Even though it is the season for giving, this year has been difficult for many people due to the COVID-19 pandemic. Coronavirus has resulted in not only a global health crisis but an economic downturn as well. Numerous individuals across the country may have felt the impact, whether it is a pay cut or a job loss. Many people may be contemplating their financial future, regardless of their job status. Tax issues can be complex, but there are various ways to reduce estate and inheritance taxes. For instance, Illinois tax laws provide tax benefits if retirement funds are left to designated individuals, and certain kinds of trusts can reduce estate and inheritance taxes that an individual has to pay. There are valuable tools that can be utilized in the estate planning process, and an experienced attorney can assist you in creating a comprehensive estate plan.

Monetary Gifts at the End of the Year

These days, many individuals are now doing their Christmas shopping online as a result of COVID-19. Stores all over the country are temporarily closed in an effort to stop the spread of the contagious virus. For those who have a difficult time picking out the perfect gift, a good alternative is to give money. That way, the recipient can buy whatever he or she likes. Giving money to family members or friends this Christmas can also be a smart tax planning move. Gifting cash now can help you reduce or even avoid estate taxes after you die.

A special needs trust is typically established by parents for a disabled child, or for disabled adults who are eligible for aid that will be lost if there are assets in their parent or guardian’s names only. It is a legal and fiduciary arrangement that allows a physically or mentally disabled person to receive income without interrupting or interfering with his or her eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, Medicare, or Medicaid. For disabled beneficiaries, this financial support can make their lives more enjoyable and fulfilling. Also known as a supplemental needs trust, this kind of trust may be a necessary part of your Illinois estate plan. An experienced estate planning attorney can help you draft this essential legal document to protect your family member.

Protecting Your Loved One

According to Illinois law, two types of supplemental needs trusts can be established: third party supplemental needs trusts and supplemental needs payback trusts. Both trusts provide the disabled beneficiary with the ability to improve his or her quality of life through services or assistive equipment that he or she would not receive with government assistance programs.

The time after a loved one’s passing is hard for all grieving family members, and it can be even more difficult when disputes arise over the decedent’s wishes or the validity of the will. As you prepare your estate plan, you should consider what you can do to prevent these disputes from happening after your death so that your family remains intact and well-provided for. The following tips will help prevent a contested estate.

Creating an Illinois Estate Plan to Minimize Disputes

Many contested estate disputes happen because family members are dissatisfied with how the terms of the will affect them, while others may be based more firmly on legal grounds. You should, of course, make sure that the terms of your estate plan reflect what you truly want, but there are also steps that you can take to help your family and beneficiaries understand your reasoning and show that you were of sound mind when making your decisions. These include:

In the instance that you become unable to handle your own affairs, either financially or medically, it is important that you have a power of attorney (POA) set in place. This allows you to designate who will be in charge of your affairs if you are unable to do so on your own. The person designated to handle the affairs is known as the “agent” and the person who the POA concerns is known as the “principal.” If you are intending on getting your affairs in order, it is important to work with a reputable estate planning attorney to ensure that the POA is valid and the proper terms are included.

General POA Requirements

There are a number of requirements that must be met when creating a POA in the state of Illinois. In order for the legal document to be valid, the agent must be designated by name and their powers must be outlined. POAs are unique to your circumstances so you should include, in detail, what your agent is legally responsible for. This person must be at least 18 years of age. The POA must be signed by the principal and at least one witness must be present. The principal must also acknowledge their signature, and thus their consent to the POA, in front of a notary public, or attorney.

Although many people assume that a last will and testament is the only estate planning tool that they need, a will is not always the best way to accomplish all of your estate planning goals. Other estate tools such as living trusts are often overlooked due to confusion or misunderstandings about the purpose of these tools. A trust is a legally binding agreement involving an individual or entity called a trustee who holds property for the benefit of a beneficiary. A living trust is an advantageous tool for managing your assets during your lifetime and then passing those assets to beneficiaries upon your death. If you are interested in using a living trust to manage your assets, you may question whether you should use a revocable living trust or an irrevocable living trust.

Revocable Trusts