Estate Planning Checklist

 Posted on December 31, 2012 in Estate Planning

Most Americans do not have a will, and especially not a revocable living trust. And yet, anyone that has had to deal with the estate of a deceased family member who did not have solid plans in place will tell you how frustrating, time consuming, and expensive it is to sort everything out.

If a person dies with no will or trust in place, the courts will follow state law to disperse the assets, regardless of verbal promises. If someone dies with only a will in place, the courts will have to give the document a stamp of approval before dividing up the estate. This is known as probate, and the cost of this necessary judicial step can cost more than 5 percent of the estate's value and can trap the heirs for a year or more in a legal twist to get the estate sorted out.

An easy way to avoid all that hassle that your family will have to go through by setting up the essential documents. That way, all of your assets will go exactly where you want quickly and with the least amount of expense.

1. Create an revocable living trust:

A revocable living trust allows the heirs to avoid probate and keeps you in complete control of your finances while you're alive. You can always make changes to what's in the trust and how you would like it to be managed. When you die, the person that you have designated simply takes over.

2. Fund the trust

To move an asset into your trust, simply change the title from your name into the trust's name. If you do this with your home, you can still sell it or refinance your mortgage.

3. Have a will as well

A revocable living trust protects your major assets from probate, but in a will, you can specify how you would like your non-investment possessions to be disbursed.

4. Don't make young children the beneficiary of any assets

Anyone under the age of 18 is prohibited by law from being able to directly inherit money or assets. If a minor has been named as a direct beneficiary of an inheritance or a life insurance policy, no financial institution will release that money and the child's guardian will have to work very hard to access the funds for the child. To skip the mess and legal fees, set up a trust to disburse assets to the child's guardian for the benefit of the child.

If you are setting up your trust and will, contact an estate planning attorney in Wheaton, Illinois. The Illinois Law Office of Stock, Carlson & Asso. LLC can help you with any questions and concerns that you may have to set up your documents properly.