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Park Ridge Estate Planning Law Blog

Basic concepts in real estate valuation

When a loved one or close family member passes away and leaves behind a piece of real estate, it's not always bequeathed to one individual. Sometimes, however, one family member will want to keep it and chooses to compensate the other family members for their ownership share in the property. In order to do this, the value for the property must be known.

Illinois residents seeking to assign value to real property in an estate will need to keep one primary consideration in mind: Real estate property value is a mix of its current value and the potential future benefits that property can provide its owner.

A well-crafted prenuptial agreement can protect your assets

When you're newly engaged, you probably want to focus on all your hopes for the future, not the worst-case scenario. For many people, talking about a prenuptial agreement during an engagement can feel pessimistic or even too much like business. However, the greater your existing assets and potential for obtaining additional wealth, the more important it becomes to take steps to protect yourself. While a prenuptial agreement may not be the most romantic suggestion in the world, it can help you enter into your marriage secure in the knowledge that you're both marrying for the right reasons.

When you have a lot of assets going into a marriage, the potential for fraud or deception from your partner increases. There are people out there who would marry someone with substantial assets just to acquire a portion of them during a divorce. A prenuptial agreement can protect you from this kind of behavior and lower the risk you assume when marrying with substantial assets and accumulated wealth. By creating specific expectations for the marital union and outlining the way asset division and custody will be handled in a divorce, a prenuptial agreement can actually make your marriage stronger.

The easiest thing you can do to protect your estate plan

Some Illinois residents never create an estate plan, making the days and months following their death stressful and challenging for the loved ones and potential heirs they leave behind. Other, more responsible Illinois residents create detailed and well-crafted estate plans that cover every last detail -- making things as easy as possible for the loved ones they leave behind. If you're one of the responsible ones, there's something else you might want to do to ensure that your estate plan is followed to the letter after you're gone.

This final step in your estate planning process is not that hard to do, and best of all, it's free. Nevertheless, you could be loath to do it, and you might avoid it like the plague. That's because it involves talking to your family members and heirs about your death and what you want to happen after you're gone.

The benefits of an irrevocable trust

Irrevocable trusts are some of the most popular forms of trusts out there today because of the many advantages they provide. These trusts are very easy to create and can be done with the help of an experienced attorney. Here are just a few of the benefits of creating an irrevocable trust in Illinois.

One of the biggest benefits of an irrevocable trust is the fact that it cannot be changed without the permission of the beneficiary of the trust. Even if the grantor, or person who created the trust, wants to have it changed, he or she cannot do so without permission from the beneficiary. This helps to protect the trust and all of the property and assets in it.

Why you may want to put adult kids' money in a trust

Most parents feel fortunate when they have considerable assets to pass on to their children, either while they're still alive or after they're gone. However, there are some situations where parents may not feel it's wise to give an adult child sole control over a large amount of money.

Sons or daughters may have shown that they are not responsible with money. They may have grown up with considerable wealth and don't appreciate how fast it can disappear. Just the same, when young people -- who grew up in a family of fairly modest means -- suddenly get a windfall, they may not be any more skilled at handling it.

What are the advantages of charitable trusts?

Illinois residents have a lot of options when it comes to estate planning, giving away some of their money to charity and providing for their families. Charitable trusts offer an incredible amount of options when it comes to charitable contributions that can help you with tax management, saving you and your family money.

Charitable trusts give you the ability to earmark assets to pass on to a good cause. Most estate planners choose one of two different charitable trust models for this purpose: charitable remainder trusts and charitable lead trusts. These trusts allow you to split your assets among a noncharitable beneficiary -- such as a family member -- and a charity. Perhaps the biggest benefit of charitable trusts is the fact that you can put highly appreciated assets inside them, and sell the assets under the ownership of the trust without incurring capital gains taxes.

A special needs trust can protect your child's future

When you and your spouse decide to have children, you probably hoped to give them the best possible start at life. Sometimes, no matter how careful you are during pregnancy, your child is born with a disability. Cerebral palsy, Down Syndrome and Autism are conditions that will impact your child for the rest of his or her life. With love and support from parents, these children can thrive and have beautiful, productive lives. However, you've probably been worrying for years about what will happen to your child when you and your spouse eventually die. It can be a terrifying prospect.

Special needs children and adults are frequently abused by those entrusted with their care. Professional nurses or caretakers could mistreat your child without you there to advocate on your child's behalf. Caretakers and even family members could squander the inheritance left for your child. Without adequate financial support, your child may not be able to live independently and enjoy a decent quality of life. Creating a special needs trust for your child with disabilities can help prevent these worst-case scenarios and offer you and your spouse peace of mind about the future of your special needs child.

Trusts can protect assets from creditors

Trusts have many uses throughout the scope of estate planning, both as proactive tools for directing your assets where you want them to go, as well as defensive tools for protecting your assets from unfair taxation or claims by outside parties. Many kinds of trusts can help you protect your assets from creditors or others who believe they have a claim to some or all of your property.

When we think of protecting assets from creditors, we generally think of creditors of the individual who has built the estate they wish to protect. As you fight to carve out your piece of the American Dream, there are often wrong turns or dead ends along the way, and some creditors may be very motivated to reclaim something they think you owe them through any means necessary. In these cases, you may be able to place your assets in an irrevocable trust and permanently remove them from your ownership so that a creditor cannot seek repayment from them.

Why Millennials should consider estate planning now

If you are a Millennial, should you have a will in order? Estate planning may seem like something for older folks - something you do not need to consider until you reach at least your 50s or 60s, right? Not so fast. No matter how old you are, if you have assets, you need to have a plan for distributing them after your death. Even something as modest as your personal possessions or smaller bank accounts should be covered under a will. Millennials need wills just as much as boomers or Gen-Xers. Here's how you get started.

First, you need to realize that estate plans are about so much more than simple property distribution. Your estate plan can include important health directives that allow your partner or family member to make medical choices for you. These powers of attorney or health care directives protect your future by putting your health in the hands of someone you trust - not just the person who receives the responsibility by default from the courts. This is particularly useful for modern couples who are not married, but who want to share responsibility through other legal means.

New legislation could eliminate estate tax issues for farmers

A politician in Illinois is pushing for updates to a law that he says compromises local farming families. The legislative improvements would be designed to address estate tax issues that could cause problems for agricultural legacies in the state. Reports show that Illinois is one of the most antiquated states when it comes to inheritance tax for agricultural operations and land transfer after death. A new proposed bill would repeal the older laws, allowing the state to join the majority of other jurisdictions throughout the nation.

In all, Illinois enforces a tax that ranges between about 7 percent to 16 percent for estate transfers after death. Add to that the 35 percent estate tax that can be charged for federal estate tax, and taxation for larger estates can eclipse the 50 percent mark. For small family farms, this constitutes a major tax burden that can compromise their ability to keep their business operations up and running. Those land transfer taxes cause serious harm to agricultural operations in the state, according to one Illinois representative.

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