Many people feel they do not need to revisit the issues of estate planning once their wills or trusts are in place. However, revisiting an estate plan is one of the best ways to refine it and ensure one’s assets are protected. For help re-evaluating or modifying your own estate plan, please contact an experienced Illinois estate planning lawyer who can advise you.
Reviewing Beneficiary Designations
Once a person passes away, many of his/her accounts can pass directly to designated beneficiaries without having to go through the probate process. Life insurance contracts, IRAs, and 401(k) accounts all fall under this category. In fact, testators can also use beneficiary designation forms to name successors and backup beneficiaries and to split up accounts between beneficiaries by dollar amount or percentage.
When re-evaluating an estate plan, most people are encouraged to review these beneficiary designations every few years or after major life events, such as:
● The birth or adoption of a child or grandchild; and
● The death of a spouse or child.
In some cases, divorce eliminates beneficiary designations for the former spouse, but this is not always true. For instance, 401(k) accounts could be inherited by a former spouse if his/her designation is not changed upon divorce. For this reason, estate planners should be careful to ensure all their retirement and investment accounts beneficiary designations are up to date.
Establishing a Trust
Having a proper will or trust in place is crucial to any estate plan. Trusts have proven to play an important role in keeping an estate out of probate court. For most general estate planning needs, revocable trusts are enough to protect a person’s assets, as they allow trustees to manage their assets for their beneficiaries during their lifetime. On the other hand, irrevocable trusts – which cannot be controlled by the trustor, can provide other benefits, including creditor protections, a reduction in estate taxes and the separation of assets from the annual tax liability of the testator. For help determining whether one of these trusts is right for you and your family, please contact our legal team today.
Incorporating Charitable Giving
Including charitable giving in an estate plan allows testators to leave financial legacies to their church, alma mater, charity or other non-profit organization, while also ensuring they are provided for during their lifetime. Incorporating charitable giving into an estate plan can include everything from giving gifts to charities outright to setting up a charitable remainder annuity trust to provide income to a surviving heir.
Obtaining Life Insurance
A proper life insurance policy can help protect testators against the loss of income or an untimely death, while also providing a way to pass on tax-free income to one’s heirs. These policies have several other benefits when it comes to estate planning, including providing cash flow and liquidity to estates, which would otherwise be subjected to estate taxes or that are made up of mostly liquid assets.
Contact Our Office Today for Help with Your Estate Planning Needs
For help updating or reevaluating your own estate plan, contact Orlowsky & Wilson, Ltd. Attorneys at Law at 847-325-5559 or complete one of our brief online contact forms today.