Estate Planning

Estate Planning begins with a will or a living trust. A will provides your instructions as to who will receive your assets (beneficiaries), but it does not avoid probate. Any assets titled in your name or directed by your will (if the total value exceeds $100,000.00 in Illinois) must go through the probate process before they can be distributed to your beneficiaries. The process can become expensive with legal fees, executor fees, and court costs. It can also take anywhere from nine months to two years or longer. The probate files are open to the public and excluded beneficiaries are encouraged to come forward and seek a share of your estate. In short, the court system, not your family, controls the process.

Not everything you own will go through probate. Jointly-owned property and assets that let you name a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, etc.) are not controlled by your will and usually will transfer to the new owner or beneficiary without probate. But there are many potential problems with joint ownership, and avoidance of probate is not guaranteed. 

For these reasons a revocable living trust is preferred by many families and professionals. It can avoid probate at death (including multiple probates if you own property in several states), prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time.

Unlike a will, a trust doesn't have to die with you. Assets can stay in your trust managed by the trustee you selected until your beneficiaries reach the age you want them to inherit. Your trust can continue longer to provide for a loved one with special needs or to protect the assets from beneficiaries' creditors, spouses, and irresponsible spending.

A living trust is more expensive initially than a will, but considering it can avoid court interference at incapacity and death, many people consider it a bargain.

Under the living trust, the attorneys at Sidney B. Margolis, Ltd. will skillfully and creatively draft sub-trusts which will eliminate or reduce federal and state estate (inheritance) taxes.

There are additional ways to eliminate or reduce estate taxes, including, but not limited to, (1) making annual tax-free gifts and (2) creating an irrevocable life insurance trust. Under current federal law you can give up to $14,000.00 ($28,000.00 if married) to as many people as you wish each year, thereby removing assets from your estate. You can remove the value of your life insurance from your estate by creating an irrevocable life insurance trust and making it the owner (and usually beneficiary) or the policies. As long as you live three years after the transfer of an existing policy, the benefits will not be included in your estate.

An estate plan with the attorneys at Sidney B . Margolis, Ltd. includes a consideration of the need for the following documents: (1) health care power of attorney; (2) property power of attorney; and (3) living will