Illinois Estate Planning and Elder Law Blog

Let’s say your oldest daughter is a strong-willed and successful accountant, and your son is a high school teacher who is good at managing money and being the family’s peacekeeper. You’re almost done with your estate planning but unsure about which of your children to choose to be the executor of your estate, and you don’t want to cause ill will between them.

Before you decide who to choose, consider the following advice when it comes to choosing an executor:

Success often means nothing. Just because someone is a financial professional, even an accountant, doesn’t mean that person will be a great executor of your estate – like in cases of a good doctor being a difficult patient or good lawyers being unsuited to represent themselves. People can be great at their jobs and careers but then be terrible when it comes to managing their and your personal affairs.

People often have more digital assets than they realize. What happens to these assets when a person dies?

Until recently, every individual site has had its own terms of service that determined who has ownership and access after a death and whether the assets are deleted, frozen or can be transferred. This has meant a hodgepodge of rules for survivors to need to sort through, and family members are often shocked to find they have no control at all. Irreplaceable images, photos, and history are often lost, as well as items of financial value.

However, almost every U.S. state has now passed the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA, and experts are gaining a better understanding of how this law helps their clients determine what happens to their digital assets after they die.

It can be very difficult to plan for events like aging, incapacitation, and death, but not planning for these events can cause families burden and grief and might also cost family members a significant amount of time and money.

It is estimated that over 50% of Americans haven’t created a will. The Future File business also estimates that less than 10% of the U.S. population has a complete legacy and wishes planning system.

Planning for difficult and unexpected events is vital but can often be difficult to navigate. Here are the top estate planning mistakes to avoid, according to experts in the industry:

When a second marriage joins two families together, it is often a time for celebration as two families come together and become a new family unit. However, it might also lead to inheritance fights, particularly between stepparents and children. A good estate plan is important to help avoid these quarrels.

Complications can arise especially when two people who marry both have children from previous relationships. It is common for married people to leave everything to their spouse. In these cases, children from the previous relationship may now see their inheritance go to their stepparent, who may then leave it to their own children. If additional children are added to the relationship, things can end up being even more complicated.

Each couple needs to redo their estate plan before getting remarried. Here are some ideas for reducing or eliminating disputes before they occur:

An increasing number of Americans are including pet care in their estate planning. Currently, 67% of U.S. households own at least one pet, and many people now consider long-term planning for them just as important as they would for two-legged family members.

Fidelity Investments has tips on its website for pet owners, advising them to be upfront about what is needed to care for their pets and stating that once a caregiver has been identified, a plan should be put in place detailing what needs to happen immediately after the death of the owner.

Some questions you may want to explore include the following:

In life, there are many important milestones. For many people this list of milestones includes graduations, marriage, children, opening a business, and retiring. As we move through life, it is important to plan for the next step as well as to plan for the unexpected.

For some people, especially younger families, estate planning is much like an insurance policy – hopefully it isn’t needed, but it is comforting to have in place. For others, estate plans are made with specific goals in mind, such as to ensure the smooth transition of a business, protect family members from creditors, or minimize tax consequences.

Here are important estate planning-related projects to consider at various points of life:

Retirement means different things to different people in terms of both the experience and the age at which retirement begins, and this life change can cause a wide range of emotions – from fear and anxiety to excitement and joy.

During this often emotional time of transition, it is important to make sure your financial matters are in order. Creating a solid financial plan and creating and organizing important legal documents are essential to help ensure your personal, financial, and health wishes are carried out the way you want. The management of your estate begins with working with an expert to help give you greater control, privacy, and security of the legacy you have built.

Listed here are important documents you need to get started:

Probate is an important legal mechanism that dictates the distribution of assets after a person’s death, specifically within a probate court and with a probate judge presiding over proceedings.

Surviving families and other interested parties usually trigger a probate process to cover issues relating to the deceased individual’s estate settlement. Interested parties typically hire a lawyer to represent their interest as well. In many cases, the estate pays for the legal fees with a fund set aside to handle probate costs.

How long the probate process takes depends on the quality of the estate planning already in place as well as on the state where the probate process is occurring, but the entire probate process is likely to be completed within six to nine months, according to the American Bar Association. It isn’t always a clean and efficient process, but it is a legal way to properly dispose of an individual’s property after their death with a stamp of approval from a probate court.

The rise of bitcoin as well as other virtual currencies associated with blockchain technology (known as cryptocurrencies) has created a number of new millionaires and raises new questions in the legal community when it comes to addressing cryptocurrencies in estate plans.

The Internal Revenue Service classifies cryptocurrencies as property for tax purposes, so owners of cryptocurrency may stipulate the disposition of their cryptocurrencies in their estate planning documents. However, the difficulty lies in determining how to enable the transfer of cryptocurrencies after the testator’s death without putting the security of the cryptocurrency holdings at risk during that person’s lifetime.

Cryptocurrencies are effectively bearer instruments that are accounted for in “wallets” on a decentralized blockchain. A cryptocurrency wallet is a software program that stores access credentials and interacts with blockchains to enable users to send and receive virtual currencies and monitor balances. Therefore, whoever knows a wallet’s access credentials (the private key) has access to the cryptocurrency in the wallet and can transfer the cryptocurrency to themselves. However, if no one knows a wallet’s access credentials, its contents are permanently lost, so it would be unable to be accessed by heirs after the wallet owner’s death.

An increasing number of our day-to-day activities are moving online. Whether financial, social, work, or leisure, all aspects of our lives have a growing presence on our computers or the internet. Because of this, smart estate planning should include addressing digital assets.

Historically, estate planning consisted primarily of physical and financial assets such as real estate, jewelry, collections, and other physical items – but today, digital assets also needed to be considered.

Planning for administration of digital assets poses unique challenges because online policies regarding this assets are constantly evolving. However, incorporating digital assets into your estate plan as well as setting up a regular process for updating this information are important to ensure your survivors can easily manage these assets and that your wishes for them are fulfilled.