Estate planning might sound like something only the wealthy need to worry about, but it’s actually important for everyone, especially families. If you live in Illinois and have a family, there are a few key things you should know to ensure your loved ones are taken care of when you’re no longer around. Let’s break it down in a way that’s easy to understand.
First off, what is estate planning? It’s basically making a plan for what happens to your stuff after you die. This includes your money, property, and even who will take care of your kids if they’re still minors. Without a plan, the state decides these things for you, which might not align with your wishes. So, estate planning is about making sure your family is protected and your assets go where you want them to.
A will is one of the most important documents in estate planning. It lets you decide who gets what after you pass away. You can also name a guardian for your minor children in your will, which is crucial if something happens to both parents. Without a will, the state decides how to distribute your assets according to Illinois law, which might not reflect your personal wishes.
Trusts are another tool in estate planning that can be very beneficial. While a will goes into effect only after you die, a trust can manage your assets while you’re still alive and continue after you’re gone. Trusts can help avoid probate—a legal process that can be time-consuming and costly. They also offer privacy since trusts aren’t public record like wills.
Life is unpredictable, and there might come a time when you’re unable to make decisions for yourself due to illness or injury. That’s where a power of attorney (POA) comes in.
This document allows you to appoint someone you trust to make medical decisions on your behalf if you’re unable to do so. It’s important to discuss your wishes with this person ahead of time so they know what you’d want in different situations.
Similarly, a property power of attorney lets someone handle your financial matters if you’re incapacitated. This can include paying bills, managing investments, or even selling property if necessary.
Illinois has its own estate tax separate from the federal estate tax. As of now, estates valued over $4 million are subject to this tax. Proper planning can help minimize the tax burden on your heirs.
Life changes—marriages happen, kids are born, people get divorced or pass away. It’s important to review and update your estate plan regularly to reflect these changes. At a minimum, aim to review it every few years or whenever there’s a major life event.
Some assets like retirement accounts and life insurance policies pass directly to beneficiaries named on those accounts and aren’t controlled by your will. Make sure these designations are up-to-date and aligned with your overall estate plan.
In today’s digital age, don’t forget about digital assets like online accounts and social media profiles. Consider how you’d like these handled after you’re gone and include instructions in your estate plan.
While it’s possible to create some estate planning documents on your own using online tools, working with an attorney who concentrates in estate planning can provide peace of mind. They can help ensure everything is set up correctly according to Illinois law and tailored to meet your family’s unique needs.
