Monthly Archives: April 2013

Appointing a Guardian for Your Children

Estate planning is not just about deciding where your money will go. When planning for your family after your death, your assets are not the only things about which you will need to decide. Especially if your children are young, you will need to take into consideration what will happen for them upon your death. It may seem morbid to think about, but planning ahead is far less morbid than not having a plan—which leaves your family to make decisions without you. Naming a legal guardian in the event of your death, if your children are minors, is an important part of estate planningAppointing a Guardian for Your Children IMAGE

According to IllinoisLegalAid.org, a “guardian is a person who has been appointed by the court to handle the personal or financial affairs of another person.” Many parents opt to appoint a trusted relative or friend as the guardian of their children. It is important that the person who you prefer to have as your child’s guardian is trustworthy and close to the child—this person will be handling all the financial, as well as day-to-day, decisions in your child’s life if you are unable to do so. If your child is developmentally disabled and relies solely on you, even if your child is over 18 you will need to consider naming a legal guardian. According to IllinoisLegalAid.org, “many important decisions may need to be made concerning matters such as health care, living arrangements, and habilitation.”

According to CNN Money Magazine, “if you die without a will—a status known as intestate—you leave it up to the court to decide who will take care of your child.” First-time, young parents often name their own parents as guardians of their children, which can be a good decision at an early age, but given the fact that grandparents usually die before their children this may need to be amended at some point thereafter.

If you or someone you know is beginning estate planning, do not go through it alone. Contact a dedicated Illinois estate-planning attorney today.

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Estate planning is essential

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Make sure that important documents are easily accessible to those who will need them.

Among other things, an estate plan helps to distribute your assets when you pass away. If your children are under 18 at the time of your death, you can name your chosen guardian in your estate plan. Sometimes, all you need is a simple will, however, if your life and finances are complicated, then your estate planning will most likely also be complicated.

If you have done some estate planning in the past, it is important to keep your documents up to date. Adoptions, births, marriages, divorces, and other life changes can require updates to your estate plan.

Estate planning documents are very important, and should be carefully safeguarded.  It is very important that the individuals you name to handle your legal affairs know where you keep the original documents.  Often, it is helpful to provide copies and instructions to those individuals in advance.

Estate planning documents that you may need during your lifetime include your Power of Attorney for Healthcare and Property and your Living Will. It is very important to give copies to those who you named in those documents as your agent, and health care directives should be given to your physician for inclusion in your medical records.

If you have also set up a Living Trust, you will want that document readily available and also accessible to the person whom you have named as your successor trustee as well. It is helpful to have a listing of assets owned by the Trust updated regularly.

The executor of your will should know where your original will is kept, along with any additional instructions, for example, your funeral arrangements.

If you have any questions or concerns about your estate planning, contact an estate planning attorney today. The Law Offices of Cynthia Hayes Hutchins, P.C. can help you with your estate planning in DuPage County today.

Bequeath Your Frequent Flier Miles and Points | Illinois Estate Planning Lawyer

Many people do not know that many travel and credit-card programs allow customers to pass on their frequent flier miles and points to heirs. However, it is not an easy process, according to an article in the Chicago Tribune.

Illinois estate planning lawyer(Leevi) The average American household has signed up for almost 20 programs. U.S. households earned slightly over $600 a year of points and miles, studies show. Customers who wish to bequeath their points to beneficiaries should first decide whether to include them in a will. Furthermore, it is best to ensure that your executor knows how to access your account number and email address associated with the loyalty program. You should always obtain the help of an experienced lawyer in order to create an effective and enforceable will.

All the rules and regulations can make point transfers complicated. In one case, the airlines needed a copy of the deceased’s death certificate and a letter from the executor. Other loyalty programs can have even more restrictions. For example, the Marriott Rewards program allows point transfers only to spouses or domestic partners. Hilton Honors points expire after a year of inactivity.

There is no IRS guidance on airline, hotel or credit card points. However, according to the IRS, your “gross estate includes the value of all property you own partially or outright at the time of death.” Additionally, it can be very difficult to evaluate some kinds of loyalty points because their value changes depending on their use.

It is in your best interest to sort out the details of your will with the help of a capable lawyer. If you or someone close to you is considering drawing up a will, please contact a highly skilled estate planning attorney in DuPage County today.

Transferring the Family Home to Your Children

UntitledThe act of passing on the family home is no longer as simple as just handing over the deed to your children. According to Smart Money magazine, “there are nearly a dozen ways to give a home to your child. And a couple are tax-free.” Yet to make this kind of exchange or transfer possible, it cannot be done last minute, and definitely needs to happen before you are no longer able to handle your affairs. “In order for the transaction to work properly,” according to Smart Money, “you’ve got to plan ahead.” The most important first step of planning is to hire an estate planning attorney to begin the complicated process.

According to CNN Money Magazine, the federal estate tax exemption, the amount you may leave to heirs free of federal tax, is permanently set at $5 million, indexed for inflation. In 2013, “estates under $5.25 million are exempt from the tax. Amounts above that are taxed up to a top rate of 40 percent.” Rather than gifting the home to your children while you are still living there, states Smart Money, it is much better to stay in your home until you die, providing that your home is below the estate-tax exemption ($5.25 million). “Even if you pay a market-rate rent to your child, the IRS might argue the home’s full date-of-death value still belongs in your taxable estate.” This could leave your children with a higher tax burden than you intended.

Other options are to give the house as a gift to your children, but, according to Smart Money, “you will probably have to dip into your $5.25 million gift-tax exemption.” You can do this by using your annual $14,000 gift-tax exclusion—bear in mind that it is $14,000 per person, so if both you and your spouse gift the house to your child and his spouse, “you can offset $56,000 of the home’s value.”

Figuring out how to get your property transferred to your child is only one of the many complicated processes of estate planning. Do not go through it alone. Contact a dedicated estate planning attorney today.

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