Like it or not, everyone must prepare for the day when all their assets will pass on to someone else after they die. Despite any foreboding associated with estate planning, taking the time to do it correctly and making well-informed decisions can help keep family harmony and assure that your desires are carried out.
Estate documents
There are many documents concerning an estate depending on a person’s holdings and estate, which include:
- A will dictates how assets will be distributed to heirs.
- Retirement account and insurance policies identify beneficiaries who do not have to be named in the will. Naming a beneficiary dictates who receives insurance and retirement benefits regardless of what is in the will.
- A power of attorney can allow for the appointment of someone else to make financial or health care decisions when you are unable to.
- An advanced heath care directive contains specific instructions on end-of-life matters such as artificial methods and continued nutrition.
Trusts
Trusts can also address more complicated estate issues. These include underage beneficiaries, children with disabilities or special needs, creditor problems and beneficiaries who are inexperienced, irresponsible or have emotional or substance abuse problems.
Trusts also have other advantages. These do not have to undergo probate and are not public records.
Executor or trustee
Appointing an executor or trustee is a difficult decision. Anyone who undertakes this role will perform a time-consuming job. The person selected for these roles should not be swayed by family politics which can add time, stress and costs later.
Selecting the most competent person is more important than considering the feelings of anyone who is not appointed. The executor or trustee should be younger and healthier because they need to outlive you. Also, it is more ideal to select someone who lives nearby to help deal with local issues.
Asset disposition
Being fair to every heir may be impossible. This requires an uncomfortable but important conversation with family members to explain their inheritance.
Your house may be a complicated issue. Having multiple beneficiaries may cause problems if one family member wants to keep it but does not want to buy out other family member shares. Leave it to multiple beneficiaries with instructions to sell it and share the proceeds.
Estate matters may be complex. An attorney can help prepare for these matters and assure that plans comply with Illinois law.