You may have executed what you believe is a comprehensive estate plan including a will, living trust, power of attorney, advance medical directive and other important documents. But just having an estate plan is not the end of the story. There are additional steps to take to ensure your final wishes are carried out.

Communicate your intentions to your loved ones

If your loved ones do not know of your estate plan it can cause delays when it comes to carrying it out or it can lead to the mismanagement of assets. It is important to educate your loved ones about the contents of your estate plan as well as your intentions. This can avoid unwanted surprises upon your passing. Sudden wealth can lead to bad decisions, so if your heirs know well in advance what they are to inherit they can make plans to handle this windfall wisely.

Anticipate drama

Many times, families have hidden conflicts with one another that simmer below the surface while you are still alive. Your death can bring these conflicts to light, especially if one family member believes your will should not be enforced because it was made under coercion, undue influence or if they believe you were not of sound mind when the estate plan was executed. Assuming the kids will figure it out may not be the best choice. Again, education is key.

The year 2020 was a tough economic time for many in Geneva, especially if they were furloughed or lost their jobs. This financial predicament was only escalated when they acquired a significant amount of medical debt that they have no means of paying back. They are not alone. According to U.S. Census Bureau data many families have problems with medical debt.

What is considered medical debt?

In 2017, 19% of households in the U.S. had some type of medical debt. Medical debt was defined as costs people could not pay up front or when they were treated. Of households carrying medical debt in 2017, the median amount of medical debt was $2,000. When households had significant medical debt, they may not have been able to afford the essentials such as food, utilities or their rent or mortgage. Moreover, medical debt forced some families to forgo necessary medical care because they could not afford it. Some people even filed for bankruptcy due to unmanageable medical debt.

Health insurance may not cover all costs

While having health insurance helps pay for medical costs, even those with health insurance could still incur medical debt. While only 16.2% of households in which all family members were insured for the entire year had medical debt, 30.8% of households where all family members were not fully insured had medical debt. The median amount of medical debt for households with full insurance was $2,000. The median amount of medical debt for households without full insurance was $3,000. As this shows, even families who have health insurance struggle with medical debt.

Parents experience indescribable and immeasurable joy as their children grow. They shudder at the thought of life without their kids – or of their children's life without them. No wonder, then, that only 36% of parents with minor children have written a last will and testament. In the absence of that legal document, though, a minor child could confront emotional and financial uncertainty.

Intestacy means only the law matters

When one dies without a will, or intestate, state law determines much of a child's future. Illinois, for example, distributes intestate assets per stirpes, which roughly means equally. Importantly, the number and type of other surviving kin will dictate what a child, or children, receives.

Naturally, young parents also could assume a family member will care for their children – but without a will, the courts will play an active role in that determination. A guardian will assume legal custody of the child should unforeseen events in either the parents' or the presumed caretaker's lives occur. In Illinois, guardianship and its cousin conservatorship require court approval.

Trusts are a potentially valuable part of estate plan to consider and to understand. For that reason, estate planners should be familiar with the benefits of including a trust in their estate and what they do.

Advantages of a trust

There are a variety of different potential advantages of a trust to be aware of including:

• Placing conditions on how and when the estate planner's assets are distributed;
• Reducing estate and gift taxes;
• Distributing assets to beneficiaries efficiently without the cost, delay and publicity of the probate court. Probate can cost between 5% to 7% of the estate planner's estate and may be costly and time consuming;
• Better protecting the estate planner's assets from creditors and lawsuits; and
• Naming a successor trustee who will manage the trust after the estate planner passes and is also empowered to manage the trust assets if the estate planner becomes unable to do so.

Choose from various types of trusts

Additionally, there are a variety of different types of trusts that can help the estate planner achieve different goals and that can serve different purposes on their own or as part of an estate plan. A trust can be used alongside a will as part of an estate plan or may be used on its own in place of a will.

Many people in Illinois probably think of bankruptcy options as a “last resort” when it comes to financial problems. And, some will even think that there is “shame” involved in considering bankruptcy options. In many cases, these concerns may come from a lack of knowledge when it comes to the basics about the bankruptcy process, particularly Chapter 7 bankruptcy.

Chapter 7 bankruptcy basics

Chapter 7 bankruptcy is, perhaps, the most common form of bankruptcy that individuals and families pursue. It is commonly known as “liquidation” bankruptcy. At its most basic, this form of bankruptcy allows an individual to list assets alongside debts, have the assets sold off by a bankruptcy trustee and then have the proceeds from those sales applied toward outstanding debt. In the end, any debt remaining is discharged and the filer has a “clean slate.”

Of course, there is more to it than that. For example, not all of your assets will be included in the bankruptcy case. Some assets are “exempt” from the bankruptcy process. And, another perk is that as soon as you file your bankruptcy case an “automatic stay” is implemented, which means that creditors can no longer harass you about your debt or missed payments.