Category: Trusts

An illness or other major event may require the key players in your life and estate to have to reach for up to date information. Fall is a good time to catch up and review the resource you previously created — or to create one now.

What kind of information and materials may be needed? The list can be extensive based upon your life activities and your assets. But the core is easy and powerful to have at hand. 

Gather in one file, secure on-line storage or other accessible location the following:

Estate Documents:   Powers of Attorney for Healthcare and for Property, Living Trust Declaration, Last Will & Testament, Transfer On Death Instruments and Advance Directives. It’s a good time to review them to make sure that updates can be done, if necessary. And be sure to make notes about the location of the originals.

Personal Information:   Birth Certificate, Military Discharge Papers, SSN information, prior Divorce paperwork, Immigration and Naturalization paperwork. Advance information concerning cremation or burial or other plans are also useful.

Key Individuals:   Identify the persons who are key sources of information if something should happen. This include name and contact information for clergy and affiliations, financial advisors, business and property partners, accountant, attorney, and employment information and family contact information, to name a few.

Business & Financial Information:   Contact information and the status of your interest in corporations and LLCs,  partnerships, and joint ventures are important. Include copies of the business paperwork or where to find them. Financial accounts and the nature of the accounts where assets are held; and consider including copies of beneficiary designations for those accounts as well. Consider information about personal loans to or from others, so that these matters don’t fall through the cracks. And don’t forget insurance policy information, whether life insurance, personal property and real property insurance binders, and key man policy information.

Debt Information:   Include copies of or information concering mortgages, personal property loans, credit cards and credit facilities.

This is a start. It’s not one-size-fits-all. And the more complete that you can be, the better your family and the people that are part of your estate planning will be at bringing the important information to use when necessary. This way, the important people around you can focus on you and your spouse and children, instead of having to chase documents and information.

Reach out to your Estate Planning Attorney to be sure to start the discussion. Don’t have one? Call or email to Attorney Marc Sherman.

In Illinois, after someone passes away we can use a Small Estate Affidavit to transfer property from the deceased person’s estate to their heirs or beneficiaries without going through the formal probate process in every instance. For many years, estates valued at $100,000 or less, and that do not include real estate that is only in the deceased person’s name, have been more quickly and easily administered without having the expense of opening a formal Probate Case in court.

Attorneys have often grumbled that the $100,000 limitation for use of this Small Estate Affidavit is outdated. Often, by the time the family adds up the value of a car, checking and savings account, and other assets, the amount exceeds $100,000 in value and they find themselves having to deal with the expense and time involved in moving through the probate court process.

Illinois Governor Pritzker will soon have a new bill on his desk that will change the upper limit for the Small Estate Affidavit up to $150,000. In fact, as important as the increased amount, is that the law will change so that we will now no longer include the value of the decedent’s motor vehicles in the calculation of the threshold Small Estate Affidavit amount. 

For those currently involved in trust planning and those clients who previously prepared their living trusts and are involved in funding their trusts, if the Bill (SB 83) becomes law there will no longer be a need to consider transferring valuable motor vehicles to the trust.

We will keep an eye on the Governor’s activities, since the Bill would become law immediately after it is signed. The use of the new Small Estate Affidavit threshold will not be retroactive. If your loved one has passed away prior to enactment of the new Law the legislature has provided that the older threshold is still applied.

If you have questions about the use of a Small Estate Affidavit, or questions about other aspects of Estate Planning or the Probate Court process, reach out to Marc Sherman or Maureen Meersman. Contact information is here: https://mshermanlaw.com/contact/

The answers are really not complicated.

We can select a form from a Google Search, or use an on-line service to produce a form. Sometimes it’s purely a financial decision – even though most attorneys will prepare simple estate planning documents for a flat fee rather than their hourly rates that run into the hundreds. 

But, it’s no different than representing yourself in Court, or working on your own to negotiate a contract or lease agreement. You may be lucky and no problems arise. Or, you may find yourself reaching out to have an attorney start over from scratch or spend time fixing the issues, sometimes early in the creation process and sometimes later, when something blows up.

The On-Line Downloads Almost Never Come With Warnings!

We are so used to having documents handed to us and being told to fill and sign, that we have become somewhat numb to the fact that the information we input is often limited by the boxes to check or by the directions on what to fill. And it happens repeatedly — every week. Subscription forms, financial or bank forms, health forms, and forms for others, like our kids.

Even where the choice in the box reads “Other”, nothing on the form guides you to what that “other” option or situation may be or can be. If the on-line form asks who you would like to have act as your Power of Attorney Agent and the choices are to name a person, or check the box for your spouse, or your child, are there other options and what are the real considerations you should think about? You bet.

If you use one of the on-line document creation services, there’s almost always an opportunity to “chat” with someone if you have a question during the document creation process. But who are you chatting with? An AI bot? An attorney in your state or even in your country? And how many years of law practice has that attorney had? When an avatar appears with the chat, shouldn’t we be concerned? Of course.

On the other hand, when you work with an Attorney to discuss and create important Powers of Attorney, or a Last Will & Testament, or a Living Trust, the many concerns and thoughtful considerations that should be a part of the document creation come to life.

In fact, quite often the folks who have good intentions and confidence that they have completed the on-line or downloadable form find themselves perhaps years later learning that the documents were not properly witnessed or signed. Learning that there is a problem when you are first using the form is an expensive mistake. And it’s often a time-consuming and anxiety-producing situation.

These are important documents that are meant to be ready and properly prepared to be used in emergency situations. You are not going to call LegalZoom or Trust&Will from the hospital when there’s a problem with the Power of Attorney for Healthcare, or from the bank when there’s an issue with acceptance of the Power of Attorney for Property/Financial matters. Indeed, you won’t even know if the Last Will & Testament you prepared accomplishes your heartfelt directions following your passing! But your family will know, since they are the ones who may find themselves learning that your intentions as you tried to express them in your Will are not going to be followed by the probate court.

The On-Line Forms Make It Easier To Take Care Of This In The Evenings Or On Weekends, You Say?

Sure, it’s less stressful to be able to work on creating your estate materials when you are at your kitchen table. Taking a paid day off work to visit the Attorney’s office is no fun. Still, there are many times when the Attorney will be able to work with you either before or after hours, or on a weekend, and these days even via Zoom or other video conference platforms. And, frankly, these estate materials are important enough that if you can take part of a day to visit the Attorney’s office, you should.

My Cousin (Or My Friend) Did It.

This would be a great excuse, if this was a one-size-fits-all planning situation. The truth is in the facts:

There is a reason that Attorneys who don’t work in estate planning reach out to consult with other Attorneys who do! Or, better yet, they reach out to have their knowledgeable estate planning colleague prepare their parents’ or kids’ materials. Enough said?

If You Have Downloaded An On-Line Form, But Now Understand That You Should Speak With An Attorney, How Do You Start?

Start with an email or call to Attorneys Marc Sherman or Maureen Meersman, who can set up a time to discuss your needs, your timing and share the cost and value of properly prepared estate materials for you and your family. Reach out here: https://mshermanlaw.com/contact/

The focus of Estate Planning Attorneys is the mature client who comes to realize the significant value that they have accomplished during many years of work and thoughtful savings. Less often, our attention is drawn to young adults or to the children of our Estate Planning clients. But we should navigate toward a new model.

There’s no question that our young adults, and particularly our children who have recently become new parents, need to plan early and update often. The goal is clear: plan for protection of themselves and their family, plan for management of their own assets and life activities, and give them an early start towards a tax efficient retirement and retirement planning strategies to take advantage of right now, so that our kids have material opportunities when that time comes.

What do our children look to during this important step?

Creating the important building blocks:

This is a plan, like any other. A flexible and thoughtful basic estate plan includes a Last Will and Testament, Powers of Attorney for both healthcare purposes and for property and financial purposes (sometimes called Durable Powers of Attorney), HIPAA authorizations, and perhaps even their own living trust.

Why does a young adult need a Will?  

Everyone needs a Will in order to make sure that they have consciously selected the person who will be responsible for following through with estate activities and distributing estate assets should that time come earlier than expected. As parents, we have to recognize that our children may not want us to be the ones to necessarily handle the disposition of their estate, and particularly once they have entered into long-term relationships with their significant other.

Of course, young adults today have many more assets, particularly intangible assets (think non-fungible-tokens, digital assets and digital media business and personal interests), and they want to make sure are distributed according to their own plan.

Finally, once our kids begin to build their own Family, the all-important identification of a guardian for their own young children (your grandchildren) becomes an important purpose for creating a Will. Should something happen to your child and their spouse, the law and a court will impose the very personal decision of who will be guardian for your grandchildren. The law books are full of cases involving fights between maternal and paternal grandparents who each believe that they will be a better guardian for their grandchildren. Why leave the family with those battles, which are emotionally and financially taxing, at a time when your grandchildren’s welfare should be the focus of your attention?

Why should your young adult create a Power of Attorney for healthcare?

Just like a life insurance policy that we hope we will only need many years from now, the Power of Attorney for healthcare document is one of the most useful and least discussed tool among young adults.

The law is clear that once our children are emancipated at 18 years old, even if they are still living under our own roof, they are viewed as adults in the eyes of the law. Parents are not necessarily going to be able to make important healthcare choices and decisions on behalf of their child, even in the event of an emergency. Indeed, even after our child enters into a relationship with a spouse or a civil union otherwise recognized by law, the child’s life partner may not be able to make vital decisions for them in connection with medical procedures, medical records, prescriptions, and all-important end of life decisions.

The HIPAA authorization is often embodied within the healthcare POA, but may be a separate document created for the useful purpose of having access to health insurance information and other authorizations that may not be easily accomplished if our kids are unable to act on their own, whether temporarily or permanently.

What is a Power of Attorney for property or financial matters?

If our children are unable to act on their own for the many mundane and important purposes for which actions and decisions are made each day, those activities must be accomplished with the help of a surrogate. We call this person the Agent.

The Agent will act for them on an interim basis or perhaps permanently, if we cannot manage the variety of property-related activities of daily living that need to be taken care of. For starters, think of dealing with an employer or an employer’s different types of benefit plans, filing tax returns, paying routine bills for home and personal purposes, making investment decisions to protect stocks, bonds and other assets from loss, hiring professionals like attorneys and accountants, and applying for benefits available under government programs.

Creating the basic Living Trust can be a valuable exercise:

If your own estate plan provides that your children will inherit significant assets, even in their early years, those inherited assets are properly the subject of discussions concerning asset protection strategies that are going to be important for our children, at any age.

Without proper planning, assets inherited by our children may become subject to collection actions by their own creditors, or may become the target of a bankruptcy trustee if our child needs to seek relief from voluntary or involuntary obligations that threaten their assets and life plans. Indeed, as one colleague often reminds us: “I love my child, but I may not love my child’s spouse.” Setting up a Living Trust for your child to receive inheritance, and assisting your child to create their own Living Trust to make plans for their own asset distribution and protection, can be a very useful and manageable technique that both of you should consider.

Perhaps you know now that your child has become the object of a creditor attack arising from a failed business situation, or an unexpected accident causing injury to another, or a myriad of other concerns that cause parents to lose sleep.

Our consideration needs to be focused on protecting our child, and that includes asset protection strategies. The Life Insurance proceeds that may be inherited by our child are not protected in their hands once the distribution has been made by the insurance company. Likewise, the 401(k) and IRA assets that we are working so hard too build during our lifetime may be exempt from our own creditors under most circumstances, but are not exempt from our children’s creditors. 

Our ultimate goal?

Protection. We are vigilant in so many of our daily activities to avoid troublesome situations. But, remarkably, we often give so little thought to all of these tools and considerations for our children. Perhaps because these tools fall under the label of “estate planning” when they should really be considered “life planning” activities. We can teach our children how to be thoughtful when something happens to us, and how to maneuver through the estate planning tools we have created for our own benefit and for the benefit of our families.

And we can also provide important education to help our kids set up for their own long-term successes.

Attorneys Marc Sherman and Maureen Meersman can provide helpful guidance if you would like to set up a time to review these useful considerations for yourself or with your children. Marc and Maureen are available for your consultation: https://mshermanlaw.com/contact/