We are in a historic time of uncertainty and death. Every day, we are faced with news reports of the national crises and accompanying death toll that seems to never stop increasing. Naturally, as a result, many of us are now looking to create or update our estate plans to ensure that, if the unthinkable happens, our families are protected. This may be one of the only bright sides of 2020, though, we must be mindful of the estate planning process to ensure that we do not cause more harm than good.
Tip 1: retitle trust assets immediately
Estate plans often include revocable living trusts. These are used because they avoid probate and some taxes, which ensures that one’s beneficiaries have less burdens after one’s death and the estate value is maximized. However, this also means that title to one’s assets must be put into the name of trust. If one forgets to do this, and they subsequently die or become incapacitated, all the assets not in the trust (i.e., all the assets not retitled into the trust’s name) will likely need to go through probate. This, of course, defeated the entire point of the estate plan.
Tip 2: pay attention to who is named as an owner on bank accounts
Another common error is bank accounts. If one plans to split their assets equally among their children, be sure that none of those children are named on joint bank accounts. This is what is called joint with right of survivorship. Essentially, when one passes away, regardless of what one’s will states, the surviving owner on a joint account owns all the assets in that account. If one’s will states otherwise, this will definitely cause familial strife and, of course, probate litigation, which again, will likely nullify one’s estate plan wishes.
These are just two tips among hundreds of potential tips that an Illinois estate planning attorney can help with. For those without one or for those looking to update their estate plan, contact one immediately.