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Common Estate Planning Mistakes
In many ways, estate planning is similar to dieting and healthy living. We all know that we should eat better, exercise more, and spend fewer hours in front of computer and televisions screens. Compared to the total population, only a portion actually make a sustained, consistent effort at improving their lives. The same is largely true for estate planning. Most of us understand that it is important to have a formal plan in place for when we die. We know that it will be better for our families, and it could even benefit us during our lifetime. Yet, for some reason—or many reasons—more than half of American adults do not have a will or any other type of estate plan in place.
The similarities between estate planning and healthier living do not stop there. Have you ever been at the gym when someone pointed out that you were doing a particular exercise wrong? It can be frustrating, since doing something—even if your technique is not perfect—is better than doing nothing. Estate planning is no different in that regard, but there are several common mistakes that many people make as they go through the process, including:
Issues Facing LGBTQ Families Today
With the recent change in administration, many LGBTQ parents and family members have expressed concern over the possibility of modifications to current statutes and legal precedents that may affect them and their families adversely. Though many believe such fears unfounded, it is never a bad idea to double-check that all relevant legal documents, including adoption or birth certificates, marriage licenses, and travel documents are in order.
Marriages and Estate Planning
Perhaps the primary concern of many LGBTQ families is the issue of marriage equality. While a Supreme Court decision usually settles a matter, at least for some time, the new administration has given indications that it would like to see 2015’s landmark decision in Obergefell v. Hodges overturned. While a president cannot unilaterally overturn a Supreme Court decision, he may, in theory, appoint justices who can, and this causes real concern for many. President Trump’s appointment of Justice of Neil Gorsuch seemed to validate this concern among pundits and skeptics.
Using Pet Trusts to Care for Your Furry Friends
The ASPCA estimates that about 78 million dogs and 85.8 million cats are owned in the United States. For many people, their pet is a valued member of the family. They think of their pet not as a piece of property, but as a beloved companion. If you are one of these people, it is important to consider what will happen to your cherished pet when you are not around to care for it. A pet trust is an estate planning tool which can give you piece of mind that your pet will be looked after even if you cannot be the one to do so.
What Is a Pet Trust?
A trust is an arrangement that holds property or money for a beneficiary, often for when the creator of the trust passes away. Since a person cannot leave money or property directly to an animal, a pet trust legally enforceable arrangement regarding how your pet will be cared for in the event that you cannot care for it.
Unlike a simple instruction in a will, a pet trust provides protection for your pet and expedites the process of relocating the animal. Upon your death or disability, your companion will be cared for by an individual you have delegated in an environment that you have approved. Without such a trust, your furry friend may be an afterthought throughout probate—the legal process of validating a deceased person’s estate and will—which can take a considerable amount of time. According to the law, pets are considered property and will, therefore, be treated more like furniture than a family member in the absence of predetermined arrangements. A pet trust guarantees that your pet quickly ends up where you wish him or her to be without any additional hassle. The pet trust will dispense payments to your trustee and he or she will have the responsibility of caring for your pet. You can also choose the terms by which he or she does this job.
When a Divorce Agreement Is Rejected by the Court
Usually, when a couple decides to divorce, the court prefers that the spouses create their own divorce agreement dealing with subjects like maintenance and child support. More often than not, couples are able to agree on these subjects and a divorce decree can be approved by a judge with minimal court intervention. However, there are cases when the agreement will be denied, and either the couple will need to fix a few things or the court will have to make a ruling in accordance with the current law.
Unconscionability
Illinois law holds that an agreement to divorce must not be unconscionable. Unconscionability is a doctrine dealing with contracts that prohibits terms that are so grossly unfair or skewed in favor of one party that it shocks the conscience. While this applies to all contracts, it is seen fairly often in divorces. The aim of a divorce settlement is to leave both spouses with the tools they need to live independently, and sometimes people create agreements that do not meet that criteria, whether they realize it or not.
Insurance Dedicated Funds May Help Avoid Certain Taxes
The maxim that nothing in life certain except death and taxes has persisted in American culture since Benjamin Franklin used it as a quip in a letter more than two centuries ago. While death and taxes are undoubtedly certain for most people, it is the combination of the two that can be troubling for many individuals and families. Between estate taxes, inheritance taxes, and other tax obligations, it can be expensive when a loved one dies. Through proper estate planning, you and your family may be able to limit your tax liabilities, however, and a relatively new tool may be available to help you do so.
What Is an IDF?
Insurance dedicated funds (IDFs) were introduced in the early 2000s, and despite their bland name, they have quickly become a hot item in the world of finance and asset protection. Such funds are rather complicated and subject to complex rules and regulations, but their appeal is based primarily on their ability to legally avoid taxes by meeting certain requirements.
Keeping Assets of Sentimental Value Following a Divorce
Asset distribution is a part of nearly every Illinois divorce, and it has unique potential to cause arguments and misunderstandings. Nowhere is this more common than in attempting to distribute assets with significant sentimental value. Both spouses may wish to retain an asset like a piece of art or jewelry that has good memories associated with it, and it can very often devolve into a fight over who will keep the item.
When, How, and Why?
The little details can make a difference. For example, the date, or rough date, of acquisition can often decide who actually has ownership of the item. If you or your spouse acquired the item before your marriage, it is your (or your spouse’s) property, with no obligation to share it. Illinois law holds that nonmarital property encompasses all that you owned before your marriage, unless you actively take the step of making it marital property. For example, if you own a parcel of land before your marriage, and sign half the interest over to your spouse, that land would qualify as marital property, because you took the affirmative step of involving your spouse in its administration.
How a Divorce Can Affect Your Estate Plan
Following a divorce, the terms and provisions of your estate plan may become obsolete, especially if your ex-spouse factored prominently in your plan. While there are laws that help prevent estate planning issues after a divorce, it is still a good idea to take another look at your will, trusts, and any other estate planning tools to determine if modifications are needed.
Revocable Trusts
A revocable or living trust is the most common instrument that requires review during or after a divorce. In a revocable trust, the holder of property (called a settlor) confers that property to a trustee to hold for a beneficiary while still retaining the right to take the property back. It is very common for either the trustee or the beneficiary to be a spouse.
If your former spouse is a beneficiary of a revocable living trust, there is not much of a problem. A beneficiary does not actually own the assets in the trust and will not, in most cases, until the death of the settlor. Beneficiaries can be changed fairly easily following your divorce. If a former spouse is a trustee, however, more serious issues may arise. The settlor has the right to retain the property, but the trustee retains control over the property itself. This can create complications in property division during divorce in addition to concerns regarding the future of your estate.
Reinstating Parental Rights In Illinois
In the overwhelming majority of cases, when your or your spouse’s parental rights are terminated, there is no getting them back. Normally, if parental rights are involuntarily taken away, it means that evidence of abuse or neglect has been discovered, after which it is considered too dangerous to allow the child to remain in your home. However, if there are other reasons for termination, such as a parent’s abrupt deportation, it may be possible to have the determination reversed, dependent on several different factors.
Illinois Law
Illinois is one of only a handful of states to even countenance the possibility of reinstatement of parental rights after their termination. The law holds that if filed by the Department of Children & Family Services (DCFS) or by the minor child themselves, parental rights may be reinstated if certain conditions are met, namely that the motion is supported by “clear and convincing evidence.” This is not subjective; it is a specific burden of proof that a court will insist upon before granting the motion.
The Differences Between a Living Will and a Do-Not-Resuscitate Order
When it comes to making decisions regarding the end of your life, there are many factors to consider. No matter how difficult it may be for you to think about, leaving such decisions to your loved ones to make can leave lasting feelings of guilt, regret, and wondering if they made the right choice. Fortunately, there are several ways you can prepare in advance regarding your desired end-of-life care. They represent an important but often overlooked element of the estate planning process.
Advance Medical Directives
There are two common ways in which you can make your end-of-life care decisions ahead of time, and both are considered types of advance medical directive. An advance medical directive, put simply, is contingency plan that specifies your wishes to be carried out if you are no longer able to make such decisions for yourself. Living wills and do-not-resuscitate (DNR) orders allow you to maintain control of your own life to the very end.
Domestic Violence Can Affect Parenting Time
Domestic violence is one of the most common family issues in the United States today, unfortunately, and it has an especially pernicious effect on children. If a parent who has committed domestic violence is permitted to continue seeing his or her children, studies have shown that that child has a greater propensity to perpetuate violence in the future. The state of Illinois considers it a high priority to ensure that children are not exposed to such behavior, and as such, if your spouse has charges or convictions, you may be able to mount a serious challenge to their parental fitness.
Domestic Violence Defined
Illinois’ Domestic Violence Act (DVA) of 1986 defines domestic violence as abuse, both physical and otherwise, as well as “interference with personal liberty or willful deprivation.” It also makes a point of identifying a victim as any family or household member, rather than just a spouse. Thus, the law encompasses spouses, but also family members related by blood, people who are (or were) dating or living together, and co-parents of a child who are unmarried. So, for example, if the mother or father of your child abuses you, the DVA still applies in your case, whether you are married or not.
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