During This Spring-Cleaning Dust of Your Estate Plan
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Include Dusting Off Your Estate Plan in Your Spring Cleaning
As you scrub, sort and air out your home this Spring, take the time to dust your good old Estate Plan. This is a document you definitely want to stay fresh, not a once and done effort. Major life events, changes in financial status and applicable laws all affect your estate plan and require editing your original documents. If it has been a while since you made your estate plan, consider the following:
Is Your Trust Funded?
Your nice attorney drafted a big binder of estate documents that you signed. If your estate plan involved a trust, your work didn’t end if you just stored it away. In order for a trust to be effective in avoiding probate and distributing your assets, you must ensure that you have funded the trust. There is a variety of ways to fund your trust, talk to your attorney and review if you are up to date.
Have You Named Beneficiaries on all your Accounts?
To avoid probate court, you will want to be sure that any asset with your name on it has a beneficiary listed, and that the beneficiary is current. We at AJM&A, Ltd. can help provide the detailed recommendation on what beneficiaries should be named and how.
Did You Add a Child to Your Family?
If you have had or adopted a child, you are either in need of an estate plan or need to update the one you have. Your estate plan will allow you to appoint a successor guardian(s), ensure your assets pass to the child as intended and protecting a child from managing their inheritance.
Have You Purchased Real Estate?
If you bought real estate since you last signed your estate planning documents, you may need to revise them to avoid future issues. Meet with your attorney to ensure proper coverage and administration of any new property.
Has There Been a Death in Your Family?
If someone previously listed in you estate plan is deceased then you should meet with your attorney to confirm that your plan still reflects your wishes.
Is There a Significant Change in Your Net Worth?
If you are lucky enough to have significantly increased your net worth since you completed your estate plan then your plan will definitely need revising. Illinois has its own set estate tax and if you are approaching a net worth of $4 million, then you need to consider how this estate tax may affect you. Similarly there is a Federal tax exemption of $15 million per spouse. Proactively developing a strategy with your attorney can help you mitigate unnecessary estate taxes.
Married or Divorced?
These types of life changes affect your estate plan. Many married couples leave most assets to the surviving spouse. If you have gotten divorced since your estate plan was signed, then you will likely have to revisit the distribution of your estate. On the flip side, if you have gotten married then you will likely want to revamp your estate plan to provide for the new spouse. If in case you are entering a second (or third, e.g.) marriage then you will want to be clear about who receives your assets-including stepchildren or other family members. Contact us to ensure the proper result.
How Long Has it Been Since Your Signed Your Estate Plan?
As of January 1, 2020, the Illinois Trust Code became the law in Illinois. If you signed before then, it may be time to revise your documents to comply with the new Trust Code.
Use the idea of spring cleaning to review these important documents and make sure they are up-to-date. We will be sending emails to clients with estate plans that are five years old or older that have not been reviewed. If you want to contact us at (312) 578-9300 or info@madonia.com we can help you figure out the status of your estate plan.