If you have an estate plan in place, congratulations! You are already doing better than most Americans. Estate planning documents are not evergreen, however. Instead, the guarantor must review them regularly and update them whenever a significant change occurs. Perhaps the most overlooked (and potentially devastating) issue is that of divorce. Learn more about how not updating your estate plan after a divorce can put your heirs at risk, and discover how our seasoned Wheaton wills and trusts lawyers can help set things right again. 

Divorce and Your Estate Planning Documents

During a divorce, marital assets are divided and then distributed, which can drastically affect the value of your estate. As such, the exact details of your will or trust may change. There may be less to distribute to your heirs, or perhaps some specific assets went to your ex-spouse. In either case, your estate plan must be updated to reflect these changes in your net worth. Furthermore, you must practice due diligence to ensure that an oversight does not occur. For example, your divorce decree may state that your spouse is no longer entitled to any of your retirement pension plan, but if you do not change the designated beneficiary and you pass away unexpectedly, the money could still go to your ex-spouse, rather than the intended heirs. 

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It can take decades to build wealth, so it only makes sense for guarantors to want a say over how their assets will be distributed upon their death. Wills and estate plans are valuable estate planning tools that can allow you to do just that. There are some distinct differences between these two options, however, and a variety of factors can dictate which option is most appropriate for your situation. Learn more, including how our seasoned estate planning lawyers can help protect your heirs, and your estate, immediately and long into the future. 

What is a Will? 

A will is a written document that explains how a guarantor’s assets should be distributed, upon their death. A guarantor can retract or amend a will at any point in their lifetime, and an update is recommended any time that a guarantor experiences a significant change in their situation (i.e. marriage, divorce, children, etc.). Wills can also be used to name guardians for minor children. 

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If estate plans were only about money, they would not be so difficult to create. Instead, parties must first come to terms with their own eventual death, and they must consider where and how they would like money to be distributed. Since family matters can be highly complex and sometimes volatile, and the rules for handling assets upon one’s death can vary by type and situation, such decisions regarding inheritances can be more than just difficult. One possible solution is to use “lifetime gifts” as your guide. Learn more in the following sections, including how our seasoned estate planning attorneys can help with drafting your initial estate plan. 

What is a Lifetime Gift?

Lifetime gifts are often used as an estate-planning strategy for reducing federal and state taxes, which means they are most commonly used in estate plans that exceed either the $4 million Illinois state estate tax exemption or the $5.5 million federal estate tax exemption. Each gift, which may equal up to $15,000 in value each year ($30,000 maximum for married couples giving a joint gift), reduces the value of the estate, thereby reducing the amount that heirs will be taxed when they inherit it. Lifetime gifts can do more than simply lower the tax load of one’s estate, however. They can also benefit the guarantor during the estate planning process. 

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When creating an estate plan, most people ensure their children and spouse are covered. Sadly, few people consider how their death could impact their furry family members. In fact, statistics indicate that only about 18 percent of pet owners have considered making provisions for their pet in their will. This oversight, which may be partially attributed to the fact that not everyone knows you can estate plan for a pet, often results in a poor outcome for beloved animals. Learn how you can prevent such a fate for your family pet using a pet trust or comprehensive estate plan, and discover how a seasoned estate planning lawyer can assist you with the estate planning process. 

Why Include Your Pet in an Estate Plan? 

In most states (including Illinois), pets are considered property. That means, if a pet owner dies, the animal is distributed like any other asset. Unfortunately, because a pet holds no financial benefit for the inheriting heir, it may be abandoned, surrendered, or neglected due to a lack of funds or desire to care for the animal. An estate plan can reduce the risk of such an issue occurring - and not just because the guarantor usually speaks with the inheriting party to ensure there is a desire to care for the pet, but because it often allows the pet owner to set up a fund that ensures the pet is well cared for, long after they are gone. Pet owners can also elect to set up alternate or subsequent guardians for their pet, just in case something should happen to the primary heir of the animal, such as a death, the birth of a child, or the development of allergies. 

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People may put off estate planning for a variety of reasons. Most are born out of estate planning myths - assumptions that simply are not true. Learn why estate planning is an important task for everyone, regardless of their situation, and discover how a seasoned estate planning lawyer can assist you with the process in the following sections. 

“Only the Rich Need an Estate Plan”

Perhaps one of the biggest estate planning misconceptions is that the process is only for the extremely wealthy. While, yes, a comprehensive estate plan is important for reducing the tax load of the wealthy, even those with moderate to small estates can benefit from the process. Often, people do not know their true value. They may have assets that they have forgotten about, or their savings and retirement accounts may have accrued more interest than expected. If the individual has children, this alone facilitates the creation of a will, as it is important that families ensure their children end up with the guardian or guardians they feel to be the most suitable. 

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