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.

In Illinois and across the United States, people are experiencing a range of financial worries because of the ongoing health crisis still engulfing the nation. That has led to major medical expenses, lost income, the inability to pay debts, the need to use credit cards for everyday necessities and more. When the bills reach a level where they cannot be paid, people are frequently unsure of what to do. There may be a reluctance to file for Chapter 7 bankruptcy because of fears about the process, how it could negatively impact the future, and the perceived stigma surrounding it. In truth, Chapter 7 is a perfectly legal and reasonable way to get into a stronger financial situation and move forward.

Even people with significant income may need Chapter 7

For those who are fearful, it might be beneficial to know there are people who have substantial assets and major income whose debts become so onerous that they need to file for Chapter 7 to get into a better position. A National Hockey League player, Evander Kane, has filed for Chapter 7 bankruptcy in California where he is under contract with the San Jose Sharks. Mr. Kane, 29, owes almost $27 million and is facing legal claims for his debts.

In 2019, he signed a contract with his team for seven years and $49 million. He has stated that he might not play in 2021 due to the health crisis and that he has a newborn baby. He would not be paid for 2021 if he left because the opt-out date for this season was on Christmas Eve. For his career, he has earned approximately $53 million. His assets are reportedly around $10.2 million. According to the bankruptcy petition, he suffered $1.5 million in gambling losses since last year. He had other gambling costs and supports much of his family including his parents and his child.

The year 2020 made everyone think about their own mortality, which made estate planning a hot topic last year. And, as this year has started off much like last year has ended, estate planning is still a hot topic. However, many worry about the expense.

Who needs an estate plan?

In a word, everyone. Remember, estate plans include living wills (advance directive), powers of attorney, traditional wills, etc. It is not just about property division; it is about how one wants to be treated when they cannot make their own medical decision and even what one wants to happen to their body once they pass. This is why everyone needs an estate plan.

However, even though it is so important and has been such a hot topic last year and this year, less than a third of us have even drafted one such document, according to a survey by Caring.com and YouGov at least. Unfortunately, cost may be a factor in this.