Ten Tips on Organizing Your Important Papers

shutterstock_1487900288Organizing important paperwork is the first step towards getting your affairs in order.  I pride myself on being organized, and I want to pass on some of the wisdom I have acquired during my many years of practicing law.  It may seem like a daunting task to get your affairs in order and papers organized, but if you follow these simple steps you will find the process can be easy and pain-free.  Here are ten steps you may consider for organizing your important papers and make sure everything goes smoothly if something happens to you:

1—Find all of your original estate planning documents (Wills, Powers of Attorney, Living Wills, Trusts, Life Insurance Policies) and make a listing of those documents.  On the list make a note of where you keep your originals and where you keep your copies.

2—Make a list of your assets (real estate, investments, bank accounts, investment accounts, long-term care insurance, retirement plans, life insurance, and any high-value personal property, jewelry, artwork, family heirlooms, and automobiles).

3—Put together a list of the full legal names, addresses, and phone numbers for your emergency contacts and people that are named in your documents as Executors, Trustees, Guardians, Agents, and Beneficiaries.

4—Gather copies of your Beneficiary Designation Forms for all of your life insurance policies and retirement accounts.  Make sure that those Beneficiary Designation Forms are on file with the life insurance companies and/or the retirement plan administrator.

5—Gather the appraisals for your valuable art and jewelry and assess whether those need to be added to your homeowner’s insurance policy.

6—Give your healthcare providers copies of your Healthcare Power of Attorney, Living Will, and other health-related documents and ask that they are placed into your electronic medical records.  Keep copies accessible in the event of an emergency situation.

7—Put together a password listing and keep it secured (under lock, password protected on your computer, or use a secure password protection program).  Make sure loved ones know how to access this list if something happens to you.

8—Make sure that the people that are named in your documents as Executors, Trustees, Guardians, and Agents are comfortable filling those roles if something happens to you.  Consider if you are comfortable giving copies of your documents to those individuals, and if so, provide copies to those people.

9—Make sure that your Agents, Executors and/or Trustees have access to your original documents in the event of your death or disability.

10—Pat yourself on the back for accomplishing steps 1-9 above and knowing that you will have made your life easier, as well as making a difficult situation easier for those who will be assisting in the event of your disability or death.


image002            All our lives have been significantly impacted by the COVID-19 pandemic.  For many of us, it has put us in touch with our own mortality, and we realize how a serious illness or death can affect our loved ones, even beyond the tremendous emotional toll.  Who do we want to make our healthcare decisions if we are incapacitated?  What are our wishes for end of life care?  How do we want our estates distributed after our deaths?

Making sure our documents and estate plans are in order may be one way to lessen the stress of this difficult time.   Practicing law during this pandemic has brought its own challenges.  Fortunately, modern technology allows us to continue to work with clients in writing, over the phone, and by video conference calls.  Certainly, such communication methods do not replace the comfortable setting of in-person meetings.  However, creative solutions to the practice of law make working remotely more successful.

One way in which the State of Illinois has helped is that Governor Pritzker recently signed an Executive Order which allows documents to be finalized, witnessed, and notarized by recorded video conference sessions.  There are many specific and technical requirements to ensure that the documents are properly finalized, but at least we have a way to help people finalize their estate plans during this time.   While many things in life must wait, at least we can support our clients during this pandemic with these additional tools.

If you would like to book a conference call or virtual meeting to discuss estate planning, wills, trusts, special needs planning, end of life planning, estate or trust administration, guardianship, elder law or Medicaid planning, please contact us at 630-510-0600.  We look forward to helping you with all such legal needs during these uncertain times.

Charitable Trusts in the Time of Giving

charitable trust IMAGEWith taxpayers owing such a high percentage of taxes on almost any type of long-term gain, in addition to other taxes –such as the Medicare surtax – those in the top tax brackets might consider establishing charitable remainder trusts for donations of highly-appreciated assets. A charitable trust is a trust established for some charitable purpose. Charitable trusts are limited in what they can do; they must fit into a certain category established by the law.

 Setting up a Charitable Trust

In order to establish a charitable trust, you must first create the trust and donate the property to the trust that will eventually pass to a charity that is approved by the IRS. The trustee will manage or invest the property to produce an income. A charitable trust can pay the person who established the trust a certain percentage of the income that was made from the trust over an agreed upon payment timeline.  After the person that established the trust passes away, the charity becomes the owner of the property.

 Why establish a charitable trust?

An income tax deduction may be available for the value of the property given to the charitable trust. The IRS will consider the value of the property and the amount of income you may receive from the trust in determining your deduction.

In addition to receiving tax benefits, remember that you are also doing something beneficial for an organization that works to put a little extra good in the world.  Current laws make charitable trusts irrevocable. Hence, while you may be able to obtain a cash flow from the property for the remainder of your life, the property cannot be sold later or given to an heir. The administration and management costs associated with charitable trusts should be carefully considered.

Charitable trusts are a great way to give back to your community, and gain a benefit for you as well. If you have any questions regarding charitable trusts, or any other estate planning questions, reach out to an experienced Illinois attorney today.


The Importance of Not Relying too Heavily on Portability

portability IMAGEIn 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 into law. As part of this law, significant modifications were made to the rules governing federal estate taxes, gift taxes, and generation skipping transfer taxes. Additionally, the law also introduced the concept of “portability” of the federal estate tax exemption between married couples for the 2011 and 2012 tax years. Additionally, last year, President Obama signed the American Taxpayer Relief Act into law. Under the provisions of that law, portability of the estate tax exemption between married couples was made permanent.

 Defining Portability

Portability is a valuable addition to estate tax laws because it allows a surviving spouse to use any unused federal estate tax exemption of the predeceased spouse. Portability may allow some couples to pass significant wealth without complicated estate tax planning.

 Why You Should Be Careful

The unused part of the exemption inherited by the surviving spouse is called the deceased spousal unused exemption (DSUE) amount. Although portability provides some safety for couples that did plan their estate in the traditional way, portability does have some drawbacks that the traditional type of planning with marital trusts does not.  Here are a few:

  • Assets passed on to the surviving spouse can use up more of the tax exemption in the surviving spouse’s estate due to appreciation;
  • If a surviving spouse remarries, and the second spouse predeceases, the surviving spouse will lose the unused exemption amount;
  • The appreciation in the assets after the death of the first spouse is taxable in the estate of the surviving spouse;
  • Federal estate tax returns must be filed for the estate of the first deceased spouse in order to reserve the DSUE amount.

Although portability can provide some streamlining of the estate planning process, every client should meet with an experienced estate planning attorney to discuss the advantages that these new provisions may provide for estate planning. If you have any questions regarding the planning of your estate or the impact that portability may have upon your estate plan, an experienced Illinois estate planning attorney can assist you.


Legal Issues Surrounding Lost Art

 adverse possession IMAGEA recent Hollywood-like story out of Munich is setting the stage for some interesting issues regarding estate planning and the rights of heirs. In a raid on the home of Cornelius Gurlitt in Germany, the police found over 1,000 paintings, drawings, and other works of art packed alongside hoarded groceries.  Among the art discovered were works by Beckman, Picasso, Matisse, and Renoir – all taken from Jewish collectors in Nazi Germany.  According to an article from the Chicago Tribune, the art stashed away in Gurlitt’s house could be worth over $1 billion.

 The Nazi Regime and “Degenerate Art”

The art found in Gurlitt’s home was previously possessed by Gurlitt’s father, who helped Adolf Hitler sell art that had been stolen or quickly sold off by Jewish collectors throughout Europe. The Nazis categorized many great works of art as ‘degenerate’ and sold them on the open art market to provide additional wartime funding. Despite human rights organizations and Jewish groups around the world calling on Gurlitt to unconditionally return the art to their rightful owners, the German newspaper Der Spiegel reported that he has no plans of returning the artwork to those who owned the pieces sixty years ago.  Instead, Gurlitt said, he plans on spending his life with the paintings.

Legal Issues

How is it that Gurlitt is allowed to keep art stolen by Nazis?  Due to the sheer enormity of the find by German police officers, there is no legal precedent for what to do with all of the art. While many believe that the art should simply be returned to those who lost it during World War II, the solution is not that simple.  First, a statute of limitations may exist barring collectors who lost their work from making claims against Gurlitt.  A statute of limitations is a legally prescribed time limit in which a lawsuit may be filed in court.  Second, some are already claiming that Gurlitt owns the art through adverse possession.  Adverse possession is a way in which someone else may acquire ownership of property so long as a number of requirements are met, including ‘openly’ using the property so that the true owner is put on notice.

While in the U.S. the doctrine of adverse possession primarily applies to real estate, in Germany it can apply to art as well.  Hence, even if someone who lived under Nazi rule could show that they had lost their property to Hitler’s regime, after decades of the art being in someone else’s possession, any claims for restitution may be barred.

Sometimes the law regarding property ownership and the rights of heirs can be complicated, even nonsensical.  It is therefore important that you make sure all of your assets are accounted for and your estate is planned.  If you have any questions regarding your estate, contact an experienced Illinois estate planning attorney today.

Estate Planning for Those with Special Needs

According to the Special Needs Alliance, approximately 57 million adults in this country suffer from some form of a diagnosable mental illness. Excluding those illnesses caused entirely by substance abuse, almost 5 percent of those 57 million suffer from a serious mental disorder that causes substantial interference with daily and major life activities. Some of the disorders included in this list are schizophrenia, bipolar disorder, depression, manic depressive and dementia.

Typically, adults who suffer from these serious illnesses or other special needs disorders are unable to sustain consistent employment, and they receive government financial aid to cover their medical needs and other living expenses.

 When parents of special needs children set up their estate plan, careful attention needs to be paid to all aspects of how these plans will affect their children once the parents have died. An error or oversight could have serious consequences and cause the child to lose thier government aid.

Many legal experts suggest the first thing parents of special needs child should do is write what is referred to as a “letter of intent”. In the book, More than a Mom, a book written by a mother with a special needs child, the author shares a sample letter of intent. Included in the letter are lists of people who should be contacted if something should happen to the parents, the child’s current life situation, education, medical care, employment, behavioral management, social life and the identity of guardians or trustees named in estate planning documents.

Choosing the right attorney is critical to setting up any future planning. Make sure you choose an attorney who is familiar with setting up a Special Needs Trust. These trusts are set up so that your child’s government aid will not be affected.

Life insurance held by parents with a child with special needs must be carefully tailored in the planning process. Upon a parent’s death, the funds can be used to ensure that the child’s future needs are met, protecting the quality of care that is required. It is again critical that the beneficiary on the policy be updated if a Special Needs Trust that has been set up to protect any financial aid the child receives.

Making sure your child with special needs will be properly taken care of if something should happen to you is a great concern to parents. The rules and laws can be complicated. That is why it is important to have an experienced DuPage County estate planning attorney help you plan for the future.

Keeping Track of Beneficiary Designation Forms

There are many assets such as bank accounts, brokerage accounts, insurance policies, annuities and retirement funds that allow a beneficiary to be named on the account. In the event of the account owner’s death, those funds go directly to the person named, avoiding a lengthy probate waiting period. An article in the Wall Street Journal highlighted the importance of keeping accurate and up-to-date documentation of those who have been named as beneficiaries and the serious issues that can arise if beneficiaries are not updates.

 beneficiariesFor example, it is important to remember that despite who is designated in a will, it’s the person named as the beneficiary on the account, policy, etc., who will receive the funds. It’s all too common for people to forget the beneficiary they named on as beneficiary on accounts opened years ago. Your will may be written so that your entire estate is left to one person, but if someone different is named as beneficiary on your bank accounts,the beneficiary on the accounts will receive the funds, not the person named in your will.

Another common oversight people make is forgetting to update beneficiaries when an event such as a death, marriage, or divorce occurs. Financial experts point out that it’s important to choose a beneficiary when you roll over a 401k or an IRA to a new plan or to a Roth IRA because the person who you had previously designated does not automatically carry over to any new accounts.

Experts also advise against choosing a different beneficiary for multiple accounts. For example, if you have three children and each one is the sole beneficiary on three separate accounts and the accounts experience different rates of growth over the years, there will be an unequal distribution of assets upon your death. It may be advantageous to designate all three children as equal beneficiaries on all three accounts.

Careful consideration should be given before naming a minor child as a beneficiary without a trust in place. If a trust is not in place and a minor child is the beneficiary, the court will appoint a financial guardian over those funds until the child becomes of legal age. In addition, not all young adults of legal age are fiscally mature enough to handle a large sum of money responsibly.

Trusts for disabled children and disabled adult children should be set up as supplemental trusts so as not to interfere with any government assistance these children receive. Keeping your beneficiaries up to date and setting up the most strategic estate plan requires the guidance and knowledge of a DuPage County estate planning attorney.

Problems with Deathbed Planning

End-of-life preparations are not easy, even when an experienced estate planning attorney is involved. Things become even more complicated when one makes said preparations later in life. In these cases, the probability of disputes from the beneficiaries increases because of the suspicion that elderly people are prone to undue influence.

 Thus, litigation may follow whenever a person makes drastic changes to their will shortly before dying, especially when they disinherit family members for the benefit of non-family members.

Even high-worth individuals may encounter difficulties with their estate plans. Take the case of the copper mining heiress Hugguette Clark, who left behind an estate worth nearly $300 million.

Ms. Clark died at the ripe old age of 104.

She spent the last two decades of her life in a hospital, where she was cared for at $400,000 per year. In 2005, she executed a new will that disinherited most of her distant relatives, and gave significant sums to people involved in her everyday care, including her lawyer, doctors, hospital, goddaughter and her nurse (who received several millions dollars).

However, another will that was in existence only six weeks prior to the new will had left her distant relatives nearly $30 million. Needless to say, the sudden and significant change would cause even the most trusting of minds to be suspicious.

The relatives, who were disinherited in the second will, filed suit to void the second will. They argued that the non-family beneficiaries took advantage of their close position with Ms. Clark to exert undue influence on the elderly person. The beneficiaries of the new will, on the other hand, argued that Ms. Clark seldom spoke to her distant relatives and that her decision to execute the new will reflected her appreciation for the care and dedication that her caregivers had shown toward her.

The dispute ended in a tentative deal that included the distant relatives in the distribution scheme and excluded her lawyer and nurse (the doctor relinquished his portion of the inheritance).

An experienced Illinois estate planning attorney can assist clients with addressing these types of issues. If you have questions regarding your estate plan, or the will or trust of a recently departed family member, contact an attorney today.

Estate Planning and Marriage

Estate planning is important for determining the distribution of assets after death. However, property distribution after death can become a contentious issue that creates deep schisms in the family and can lead lengthy litigation. Fortunately, proper planning can avoid these issues.

RigsTake the case the hypothetical of Jim and Ann. Jim and Ann spent most of their lives married to one another. They had three children who are now adults.

Eventually, Jim and Ann got a divorce and lived separately. As Jim became older, he required around-the-clock care by an experienced nurse. As time passed, Jim and the nurse grew closer, with Jim eventually asking the nurse to marry him. Only a few months after the marriage, Jim passed away from a long illness. To his family’s surprise, Jim’s attorney revealed that Jim had revoked his old will and had intended to execute a new one; however, he passed away before doing so. Jim’s estate planning attorney also revealed that Jim left an estate worth $4 million.

Under these circumstances, Illinois inheritance laws dictate that half of the property would go to Jim’s spouse (despite them only having been married for a few months) and the other $2 million to his three children. It is easy to see why such a distribution scheme would invite legal challenges.

Jim’s children would likely challenge the distribution through a collateral attack on the marriage. They would argue that the judge should declare the marriage as invalid because Jim lacked the capacity to consent to the marriage due to his old age and deteriorating health. They could also argue that the nurse used her position as Jim’s caretaker to gain his confidence and manipulate him into marrying her.

Independently of the outcome in Jim’s case, estate planning can avoid many of these issues. An experienced Illinois estate-planning attorney would have surely recommended that Jim execute a prenuptial agreement prior to his second marriage and a new will contemporaneously with revoking his old one.


My Will is Better than Yours

A good estate plan includes a will. Wills are an efficient way to distribute property according to the person’s intent and avoid family fighting at the time of distribution. Wills have been around for a long time, and are part of the tool set of every experienced estate-planning attorney. A common, but serious mistake that people make is to use generic wills that they find online. Wills found online are problematic because they may not comply with the Illinois Wills statute and may leave gaps in the property distribution.

RigsAn experienced Illinois estate-planning attorney on the other hand, will have a personal relationship with her clients and ensure that wills reflect the nuances of each individual case. After drafting the will, the attorney will guide the client through the process of reviewing, revising, and executing the will.

An experienced Illinois estate-planning attorney will make sure that will execution process meets the requirements of the Illinois statute governing wills. First, the person executing the will must be at least 18 years old and must be of sound mind. The issue of sound mind is problematic when elderly people execute or amend wills, because unless done properly, these wills are open to challenges based on allegations of unsound mind.

Second, the will must be in writing and the person must sign it in front of two or more witnesses. There has been extensive litigation surrounding the finalization of wills. An experienced estate-planning attorney will make sure that there are no doubts about the validity of the will signing ceremony.

Revoking or amending a will also must follow a set of rules with which a local attorney is well acquainted.

For a will to be valid, it must follow a set of rules. An experienced Illinois estate-planning attorney will make sure the wills are appropriately and validly drafted for your individual situation; contact one today.