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Park Ridge Estate Planning Law Blog

How do I get information about my deceased sister's condo?

Imagine you're serving as the executor of your deceased sister's estate. Your sister owned a condo in a neighboring city and for you to carry out your executorship duties, you need to get information about the unit from the condo manager. What information will you need to present to prove your status as executor?

When the owner of a condo passes away, and no trust agreement controls the condo, the potential heirs of the condo will have to start a probate estate. Through the probate process, the deceased person's assets -- including the condo -- will be transferred according to the will or governing laws.

Premarital agreement: Points to remember

Thinking about the possible end of a marriage before the nuptials even begin isn't something that most people want to do. Even though it is unpleasant, taking a moment to devote time to this important -- but often overlooked -- subject this can actually help strengthen your marriage.

A prenuptial agreement protects you and your future spouse in the event the marriage ends. These agreements have to be handled carefully so that you can be sure they are legally enforceable if the time comes to use them. Here are some considerations for premarital agreements:

Can my family benefit from a spendthrift trust?

When an Illinois estate planner is worried that his or her heirs cannot handle receiving a large sum of money all at once, a spendthrift trust could be appropriate. A spendthrift trust will dole out your heirs' inheritances to them slowly over time -- perhaps in monthly distributions -- so that there's less danger of your heirs mismanaging the money and spending it irresponsibly on frivolous expenditures.

When properly done, a spendthrift trust will be supervised by a trustee. Often the trustee will be either a trusted individual or a financial institution that will manage the money you leave behind and slowly dole it out to your heirs. For example, you might designate a financial advisor to serve as the trustee of the spendthrift trust. That advisor will see to it that the assets inside the trust are invested safely so they generate income for the beneficiary.

What is a life estate?

Imagine that you want to provide money and income to a specific beneficiary in your estate plan; however, you want to ensure that additional assets will be available to someone else after the first beneficiary dies. For example, maybe you want your spouse to benefit from your estate, but you want the core of your estate to be inherited by a child after your spouse passes away.

In a situation like this, you might benefit from a "life estate." Such an estate will last the lifetime of a specific beneficiary. It will also be restrictive, preventing the beneficiary of your estate from liquidating any income-producing assets prior to his or her death. The life estate, however, will dissolve following the death of the beneficiary, and a different beneficiary -- selected by you -- will then receive the remaining assets.

The Illinois death tax: Will your heirs have to pay?

Illinois is one of the few states that still charges its residents a death tax. This means that when you die, depending on the size of your estate, your estate may be subject to pay part of its value to the state of Illinois. The question is, will your estate be subjected to the death tax, or will it be exempt?

Since 2013, Illinois estates will receive an estate tax exemption up to $4 million. For estates valued at more than $4 million -- on the other hand -- they will be subjected to the death tax. The state of Illinois will estimate the value of your estate for the purpose of taxing it by looking at the value of all your assets, including bank accounts, real estate and other items of value.

What's a mutual will?

A mutual will is a common estate planning tool that governs the estate of more than just one person. Usually, the people who enter mutual wills with one another are married couples or couples who are in seriously committed relationships.

Your mutual will is considered "mutually binding." This means that if one person passes away, the other party of the will must follow the terms of the document. The primary reason why people enter into a mutually binding will is to protect the inheritances of their children. Let's say you want to leave $100,000 to each of your children, but you've remarried and your current spouse is not the biological parent of your children. To ensure that your new spouse does not absorb all of your assets into his or her own estate, you can have your new spouse agree to eventually pass on certain assets to your children in the event of your death.

What kinds of trust options are available?

If you're planning your estate in Illinois -- and you want you and your family to benefit from potential tax savings, privacy and the ability to avoid probate -- you may want to consider one of many different trust options.

Trusts allow you to remove yourself as the owner of certain assets, so that you can achieve various estate planning goals.

Did your employer start deducting more taxes from your paycheck?

If you work for an employer in Illinois that deducts tax money from your paycheck each week, you may have noticed that more deductions are being applied to your salary. Since last July, human resources departments throughout the state have been notified of the increased state income tax obligations that Illinois workers must pay.

How much more are you paying exactly? The actual dollar amount you must pay in taxes will be different depending on the level of your salary. Percentage-wise, you will be paying 1.2 percent more in taxes on every paycheck. Formerly, the state income tax was 3.75 percent and now it is 4.95 percent. This increase applies to all pay retroactively beginning on July 1, 2017.

How to get started with a charitable trust

If you want to protect your heirs from incurring large capital gains taxes on an asset that has increased significantly in value -- or if you want to sell an asset and benefit from the profits without getting hit with the taxes -- a charitable trust could be the right choice for your needs.

With a charitable trust, you transfer ownership of specific property to the trust, then the trust liquidates the property. As the beneficiary of the trust, you will receive regular distributions from the trust. Then, when you die, the remainder of the trust will go to the charity of your choice.

What are my duties as the executor or administrator of an estate?

Were you named as the executor or administrator of a deceased loved one's estate? The responsibility can easily feel overwhelming, especially if you've never had to undertake this kind of role before.

Illinois residents have a lot of important duties they will be responsible to fulfill when they serve as the administrator or executor of an estate. 

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Park Ridge, IL 60068-3272
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