity would not.

 

Paying off a mortgage

Property Tax Assessment - CalculatorMany people consider paying off a home mortgage, but because individual circumstances vary greatly, this is not always the best course.

Consider the amount of funds available, the current tax bracket and the size of the mortgage balance. It would be a good idea to have a financial planner run several scenarios to see how you can minimize the tax hit from withdrawing a large sum from a traditional IRA or 401(k) plan – or if you should leave it as a loan to be transferred to your heirs.

 

Have a record of password for your heirs

Collect all of your passwords in your binder with your financial records. Include a copy of the previous year’s tax return. When a final tax return is prepared, there might be some carryover items, such as long-term alternative minimum tax or long-term gains buildup.

List all service agreements, such as landscaping, utilities, cleaning and insurance, and auto payments. Arrange for their continuation or cancellation.

Keep track of your pension and Social Security benefits, since there could be survivor benefits that flow from those.

Other areas to consider in your binder: arrangements for your pets and talking to the financial aid office if you have a child in college. You’ll want to inform them of your change in financial status.

 

Source: When end-of-life planning is suddenly a lot closer than you thought by Jill Cornfield for CNBC

 


The Law Offices of Lora Fausett P.C. provides excellent legal counsel in the areas of estate law, including estate planning, living wills, living trust, probate, power of attorney, letters of office and more.

Located in Glen Ellyn, Illinois and serving clients in DuPage, Cook, Kane, Will, and Kendall Counties.

For Information Call 630-858-0090

 


Can I Keep My Heirs from Having to Go Through Probate?

Probate law

In this post, we’ll discuss the probate system and the situations in which it can be avoided.

When a loved one passes away, you want to make sure their wishes are respected and that the intentions of their estate are carried out. Often though, these desires are difficult to deal with as you navigate through the court system.

What is probate?

Probate is the legal process where the estate of a decedent is transferred to heirs through a probate court.

If the deceased has a will, the probate process begins when the executor nominated by the decedent in the will, presents the will for probate in a courthouse in the county where the decedent lived or owned property.

If there is no will, someone must ask the court to appoint an administrator of the estate, usually the spouse or an adult child of the decedent.

The purpose of probate is to prevent fraud after someone’s death.

Probate is also a public notice of death and lets creditors file claims against an estate. After any creditors are paid, the remainder of the estate goes to the beneficiaries.

If there is not a will, the court will decide how to distribute the property. This is why it is so important to have a will.

Probate laws will vary by state and not all assets or estates need to go through probate. Some assets can transfer automatically at the death of an owner with no probate required.

Why avoid probate?

GavelIf the purpose of probate is to avoid fraud, then why would you avoid probate?

One reason to avoid probate is because it is a long process that can take six months to a year or more to settle with the state.

Another common reason is that people wish to avoid legal fees, which can cost thousands of dollars or to avoid public scrutiny because probate proceedings are open to the public.

How to avoid probate

Some assets can automatically escape probate and be paid directly to the beneficiary you have named. These include insurance policies, IRAs, retirement plans and some bank accounts.

Another way to avoid probate is if a couple has jointly owned property with “rights of survivorship”. Jointly owned assets will transfer to the surviving owner.

You can also avoid probate by having assets passed directly to your heirs by putting them in a revocable living trust.


The best solution is to speak with a trusted attorney who can help you craft a solution for your personal situation.

 


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The Law Offices of Lora Fausett P.C. provides estate law attorney services including estate planning, probate, living will and living trust services.

For Information Call 630-858-0090


Image sources: Probate letters – Gavel