When residents of the western Chicago suburbs are considering estate planning, the last thing on their minds might be the filing of a bankruptcy

However, depending on a person's circumstances, a Chapter 7 bankruptcy may be in their best interests as they move into their retirement years.

Claims do not necessarily die with a person

Debts do not always automatically go away when a person dies. The creditor has an option to file a claim against the person's estate. A valid claim will get paid first, meaning the person's loved ones get what is left over.

There are a variety of important reasons to have an estate plan. Estate planners should understand why an estate plan is needed and how they can develop an estate plan that protects the estate planner and expresses their wishes.

Avoid the probate process

One reason to have an estate plan is so that the estate planner can avoid the probate process. The probate process includes validating the estate planner's will, valuing their assets, paying outstanding debts and taxes of the estate and distributing what is left over to beneficiaries.

Protect assets and reduce estate taxes

Estate planning can help protect both the estate planner's beneficiaries and can also help protect the estate planner's assets. For that reason, trained estate planning guidance can be helpful to help with estate planning complexities.

Sitting down with one's family to discuss the future of one's assets can seem like a daunting experience. Planning one's estate may seem final and cumbersome to those who have growing assets with many moving parts.

A living, or revocable trust is meant to solve these problems. Flexible, very powerful and highly adaptable instruments, living trusts are a great asset that can be included when planning your estate.

What a living trust does

Living trusts are established during the owner's life and can be maintained by the owner or other named trustees. The purpose of the living trust is to create an easy path for one's assets to be more seamlessly passed down to the estate's beneficiaries.

You may be ready to move somewhere new right now, but you have a fair amount of work ahead of you if you intend to sell your home. Of course, you will probably have to do a lot of cleaning and a fair amount of repair work to make your lived-in home look appealing to buyers. You may even have to stage the home with temporary furnishings so it seems welcoming to a wide variety of potential buyers. You will probably want an agent to help you secure buyers and arrange showings.

And after you have got through all these steps, once you get into the actual transaction of selling you home, you have more paperwork to do. One of the most important tasks you have is to make legally required disclosures of issues with the property.

Federal and state disclosures

Disclosure requirements are designed to protect homebuyers from dishonest sellers who would try to sell them hazardous properties. The requirements come from both federal and Illinois law. For instance, the Residential Lead-Based Paint Hazard Reduction Act of 1992 is a federal law that requires sellers to inform buyers of any lead-based paint or chipped paint in any home built before 1978.

Many people are aware that estate planning may include completing a will or trust, but sometimes overlook the usefulness of a power of attorney.

A power of attorney for finances and a power of attorney for healthcare allow a person to designate someone to act on their behalf. The person who creates a power of attorney is called the principal and the person he or she appoints to act is called an agent.

Finances

A power of attorney for finances allows the agent to make financial decisions for the principal, which may include managing the principal's money. It can also include acting on behalf of the principal for insurance and tax matters, claims and other transactions.