We are now doing in-office conferences and signings and, with strict COVID guidelines as well as telephone and Zoom. Whether it is remote or in-person we are here to carry out our mission to help and serve our clients.

Articles Posted in Estate Planning

It was recently National Love Your Pet Day, and although you might think of your pet as family, under the law, pets are regarded as property – so although you can’t leave them money in your will, there are other ways you can make sure they are protected in the event of your passing.

You may have heard stories of people who left their entire fortune to their dog, but that isn’t exactly how it works. You can leave all your money to ensure your pet will be taken care of after your death, but it needs to be done in a certain way.

Because pets are considered property, you won’t be able to name them as a normal benefactor in your will, says Peter Elikann, Boston 25 legal analyst.

Let’s say a married couple indicates in their estate plan that on the first of their deaths, the predeceasing spouse’s assets will be held in a trust. During the surviving spouse’s lifetime, they are the beneficiary and trustee of the trust, and once the surviving spouse passes away, the remaining trust assets will then be passed along to the couple’s children. Under prior Illinois law, the surviving spouse was not required to give notice or accounting to the children during that spouse’s lifetime. Many surviving spouses would have responded to the children’s questions about the trust with something along the lines of, “It’s none of your business.” However, on Jan. 1, 2020, that changed.

The Illinois Trust Code

Beginning Jan. 1, 2020, the new Illinois Trust Code (ITC) replaced the previous Illinois Trusts and Trustees Act. Among the changes, the most important involve the rights of remainder beneficiaries to notices and accountings – but it also gives proactive clients new tools to customize trusts and modify or avoid some of the new notice and accounting requirements.

The elimination of the Stretch IRA as part of the Setting Every Community Up for Retirement Enhancement (Secure) Act is going to create big changes for wealth advisors, estate planners, and parents planning to leave behind savings in individual retirement accounts for their kids.

“For a lot of people, the bulk of their wealth has been established in their IRAs,” said Michael Repak, vice president and senior estate planner with Janney Montgomery Scott.

The Secure Act is the most comprehensive retirement bill to pass in a decade and a half, and much of it is designed to stimulate more and better options in the workplace defined contribution market.

An important new federal law went into effect January 1, 2020 called the SECURE Act (Setting Every Community Up For Retirement Enhancement). This law will change retirement savings and estate planning options for many people. Here are a few of the changes this act puts into place that may have the greatest impact on you and your estate plan.

The SECURE Act raises the age at which individuals must begin taking required minimum distributions from their IRA, 401K, 403B, and other qualified funds from age 70 ½ up to age 72 (an exception being if you turned 70 ½ prior to Dec. 31, 2019, in which case the new rule does not apply to you and you will need to start taking distributions by April 2020 or face penalties). The new law also does away with the 70 ½ age cap on contributing to an IRA. Now you can contribute income to an IRA no matter your age.

The most significant impact the SECURE Act has on estate planning concerns the IRA Stretchout. Before this act, individuals who did not need their IRA money could pass the IRA to non-spouse beneficiaries who could then “stretch out” withdrawals based on their life expectancies. Clients could use this to create a lifetime income stream for their children. However, this can no longer be done under the new law. Instead, non-spouse beneficiaries have to withdraw all funds from an inherited qualified plan within 10 years of the death of the original owner (although there are a few exceptions, such as if the non-spouse beneficiary is disabled.) There doesn’t need to be a set withdrawal schedule – the account just has to be depleted within 10 years. Those most impacted by the income tax consequences will be non-spouse beneficiaries in their peak earning years.

Maggie Kirchhoff, a certified financial planner with Business & Personal Finance in Denver, has been with her partner, Matt, for 13 years. The two do not plan to ever get married, and they know this means they won’t get the same automatic rights and protections that those who are legally married get, especially when it comes to death.

“A lot of spousal rights are inherent with a marriage certificate,” says Kirchhoff. “For unmarried couples, though, you have to make a concerted effort to cover all your bases.”

The number of unmarried couples who live together was at 18 million in 2016, up 29% from 14 million in 2007, according to the Pew Research Center. Among those age 50 and older, this increase was 75%: About 4 million were cohabiting in 2016, up from 2.3 million in 2007.

For most Americans, estate planning can be complex and daunting. It might seem overwhelming and expensive, and it isn’t easy to confront one’s mortality and make the necessary decisions for it. Nevertheless, it is essential that every American have one important estate planning document: A Health Care Directive.

A health care directive is a legal document which specifies the decisions for caregivers in the event of illness or dementia as well as giving directions for end of life decisions, including how the body should be handled after death. They are sometimes also called living wills, durable health care powers of attorney, or medical directives.

The Impact of Estate Planning

The financial abuse of elderly people in the United States is unfortunately a very serious problem, with more than $36 billion being stolen from elders each year according to The True Link Report on Elder Finance Abuse 2015.

The True Link study showed that seniors from all walks of life are susceptible to this type of manipulation, and a significant number of victims were younger seniors with college educations and not living in isolation. In fact, they lost more to abuse than those who were older, isolated, and less educated.

Unfortunately, the research shows that family members are the most frequent abusers of seniors. A relative might ask a widow or widower with assets for a “loan” to tide them over or invest in a new business and then fail to repay the loan (or the business fails or the investment is a scam). In cases such as these, the elder often has no recourse.

You know you need to create a will, but you keep putting it off – it’s difficult to think about dying and about who will take care of your family after you have passed away. But if you’ve only scribbled some notes or considered which lawyer to hire, you risk dying “intestate” — without a will that could guide your loved ones and would likely save them both from family fights and from losing money.

Financial planners say getting people to stop procrastinating on estate planning can be tough. Here is advice from several of them offering their best strategies for helping clients to get this done.

Remember whom you’re doing it for

Oftentimes, federal workers and retirees don’t bother with estate planning and think that getting a will off the internet and getting it notarized is all they need to do. However, this isn’t necessarily enough. If you are or were a career civil servant, own a house, have money in your TSP account, bank, or investments, you probably have an estate (you almost certainly do if these are true and you are also still married to your first spouse).

So what next?

A will is a very important part of an estate plan, but it is certainly not a complete estate plan on its own.

Many people know of the stories of well known celebrities, such as Prince and Aretha Franklin, who died without a proper estate plan in place. We want to plan for a good life and retirement, but it is important to also plan for a good end of life. Here are four ways you can refine your estate plan and take steps to protect your assets and prevent unneeded stress and uncertainty for your loved ones.

1. Review Beneficiary Designations

Many accounts can pass to heirs and loved ones without having to go through the process of probate. Life insurance contracts, 401(k)s, and IRAs can be transferred through beneficiary designations, so you get to decide who you want to inherit your accounts by filing out a beneficiary form. Oftentimes you can use these forms to name successors or backup beneficiaries and even split up accounts by dollar amount or percentages between beneficiaries.

Contact Information