Category Archives: DuPage County

Common Mistakes To Avoid When Planning Your Estate

Estate planning can be a daunting task. If you do it right, your family will be well cared for long after you are gone. Without an estate plan, your family could be scrambling to pick up the pieces and paying expenses that would not be necessary with an estate plan. According to AARP Magazine, there are some simple but common mistakes people make when beginning to plan their estate. With the availability of online and do-it-yourself documents, many think hiring an attorney is a waste of money. In fact, one of the most important parts of estate planning is the assistance of someone familiar with the complicated legalese you will have to wade through. Retaining an experienced estate planning attorney could end up saving you and your family both money and frustration.

LisetteAccording to AARP Magazine, one common mistake people make is “failing to tie your business to your estate plan.” As one attorney told AARP, “parents sometimes do not want to talk to their kids about it and just leave the business to the kids.” This method does not take into consideration how to provide for children who work outside of the business. Sometimes failing to adequately plan for a family or small business means that the business ends up being sold under market, and distribution is not always uniform.

Another common mistake is to leave lump sums of money in cash instead of in a trust. A different attorney told AARP the anecdote of a father who left $250,000 “to his heroin-addicted son, who was penniless six months later.” A trust, according to AARP, “stipulates how you want the property distributed… the trustee holds your property and doles it out per your instructions.”

A third common mistake is failing to keep your estate plan updated. “Each time the law or your family changes,” reports AARP, “revisit your estate plan.” Even with all this, the most important aspect of estate planning is retaining an experienced estate planning attorney. Do not go through planning your estate alone. Contact a dedicated Chicago-area estate-planning firm 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.

Long-Term Care Planning

When you are ready to think about your financial future and what it means for your family, drawing up an estate plan is essential. It is a complicated process with plenty of room for mistakes and omissions, and hiring the help of a qualified estate planning attorney is important. As you begin to think about your estate plan, one major aspect is long-term care planning, which may be necessary for potential future illness or disability. The National Clearinghouse for Long Term Care Information defines long-term care (LTC) as “a range of services and supports you may need to meet your health or personal needs over a long period of time.” The Clearinghouse was developed by the U.S. Department of Health and Human Services to help Americans get a grip on what it means, and to help families get started—but again, no website or information bank is a substitute for an estate planning attorney.

DuPage County Estate Planning AttorneyAccording to the Clearinghouse, “almost 70 percent of people over 65 need LTC.” In 2008, that was 21 million people in America. Many people put off planning because “they do not want to think about a time when they might need it.” However, putting it off can leave you without the LTC services you need and leave your family in a difficult situation. When you begin to plan, according to the Clearinghouse, there are some major considerations to make. You cannot predict how much money you will need, or what type of care you will require, but you can make educated guesses based on personal factors, housing considerations, and assistive technology.

Personal factors, according to the Clearinghouse, include how old you are now and your family history. If you have a disability, LTC may need to begin earlier. “Between ages 40 and 50, on average, 8 percent of people have a disability that could require long-term care services.” Housing considerations include an evaluation of your home to determine if it will be appropriate later on—is it one story? Would you need to make modifications in the event of a disability? Assistive technology refers to devices that you may need that help you communicate or move. Is there a good chance you will need special software? A walker? These can cost money, and should be taken into consideration when beginning to plan for your LTC. You can work with your estate planning attorney to determine how you will pay for the care you will need, whether it is an in-home caregiver, or living in a care facility. It is important to discuss with your lawyer the available assets and resources you have for your long-term care needs.

Long-term care is just one aspect of estate planning. It is never too late—or too early—to begin planning. Contact a dedicated estate planning attorney today.

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New Tax Laws for Estate Planning

TaxesThe end of 2012 saw a flurry of gifting in order to avoid proposed estate taxes by the government that was set to begin in 2013.  This was part of the fiscal cliff tax increases which also affected income taxes, payroll taxes and others.  Now that the rules are more settled after the enactment of the American Taxpayer Relief Act, it is a good time to plan your estate.

Now, the amount excluded from estate taxes is $5.25 million per person and can be doubled for couples to $10.5 million.  This is a limit that is set to be adjusted by inflation by $130,000.  A good estate plan can even limit taxes for amounts above that exemption by setting up trusts suited for your needs.   This is a lot more than the $1 million limit that was going to be law if the US government did nothing to stop the fiscal cliff.

There are also new tax limits for gifting to individuals, estate tax, and generation skipping transfers. Currently the highest rate for this tax is 40% which is a kind of compromise from the rate in 2012 to the initially proposed rate in 2013.  It increased from 35% in 2012 but is still less than the 55% rate after the expiration of Bush’s tax cuts.

Since these changes are more certain it is an opportunity to move money around to benefit from investments and other appreciating assets.  An estate planning lawyer will be able to review your current situation to make sure that gifting and trusts provide the most benefits to you and your family.  Contact an experienced estate planning attorney in DuPage County today to begin this important process.

Tax Laws and Estate Planning

Estate planning continues to evolve as federal and state laws change over time. A recent Financial Planning article highlighted the significant impact of the fiscal cliff tax deal on the world of estate planning.

  One of the hallmarks of the tax deal was making the estate tax $5.12 million exemption permanent. Furthermore, the exemption is now adjusted with inflation, and is now portable between spouses. The practical effect of these changes is that the vast majority of individuals, except those with extreme amounts of wealth, will never fear the federal estate tax again.

For most Americans, tax cuts enacted in 2001 have now become permanent, which means that their tax rates will continue unchanged. For wealthier individuals, however, income taxes may be significantly higher. For instance, Congress has developed a new 20% tax rate on dividends and capital gains. A 3.8% Medicare tax will apply to investment income. Additionally, itemized deductions and personal exemptions will now phase out at incomes of $250,000 for single individuals and $300,000 for married couples who file a joint income tax return. It is estimated that in some cases, individuals could face a combined tax rate of more than 50%.

Fortunately, careful estate planning may be able to alleviate some of these higher taxes for wealthier Americans.  While this goal often may be achieved, it can be a complicated process that may require estate planning attorneys, clients, and investment advisors or trustees to coordinate their actions so as to avoid any costly moves.

Charitable giving is another way that individuals may be able to avoid some increased taxes. Although the itemized deduction for charitable giving does phase out at higher incomes, the deduction could still be used to offset at least some gains. Some of these benefits also may be realized through the use of charitable remainder trusts, to which the new Medicare tax does not apply.

These are only a few examples of ways in which some of the new taxation can be eliminated or at least minimized. Of course, individuals also need to mindful of state estate tax requirements, which may also significantly impact their estate planning techniques. Due to the complexity of these new laws, it is essential that you consult with an experienced Illinois estate planning attorney. Contact your Wheaton estate planning lawyer today for a comprehensive evaluation of your estate planning needs and goals, and the assistance that you need in making those goals a reality.