Estate Planning – What is It?
Our Chicago estate planning attorneys are frequently asked, “What is estate planning.” Estate planning is more than just having a Will. Broadly defined, “estate planning” is the process of planning for the accumulation, conservation, and ultimate distribution of a persons estate.
The popular definition of estate planning is the process of planning for the life-changing events of disability and death. This popular perspective also includes an emphasis towards estate tax reduction and probate avoidance. These popular perspectives, although important, should be subservient to the broader goals and purpose of estate planning.
Goals of estate planning include:
gauging whether lifetime goals are being pursued in the most direct and balanced way;
identifying opportunities to enhance and leverage personal and family situations;
providing an opportunity to create safeguards for the protection and preservation of assets;
identifying difficult areas or issues and providing opportunities to cure and resolve them now (rather than placing the burden on someone else later);
assuring family members that the appropriate mechanisms are in place for their future security; and
providing an orderly and fair means of managing and distributing property in case of disability or death.
Estate planning, in the long run, costs little or nothing, and amounts to a present investment to provide current and future accumulation and conservation of assets through maximizing opportunities and reducing risk exposure, costs, and taxes. Estate planning yields current benefits for family and loved ones, as well as significant long-term benefits when inevitable major life changes occur. In general, estate planning extends a persons intentions, values, patterns, and priorities to future circumstances in which he or she will not be able to actively participate. It produces a plan that will strengthen and preserve financial security and order for family and loved ones.
Finally, estate planning is good stewardship. WEBSTER’S DICTIONARY defines “stewardship” as “the individual’s responsibility to manage his life and property with proper regard to the rights of others.” This responsibility extends to others and, importantly, to yourself.
Estate Planning – Why Is It Necessary?
Our clients primarily engage in estate planning for their loved ones. Everyone understands that it is possible a tragic life-changing event could happen at any time, such as disability or even death – accidents and illnesses are rarely predictable, but they are almost always inevitable. While family and loved ones cope with these life-changing events, they may also be struggling with the burdens and anxiety of chaotic estate matters. The question is whether these estate matters will be handled pursuant to a properly developed estate plan, the government, or someone the court decides to appoint. A poorly planned, or unplanned, estate often results in excessive administrative costs, court costs, attorney fees, needless taxes, losses, and frustrated and hurt loved ones. Additionally, clients with a properly developed estate plan will have ensured their minor children are cared for by those who are best suited to provide the best home rather than letting a judge decide.
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 state 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.