Category Archives: Wills and Trusts

Leave your Trust to your Grandchildren NOT the Government!

A Dynasty Trust in Roselle and Schaumburg Can Help Leave Your Assets to Your Grandchildren – Not the Government!

A lot of people complain about high taxes. Looking at what the government takes from your weekly paycheck can be frustrating. But, it could be worse. Even people who don’t complain about taxes (there are a few) and understand it takes money to run the government would complain if they understood that it is possible for the government to tax the same money over and over and over. And, it happens more than you think.

Here’s a scenario:

You and your spouse leave a very large amount of money to your daughter without a trust – or, in a poorly drafted trust (yikes!). The money is taxed when it is transferred to your daughter. Your daughter leaves money she inherited to your grandchildren without a trust. Guess what? You’ve got it – that money is taxed again!

It is upon learning this that a well-meaning grandparent suggests leaving the money to their grandchildren rather than the child to avoid one of those tax events. Not so fast! In that scenario the federal generation-skipping transfer tax could apply.

Here’s another scenario:

You and your spouse leave $10 million to your child. If her inheritance grew over time, it would be subject to the estate tax at her death. That could result in millions going to pay estate tax.

There is a solution that could be used to stop the government from double-dipping. It’s called a Dynasty Trust. Assets that you put in a dynasty trust, plus any interest earned over the years, are still subject to federal estate tax, but just once – when you transfer them into the trust. The assets will not be taxed again even though several generations can benefit from them.

It’s important to note here that income taxes are still due on any income that is generated by the assets in the trust. Therefore, most people choose to put assets that do not earn money in the trust, such as growth stocks that don’t pay dividends and life insurance policies.

Dynasty trusts are complex legal documents, so they should be prepared by experienced estate planning lawyers in Roselle and Schaumburg who have experience with trust and tax planning strategies. If you are interested in talking with an attorney with this experience, call our office at 630-908-2752 to set up a consultation.

Long-Term Care Insurance

Everything You Need to Know About Long-Term Care Insurance from a Roselle and Schaumburg Elder Law Attorney

Long-term care is one of the most common dangers to the life savings of senior citizens. The fear of losing assets, possessions, and homes drive people to search out ways to protect themselves from the enormous costs associated with long-term care.

Many seniors turn to long-term care insurance, which is supposed to cover them through expensive medical episodes and pay for life in an assisted living or nursing home. However, there is a lot that seniors need to know before buying long-term care insurance and deciding on the best plan for their individual situation. Elder law attorneys in Roselle and Schaumburg have laid out some of the issues seniors should be aware of when thinking about long-term care insurance.

One thing seniors should know when making decisions about long-term care is the average amount of time for stays in nursing homes. Typically, most seniors will not stay in a nursing home any longer than 6 months – if at all. Unfortunately, many long-term care insurance policies lapse before the beneficiary ever makes it into a nursing home, and if benefits are paid to the nursing home through the insurance policy, they’re usually much less than the actual cost of care. As an investment in your well-being, long-term care insurance may not hold up.

In some cases though, long-term care insurance may be a good decision – usually if you look at it in terms of a safety net rather than a be-all, end-all to paying for long-term care. Most experts, including Roselle and Schaumburg elder law attorneys, agree that long-term care insurance is a worthwhile investment only if the premiums amount to less than 5% of your monthly income – keeping in mind that your income will drop as you age while the premiums will rise. In addition, it is advised that you do not even consider long-term care insurance that does not cover assisted living facilities, as it is far more likely that you will stay in an assisted living facility for a greater amount of time than you would stay in a skilled nursing facility.

Once again, with all of this in mind, your individual situation is what will truly determine whether or not long-term care insurance is a sound investment for you. A Roselle and Schaumburg elder law attorney can meet with you to determine your situation and plan out your future needs in order to advise you better when you’re making a decision regarding long-term care insurance.

If you have any questions about long-term care insurance, or if you’d like to have your long-term care insurance policy reviewed to make sure it’s the correct one for your situation, please call our Roselle and Schaumburg elder law firm at 630-908-2752 to schedule a consultation.

5 Steps to Making a Living Trust

Roselle and Schaumburg Wills and Trusts Lawyer: 5 Steps to Making a Living Trust

A living trust is a perfect document for protecting privacy, avoiding probate, and determining who can take care of your affairs while you’re incapacitated and after you’ve passed on. It’s often an essential element for estate plans in Roselle and Schaumburg as it gives an extra layer of protection to estates and gives the trust maker, also known as the Grantor, added peace of mind that their interests will be protected and their wishes will be carried out. So before you visit a Roselle and Schaumburg wills and trusts attorney to set up your living trust, there are some issues you should start thinking about in order to give yourself the best opportunity to achieve your estate planning goals:

  1. Pick the Goals You Want to Achieve with the Trust

Each person has different needs when it comes to estate planning, and there are many goals that a living trust can help you achieve. For instance, if you want to keep your financial and personal affairs private and avoid a long, drawn out probate proceeding, a living trust will ensure your wishes are met.

 

  1. Determine What Assets You Want Protected By the Trust

Once you’ve planned your goals, you will want to decide which assets you’d like to place in a trust. Many people will put their house in the trust since it is their most valuable asset and will likely put them over the threshold when determining whether their estate will go through a large or small probate process. In addition, you may want to consider which financial accounts should go into the trust (typically those held solely in your name) and which should stay out.

  1. Decide Who Will Act as Successor Trustee
    A successor trustee will not only be responsible for the administration of the trust estate once you pass on, but may also be called on to handle your affairs if you become incapacitated, or possibly if you do not want the responsibility of handling your own affairs at a certain point. The successor trustee may also be in charge of managing any property or assets left to minors in your trust, so it is important that you choose someone with a keen financial acumen who you can trust to carry out your wishes.

 

  1. Choose Your Beneficiaries
    It’s your decision as to whom you want to leave a financial legacy for in your living trust, and it’s something that you must think about very carefully. If you make a choice to omit a family member from your estate plan who would otherwise expect to receive an inheritance from you, it may be a good idea to leave behind an explanation of your wishes concerning the matter.
  2. Hire an Experienced Roselle and Schaumburg Wills and Trusts Lawyer to Draft Your Trust
    There are a lot of do-it-yourself programs and cheap alternatives available for creating a living trust, but unfortunately, these documents are often inadequate and will not hold up under probate court scrutiny. That’s why it’s important to research experienced wills and trusts attorneys in Roselle and Schaumburg to draft your trust so you have peace of mind knowing that it’s done correctly and your wishes will be carried out.

If you have any questions about setting up a living trust, or if you’d like to have your existing living trust reviewed in order to make sure it is set up properly for your situation, please give our Roselle and Schaumburg wills and trusts firm, Haugh Law Group, a call at 630-908-2752 to set up a consultation.

DuPage County Will and Trust Lawyer: Should My Will Have Co-Executors?

When making an estate plan and Last Will and Testament, many people have a difficult time deciding who should be the Executor of their estate. Oftentimes they will consider naming Co-Executors – two or more people who serve as executor of the estate. Each Co-Executor named in your Last Will and Testament will have authority over your estate, and therefore must collaborate and work together to ensure your estate is settled in accordance with your wishes. But is this the right choice for you? Below are some pros and cons to naming Co-Executors in your Will.

Pros for Naming Co-Executors of an Estate

One of the reasons Co-Executors are named in an estate is if there are multiple types of assets that need to be handled. The best example of this would be if you owned digital assets along with tangible assets, yet the Executor you want to name for your estate would not be correctly suited to handle digital assets. In this case, you may want to name a Co-Executor specifically to look after your estate’s digital assets. The same could be said for real estate or automotive properties. DuPage County Will and Trust lawyers often bring this scenario up with their clients and encourage them to carefully consider their options when naming Co-Executors to settle their estate.

Cons for Naming Co-Executors of an Estate

Most DuPage County Will and Trust lawyers advise their clients to think very carefully about the dynamics that exist between the people they would name as Co-Executors. Many times the stresses of being named Co-Executor can lead to fighting, and in some cases litigation, if the Co-Executors do not see eye-to-eye. In addition, if it’s possible that the Co-Executors may not work well together or will have difficulty carrying out their duties because they live in different areas, you may want to consider naming just one Executor. Proper planning and communication with your Executor / Co-Executors may solve some of these problems, but once again it is suggested that those considering naming Co-Executors weigh the potential benefits against the probable risks.

It should also be noted that in some cases, even if Co-Executors are named in a Will, one or more of the Co-Executors will resign from their position in an attempt to make the process a bit easier by reducing the amount of people involved in authoritative roles. This is something that DuPage County Will and Trust lawyers discuss with their clients during the estate planning process, so their clients are aware of the different possibilities that may happen once they’ve passed.

If you have any questions about naming Co-Executors in your Last Will and Testament, or if you want your estate plan reviewed to make sure it is in accordance with your wishes, please contact us at 630-908-2752 to set up a consultation.

Schaumburg Wills and Trusts Lawyer: How to Handle Underage Beneficiaries

Many grandparents wish to leave a legacy behind for their grandchildren; however, they may run into some issues if those children are underage. A Schaumburg Wills and Trusts attorney can help you determine what the best options are for leaving assets to underage beneficiaries, whether those assets are held in a Will or Trust, financial accounts, or as part of a life insurance benefit.

Underage Beneficiaries in a Will or Trust

Schaumburg Will and Trust lawyers will always ask their clients if any of their beneficiaries are underage, or even if they would like to keep younger beneficiaries from accessing their full inheritance until they’ve reached a certain age, which is usually 25. If the children are underage, an adult property guardian must be named since minors are not allowed to own property. If a significant amount of property is left to the minor, a Trust should be set up to manage the property until the child comes of age. In fact, Trusts can be used to ensure the minor only receives their full inheritance once they reach a certain age or milestone, such as graduating from college, while at the same time providing assets to make sure the child can achieve that milestone. A Schaumburg Wills and Trust lawyer can speak with you about leaving an inheritance to an underage child and will help you choose the best option for administering the distributions.  

Underage Beneficiaries of Financial Accounts

Many people choose to make beneficiary designations directly on their financial accounts, such as savings accounts, annuities, and retirement plans. Schaumburg Wills and Trusts attorneys urge their clients to carefully examine the details surrounding these beneficiary designations, as minor beneficiaries often cannot directly inherit assets after your passing. It is important to consult with a Schaumburg Will and Trust lawyer to determine the best way for your underage beneficiaries to receive the inheritance you leave for them at the time when they can make informed financial decisions on their own. Directing the assets to a Will or Trust is often the best bet in these situations, but consulting with an attorney will give you a much better idea of how this should be done.

Underage Beneficiaries of Life Insurance

Many parents and grandparents name their children or grandchildren as beneficiaries on their life insurance policies. As with the cases above though, an adult guardian or a Trust must be named in order to hold the life insurance proceeds until the minors come of age. It is generally not advised to name minors as beneficiaries to life insurance policies, as courts will often appoint an adult to look after the proceeds until the child comes of age – and that adult may not be someone you would have wanted appointed to such a role. Speaking with a Schaumburg Will and Trust lawyer may help you determine the best way to handle your life insurance beneficiary designations.

If you have any questions about the best ways to leave an inheritance to underage beneficiaries, please contact us at 630-908-2752 or s.haugh@haughlawgroup.com to set up a consultation.

Moving Assets into a Trust with a Wills and Trusts Lawyer in Cook County

One of the most complex aspects of a Cook County wills and trust lawyer’s job is making sure that a trust is properly funded. While the attorney will be able to do much of the work on behalf of the client, there are a number of documents that are needed in order to transfer assets into the trust. Each of these documents serves to ensure that the asset has been accounted for and that ownership of it has been transferred from the client to the trust.

In order to smooth this complicated process, the wills and trusts lawyer supplies clients with a list of what needs to be collected. Not every item on the list will apply to each client, but by going through and gathering the documentation that is relevant, an individual can speed up the process and make sure that their assets, as well as their businesses, heirs, and personal lifestyle, are fully protected.   Some of that information includes, but is not limited to:

Real Property

  • Any recorded deed for property owned by the individual
  • Copies of title and/or homeowner’s insurance policies
  • Copy of the most recent property tax bill for any real property owned by the individual
  • Deeds of trust, mortgages, and promissory notes
  • Vehicle registrations, including mobile homes

Financial Statements

  • Checking and savings accounts
  • Money market accounts
  • Credit union accounts
  • Safe deposit boxes
  • Investments, mutual funds, and dividend reinvestments
  • Certificates of deposit
  • Original savings bonds or treasury notes
  • College tuition and savings programs

Specific Assets or Credits

  • Original copies of publicly traded securities held as certificates
  • Deeds of trust, promissory notes, mortgages, or other financing statement held by the individual
  • Shareholder agreements
  • Original stock certificates
  • Trust agreements when the individual is a beneficiary
  • Deeds/Contracts for burial plots
  • Financials and contracts for annuities
  • Pension plans, IRAs, 401(k), deferred compensation, etc.

Business Documents

  • Closely held business or professional association – corporate books
  • Partnership agreements for general or limited partnerships
  • Operating agreement for LLCs
  • List of assets for sole proprietorships owned by the individual

While gathering each of these documents can be a time-consuming process, it is an important part of working with the wills and trusts lawyer in Cook County in laying the right foundation for your trust. Each of the items above may be used to fund the trust, and therefore a change of title, beneficiary designations, or other aspect may be in order. There are some pitfalls that can cause difficulties or delays, so getting a quick start will bring about a quicker end! Your Cook County wills and trusts lawyer will have solid advice and suggestions on how best to track down this vital information.