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Articles Posted in Trusts

Do you own real property in multiple states? Perhaps you are a snowbird or own investment properties such as rentals in more than one state. If you do, your estate will likely be required to go through probate in each state where you own real property at the time of your death. Probate isn’t necessarily a bad thing, but it is often very time consuming and can quickly become expensive with court costs and lawyer’s fees. In cases where real property is owned in multiple states, that would mean going through probates in each of those states.

However, there are a number of methods that can be used to try to avoid probate:

One method is to add the intended heirs to the title of the real estate while the primary owners are still alive. However, this is not often advised. If any of the intended heirs (who then become co-owners of the real estate) get into financial trouble – such as bankruptcy, divorce, being sued, creditor issues, etc. – the primary owners of the real estate also become involved in their financial trouble. Parents shouldn’t lose their home or other properties because their child was sued by another person.

Having a pet brings many people joy and provides them with a living creature to take care of and to provide companionship. Unfortunately, pets are often overlooked in people’s plans for incapacity or death.

The types of animals that one has as well of the needs of those animals should be considered carefully when preparing a last will and testament or trust. The responsibility of caring for a small indoor pet is very different from that of a large barnyard animal.

When considering a potential caregiver for your animals, you’ll want to make sure this person has the desire, ability, and available space to take good care of your pets. Also consider the other people who live in their home, taking into account their like or dislike of animals and if anyone in the house may be allergic to the types of pets you have. Also, does this person already have other animals? Someone who already has pets may have a better idea of the time and money needed to take care of your animals, but it may be more difficult for everyone to adjust in this case.

When it comes to estate planning, families with special needs children need to take extra care to prepare for when you will no longer be around to care for your child. As part of an estate plan designed to help enhance and enrich your child’s life both in the present and into the future, you may want to consider a Special Needs Trust.

A Special Needs Trust allows individuals with disabilities to receive funds needed to supplement their benefits, have a greater quality of life, and cover unexpected expenses without losing their benefits. This can be created for someone with physical and mental disabilities and/or with mental illness. There are three different types of Special Needs Trusts that can be created, and they differ in who creates the trust, who is trustee, and what happens to the remaining assets in the trust after the death of the beneficiary.

Unfortunately, people often lose their SSI, Medicaid, or other benefits after inheriting life insurance, real estate, or other assets. Special needs planning works to prevent this from happening and to preserve these benefits. It also can be used to provide lifetime money management for benefit of the disabled child, protect eligibility for public benefits, and ensure a pool of funds if public funding ever ceases or is restricted.

Many people think of a Last Will and Testament as the main tool for “normal” estates, with trusts only being for large estates. However, revocable living trusts are one of the most underutilized estate planning tools.

Living trusts are documents that give a set of instructions for the use of one’s assets during their lifetime and for the distribution of those assets after their death. Although they aren’t necessary for everyone, living trusts can be useful even for small estates, depending on the type of property and the needs of everyone involved.

Living trusts are a user-friendly trust option and provide these four major benefits:

Do you need a professional trustee?

There has been more of a spotlight on legacy planning and the need to get our estate plans in order during the last year. Along with the prospect of a lower estate tax exemption and an aging baby boomer population, 2021 is the perfect time to focus on estate planning and on making sure important documents are up-to-date.

Since the current elevated estate credit is set to expire in 2025, many people were already anticipating the need for a trust before the pandemic began. This year brought an urgency to people’s focus on making sure their financial and legal affairs are in order in case of an illness or death.

When it comes to trusts and their potential benefits, a lot of people assume trusts are for “others” and don’t realize they may be ideal candidates for a trust that could help to protect their assets and avoid probate. Here are some of the most common misconceptions regarding trusts:

“I don’t want to lose control of my assets. Doesn’t someone else control the Trust?”

– Answer: Not necessarily. When setting up a Revocable or Irrevocable Trust, you can be the Trustee (the person who manages the trust). You can also choose other Co-Trustees, such as your spouse, child, or someone else you trust. You also choose who your successor trustees will be, and these people will take over the trust if you become incapacitated and after you pass away.

During the COVID-19 pandemic, many of us in Illinois are complying with the governor’s stay-at-home order. We are hunkered down in our homes – making only necessary trips for essential matters such as medical treatment, supplies, or perhaps taking a walk to breathe in in some fresh air and soak in some sunshine while maintaining social distancing. We thank and applaud everyone who is doing their part in curbing the spread of this virus.

At this time, some of you may reflect on the “what ifs” of the future. What will happen if you become incapacitated, or worse, if you pass? What if your child has special needs and you wish to preserve assets for the benefit of your child? What if you have minor children? How or who will take care of them and assets for their benefit should you be unable to care for them, or worse, die? Are you able to make or coordinate health care and financial decisions for your spouse, parent or other elder loved one?

Illinois law provides defaults for distributions through probate court proceedings if you were to pass away and a legal process (namely, guardianship) should you become incapacitated. Depending on Illinois law could involve what could be costly court proceedings. Ultimately, the result of the Illinois laws may not reflect your wishes as to the disposition of your assets and/or who will be in charge. A properly executed estate plan sets out your wishes and names the trusted persons you want in charge of your affairs during life and afterward. Estate plan documents can and often include wills, powers of attorney, living wills, and trust documents – such as living trusts, special needs trusts, or asset protection trusts.

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.

Open enrollment for Medicare runs from October 15th to December 7th this year. If you are eligible for Medicare, you are more likely than ever to be the target of Medicare related scams this year. Medicare scammers are smart and they know exactly what types of scenarios, incentives and stories are most likely to ensnare seniors.

Typical scam calls may be about a refund of premiums, the need for a new Medicare card, false offers of free medical services and bogus Medigap plans. No matter the story used, service offered, or purported identity of the caller, the objective is for the scammer to obtain the senior’s Social Security number by slowly extracting as much personal information as possible from their victim.

Here are some important things for seniors to remember about Medicare to help weed out fake callers:

At our office we are frequently approached by elderly clients who are considering a second marriage later in life. A new romantic relationship can mean new friends, new experiences, increased happiness and an overall better quality of life. That being said, older couples do have some important issues to consider when deciding whether or not to take the plunge. Adult children, retirement plans, long-term care consideration and government benefits are all topics that should be discussed thoroughly before an elderly couple decides to marry.

A particularly sensitive issue is what happens to the family home. Whether the couple decides to remarry, or decides that they would prefer to just live together, it is important to plan for what will happen to the home they decide to cohabit. Seniors in this situation are faced with the competing goals of wanting to keep the equity of the home in their family, while wanting to provide a place for their significant other to live should the owner predecease. Through the use of proper estate planning such as a life estate or properly drafted land trust, this can be achieved. Care should be taken to ensure that assets are available to maintain the home and that the owner’s family understands their wishes.

Another sticky topic, is how to pay for long-term care and what happens if one spouse requires Medicaid benefits. Long-term care can be very expensive and the Illinois Department of Human Services will require that a spouse’s assets be taken into consideration even in the face of trust and prenuptial agreements when reviewing an application for Medicaid benefits. One spouse’s refusal to make their assets available for the care of another can have a significant negative impact on Medicaid eligibility. We strongly advise against later in life marriages when the need for Medicaid benefits to pay for long-term care is relatively foreseeable.