Although formulating an estate plan is becoming more common for Illinois residents, there is still a perception that only those who are of significant means need to have one. This is a mistake that can be costly in multiple ways. Not only does it hinder attempts to preserve assets, but it can have tax implications, spark family disputes and cause other problems that are avoidable. Having a basic estate plan is critical and there are several reasons for these that people might not have considered.
Probate is the process in which the person who took out an estate plan – the testator – has his or her will “proved” to be valid. While probate is often necessary, it can be costly and time consuming. It is also public so there is a lack of privacy. If there is a desire on the part of the testator to avoid probate, it is vital to have legal help in determining how to do that. It can be achieved by having a trust instead of a will.
Trusts can maintain control. The testator can determine how his or her assets are distributed, what they will be used for and if the heirs must complete certain tasks or milestones to gain access to the items in the trust. For example, if there is a minor child or someone who is a legal adult but is not deemed to be of sufficient maturity to handle a sudden windfall, no matter how moderate, there can be stipulations or limitations on what they can receive and when. A trustee can oversee the assets and distribute them accordingly.
Even people of lesser means might want to have a legacy. With a legacy, the testator can have requirements that stop heirs from taking all the assets they stand to inherit and using them in short order on frivolous items. Even moderate and small estates can be wasted. For some, a small business was built and the testator wants it to continue operating. A partner or a loyal employee can be part of the estate plan. Ensuring the document is complete and addresses all potential concerns is essential for the plan to be viable even if there are limited assets in it.
An estate plan should not be ignored, nor should a person wait until there is an illness or a life-changing event to craft one. For those of moderate means, estate planning is a wise decision to protect their family, their interests and their life’s work. Calling a law firm that has experience in estate planning should be the first step toward having a comprehensive document.