Estate Planning – What is It?

Chicago Estate Planning | Illinois Estate PlanningEstate planning is more than executing a Last Will & Testament – also known as a Simple Will.  Estate Planning is the process of planning for the accumulation, conservation, and ultimate distribution of an individuals assets – money, tangible and intangible property, business interests, etc.  Estate planning may also involve achieving estate tax reduction and probate avoidance.

The purpose of estate planning may include:

  • identifying opportunities to address specific personal and family situations;
  • incorporating safeguards for the security and preservation of assets;
  • identifying difficult inheritance issues and incorporating planning strategies to cure and resolve those issues now (rather than placing the burden on someone else to resolve those issues later);
  • assuring the appropriate mechanisms are in place for their future security of the family or specific beneficiary; and
  • providing for the orderly management and distribution of assets in the event of disability or death.

The cost of planning an estate may initially seem prohibitive but the future savings derived from a thoughtful, organized estate plan is most often than not significant.  In other words, the cost of estate planning amounts to a present investment to provide current and future accumulation and conservation of assets through maximizing estate planning strategies to reduce risk exposure, taxes, and future costs that to the family or estate beneficiaries.  Estate planning provides present benefits for family and beneficiaries as well as significant long-term benefits when inevitable life changes occur.

Estate Planning – Why Is It Necessary?

Our clients engage in estate planning primarily to ensure his or her family is taken care of in the future.  It is an accepted notion that a tragic life-changing event, such as disability or death, could occur at any time. While a family copes with an inevitable life-changing event, they may also be struggling with the burdens and anxiety of having to address estate matters.  The question is whether these estate matters will be guided by a thoughtfully developed estate plan, the government, the courts and attorneys, or a person the court decides to appoint.  A poorly planned estate, or unplanned estate, often results in excessive court costs, administrative costs, needless taxes, attorney fees, losses, and a family’s hurt feelings.  .

Since these situations are uncomfortable to ponder, it can be said that it is a high mark of personal maturity, discipline, and love to provide for family and loved ones in anticipation of inevitable life-changing events.

The Illinois government has set plans and procedures in place to administer an individuals estate in the event of his or her disability or death unless  he or she has otherwise opted out by installing his or her own estate plan and procedures. The state’s ways of handling a persons affairs are rarely satisfactory. “Messy” and “expensive” are good ways of describing what will occur if a person does not opt out of the state’s plans and procedures.

By taking control and engaging in estate planning before it is needed, our clients save their loved ones time, energy, and, of course, expense.  Further, our Illinois estate planning clients and their loved ones are able to avoid unnecessary chaos, time delays, costs, taxes, frustration, fear and insecurity.

Together, our Chicago law firm's estate planning attorneys bring the advantage of value-added, integrated, cross-disciplinary approach to estate planning that is targeted and particularized to each of our client's circumstances

Small Estates Need Proper Estate Planning

Our Chicago estate planning attorney often hear client say that they don’t need to concern themselves about “estate planning” because their estate is not large enough. However, this is faulty thinking. Estate planning focuses on relationships, the value of people, special concerns, and efficient and effective estate administration. The value and size of an estate is generally not the most important of the issues addressed during the estate planning process.

When accounting for the value of an estate, many individuals forget to include privately owned life insurance, travelers life insurance, employer-provided life insurance, accidental death life insurance, personal injury claims, workers’ compensation coverage, wrongful death claims, other employer-provided benefits, mortgage insurance, and other property to which a persons estate, family, and beneficiaries might become entitled. The value of the property outlined above is often significant. From an economic perspective, many individuals do not realize that they are probably worth a lot more dead than alive.

Notable Estate Planning Documents

What are the minimum tools to consider in estate planning?  The simple answer is that there at least three properly prepared, properly executed documents. Most people, for various reasons, would be well served to have a fourth and fifth properly prepared, properly executed document, as well. Wills, possibly a Revocable Trust, a Durable Power of Attorney, a Health Care Power of Attorney, and, if you are not philosophically opposed to it, a Living Will are the tools used to carry out a practical, effective and efficient estate plan for most people.