Alzheimer’s Researchers Want Increased Funding

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More than 5 million Americans suffer from Alzheimer’s, a progressive brain disorder that leads to the eventual loss of memory, reasoning and intellect.  According to Centers for Disease Control and Prevention (CDC) statistics, it is the sixth leading cause of death in the United States. While numbers rise for newly diagnosed cases, funding for research to combat the disease is not materializing fast enough.

The National Institutes of Health (NIH) reports an estimated $562 million in funding for Alzheimer’s research in fiscal year 2014. The Alzheimer’s Association estimates that the cost of care will exceed $200 billion this year and reach $1.2 trillion by 2050. A survey of 170 leading biomedical scientists released this year by BrightFocus Foundation, a Maryland-based nonprofit, revealed that:

  • 91 percent of respondents believed funding shortages are related to scientist retention in research
  • 96 percent of those surveyed saw limited funding as a deterrent for attracting new scientists to the field
  • 94 percent of the survey participants felt that the lack of funding is an obstacle to advances in research

Last year, the Illinois Health Department awarded more than $100,000 in Alzheimer’s research grants. Illinois taxpayers have freely contributed more than $4 million to Alzheimer’s research efforts since 1986. Those funds supported 166 research projects. With laws such as the National Alzheimer’s Project Act (NAPA) and legislation introduced in Congress (S. 709/H.R. 1507) bringing attention to Alzheimer’s issues, one can only hope that increased funding is not far behind.

If your family has been impacted by Alzheimer’s, contact an experienced Wheaton, Illinois attorney handling elder law and estate planning issues. Capture and protect your intentions for future care and the well being of your loved ones.

Why do I Need a Will?

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If you do not have a lot of money or assets, you may be wondering why it is important for you to have a will. However, a will is not only for the rich. You do not have to be rich to feel that you have something of value.  Perhaps it is a precious belonging that you want a certain person to have. If you do not have a will in place, you will not have a say in how things are managed once you are gone.

A will can be changed as your life changes. According to CNNMoney it is a good idea to review your will periodically, particularly if your marital status changes or if your family expands. It is also recommended that you review your named beneficiary on any retirement such as any IRA and 401 (k) accounts, as these will automatically be transferred upon your death.  If your beneficiaries are deceased or no longer in your life, you want to ensure your assets transfer to those you care about most.

Even if you do not have material assets, a will is important if you have minor children. In your will, you can assure that your wishes for the guardianship of your children is clearly reflected.

Even if you have a trust, a will goes hand in hand with the trust.  A trust will stipulate how assets are distributed and to whom; a will is still necessary in the event you have assets that were not placed in trust in order to determine how those assets are distributed upon your death.

Some people feel that they have plenty of time to address these matters. The thought of planning for one’s death does evoke happy thoughts. However, being prepared helps make the transition easier and smoother for those left behind. If you have questions about types of wills or if you are in need of a will, contact an Illinois Estate Planning attorney.

How IRAs Affect Retirement Planning

People often wonder what type of IRA best suits their needs. The answer depends on a person’s short and long term goals, and on their individual and family circumstances. IRA stands for Individual Retirement Account, and as the name suggests, it is an investment vehicle designed to ensure income during retirement. They were first introduced in 1974, with the passage of the Employee Retirement Income Security Act (“ERISA”). 26 U.S.C. § 7701(a)(37). Since the introduction of IRAs, Congress has acted to increase the contribution allowed.

RigersAlthough there are several types of IRAs, the two most popular are Traditional IRAs and Roth IRAs. Both types of IRAs have their benefits and limitations, but they can be invaluable tools if used properly. Contributions to Traditional IRAs are tax deductible, subject to annual contribution limits. Contributions to Traditional IRAs can result in significant tax benefits, especially for people in higher income tax brackets. Additionally, transactions within the IRA are also protected from taxation. Withdrawals are generally subject to income tax, but there is presumption that the contributor will be at lower tax bracket during retirement.

Conversely, contributions to Roth IRAs do not provide the ability to deduct contributions from income. However, withdrawals are exempt from income tax, which means that any appreciation in value between the time of contribution and time of withdrawal will be tax exempt.

Both of these instruments have limitations on the amount one can contribute and when distributions are possible. Although one may contribute as much money as one wants to either type of IRA, there are specific rules that govern how much one can contribute tax free. Distributions can happen at any time, but unless certain conditions are met, distributions before the age of 59 ½ could result in significant tax and early withdrawal penalties.  Because the rules governing the taxation of contributions and  distributions from IRAs are very complex, it is important to obtain assistance from a tax advisor or estate planning attorney.

While IRAs are important retirement planning tools, the rules governing them are complex and an experienced estate planning attorney should assist with reviewing these strategies in conjunction with the overall estate plan. At the Law Office of Cynthia Hayes Hutchins, P.C., we have over 25 years of experience estate planning, and we are ready to answer any questions that you may have.

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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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Different Types of Trusts

There are several aspects of estate planning, and while independent research can help to begin the process, the most important first step is to hire an experienced estate-planning attorney. While determining what type of trust or will is best for you can be begun on your own, navigating the subtle differences between them is best done with the assistance of an attorney.

Attorney Cynthia HutchinsThere are five different types of trusts that can be used when beginning estate planning, according to CNN Money Magazine. A trust, according to Fidelity.com, “is a fiduciary agreement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.” A trust specifies how you would like your assets to be passed on to the people who you have designated as beneficiaries, and differs from a will because it deals only with specific assets owned by the trust rather than an overall plan for your estate upon your death.

The first type of trust, according to CNN Money Magazine, is a credit-shelter trust. This is also known as a family trust, in which you designate “an amount to the trust up to but not exceeding the estate-tax exemption.” The rest of your estate can then be passed to your spouse upon your death tax-free. Another type of trust is known as a generation-skipping trust, which “allows you to transfer a substantial amount of money tax-free to beneficiaries who are at least two generations your junior—typically your grandchildren.”

The next type of trust, according to CNN Money Magazine, is a qualified personal residence trust, which “can remove the value of your home or vacation dwelling from your estate.” This type of trust is very useful if your home “is likely to appreciate in value.” Another type of trust is called an irrevocable life insurance trust. It can be helpful when your heirs need money quickly after you are gone, for example, to keep a family business running. The fifth type of trust is a qualified terminable interest property trust, which is particularly useful if “you are part of a family where there have been divorces, remarriages, and stepchildren.”

Determining which type of trust is best for you is only one aspect of estate planning. When you are ready to begin planning for your family, the most important first step is to seek the counsel of a lawyer. Do not go through the planning process alone. Contact an experienced DuPage County estate-planning attorney today.

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Funeral Plans as Part of an Estate

Funeral Plans as Part of an Estate IMAGEPart of estate planning invariably involves making plans for a funeral. Many estate plans involve the notion of a pre-paid funeral, but unless the specifics are laid out with the assistance of a qualified estate-planning attorney, a pre-paid funeral could end up being a “grave error,” at least according to AARP Magazine. In some cases, such as that of Mississippi resident Evie McComb, a person will purchase a pre-paid funeral, file away the paperwork without alerting his or her family to the decision, and after his or her death, the paperwork will not surface. As was the case with McComb, the surviving family ended up paying for what had already been paid. “Evie’s daughter, Johnnye Denman, presented the document to the funeral home and asked for a refund,” according to AARP Magazine. “Too late, they said.”

According to the National Funeral Directors Association and as reported in AARP, “the average price of a burial with vault is about $8,000.” That is a lot of money for your family to come up with upon your death, but it is a directive that can be included with other important money plans. According to a publication from Ohio State University, the costs of dying include a funeral, a gravestone and cemetery plot (or cremation costs), and any medical expenses that might be incurred if the person dies in a hospital. Your specific wishes for your funeral and where the money will come from to pay for it can be explicitly laid out in your estate plan, making a frustrating and sad scenario like McComb’s impossible.

One way to set up funeral plans in an estate plan, as the executive director of the Funeral Consumers Alliance Josh Slocum told AARP Magazine, is to set up a “payable upon death” bank account. “It will earn interest, be available for an emergency, and still provide financial support to your family when you pass away,” according to AARP.  However, payable on death accounts may create unintended consequences.

Determining how funeral costs will be covered is only one step in estate planning. Do not go through it alone. Contact an experienced Illinois estate-planning attorney today.

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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

Lucy

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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