Estate and Gift Planning
Estate planning is the process by which a person protects their assets both during their lifetime, and after their passing. A proper and effective estate plan generally avoids the entire probate process, avoids and/or minimizes estate taxes, and puts in writing your end of life and post-life wishes and desires so that you can rest easy knowing that every decision with regard to your personal and real property, and healthcare, are followed according to your plan.
At Wolf Solovy & Zivin, we understand that estate planning is not just about protecting your assets, it is ensuring your peace of mind knowing that your loved one’s futures are protected in the event of your death. Our approach to estate planning starts with our getting to know you, your assets, goals for your family and desires for health care decisions. We gather much of this information by asking you to complete an Estate Planning Questionnaire. After our careful analysis of the completed Estate Planning Questionnaire we will work with you to consider your personal and estate planning goals and provide you with the options available to best achieve your goals.
Once we develop a thorough plan, we will prepare the necessary estate planning documents taking a practical and proactive approach to achieving your goals. We always take the time to carefully explain the purpose for each document and the decision-making powers outlined in each document. Our work in this area includes:
- Preparation of wills, trusts, and related estate planning documents;
- Preparation of Property and Health Care Powers of Attorney;
- Preparation of Living Wills;
- Implementation of wealth preservation techniques, including irrevocable trusts, gift programs, and asset freezes;
- Business succession planning;
- Valuation discount planning, including family limited partnerships and qualified personal residence trusts.
We believe that a good estate plan must at a minimum (a) ensure assets are transferred according to a client’s wishes; (b) minimize tax consequences and tax cost; and (c) avoid probate. We regularly use estate planning to provide creditor protection for beneficiaries, minimizing the beneficiaries risk of loss to their creditors, as well as protection of assets in the event of a beneficiary’s divorce. It is our practice to stay in touch with our estate planning clients to assure that if the size or composition of your estate planning goals change, or if there is a change in tax law, your estate planning documents can quickly be revised to reflect your current wishes or as otherwise is needed to minimize estate taxes.
Wills & Trusts
When you think of estate planning the first thing that likely comes to mind is a Will. That is because the Will together with a Trust (discussed below) are the most important and essential parts of any estate plan. They are the primary documents that details who you want to inherit your assets and when they can receive them, how you want your assets to transfer upon your passing, it specifies who will manage your estate, and also allows you to select and name a guardian to care for your minor child(ren) in the event of an unexpected death.
In short, if you have a family (wife and/or children/dependents) and you own any real or personal property, assets, stocks, bonds, bank accounts, or other valuables THEN YOU NEED A WILL and A TRUST.
If you die without a Will (also called intestate), your estate will need to open a probate estate in a court of proper jurisdiction, and a Judge will control and direct the disposition of your assets according your State’s intestacy laws. State intestacy laws generally lay out very strict rules that determine who will take ownership of your assets and property after your passing, which could ultimately lead to an un-intended heirs inheriting your assets. The Probate process is a vigorous process that involves attorneys, a court, a judge, sometimes child advocates appointed by the Court, and all of your heirs. Probate is often times an extremely stressful, time consuming and costly process for your family.
The advantages of using Trusts are plentiful including that they may be used to (1) permit your assets to pass to the beneficiaries you select without the necessity of time consuming and costly Probate; (2) avoid or minimize estate, inheritance, and gift taxes; (3) permit you to specifically name who you want to be the trustee of the Trust; (4) document a plan for managing your personal and/or business assets if you become disabled or incapacitated; (5) establish time tables, rules and/or other requirements that your beneficiaries must meet in order to receive or access their inheritance; and (6) set aside assets for a special needs, elderly, or minor child or dependent (or even your pets) upon your passing.
At Wolf Solovy & Zivin, we have experience with virtually every type of trust. Estate plans are tailored to the individual client’s needs and therefore can differ widely depending on the client’s wealth, type of assets, property, number, and age of beneficiaries, and many other factors. We will review your specific assets, needs, and wants, we will advise you on various options, and explain the pros and cons of each. Below is a non-exclusive list of the most common trusts that we prepare for our clients:
- Revocable Trust
- Irrevocable Trust
- Charitable Remainder Trust
- Life Insurance Trust
- Generation-Skipping Trust
- Special Needs Trust
- Bypass Trust (or Credit Shelter Trust)
- Marital Trust
- Spendthrift Trust
- Spousal Lifetime Access Trust
- Testamentary Trust
- Qualified Domestic Trust
If you do not have a Will and Trust, please contact our experienced estate planning attorneys at Wolf Solovy & Zivin for a free consultation. We will work with you to give you the piece of mind you deserve.
Powers of Attorney and Advance Directives
Property Power of Attorney
We regularly prepare Property Powers of Attorney and Health Care Powers of Attorney as part of our clients’ complete estate plan. The Property Power of Attorney is an essential tool in the event that, due to age, illness, or injury, a person is unable to carry on their legal and financial affairs. Having a Property Power of Attorney will generally avoid the need to go through the time-consuming, expensive, and possibly publicly embarrassing process whereby someone has to go to court to have a person declared mentally or physically incompetent and have one or more persons appointed to serve as their legal guardian.
Healthcare Power of Attorney & Advance Directives (Living Will)
The Health Care Power of Attorney appoints an agent to make decisions with respect to their medical care in the event they are physically or mentally unable to do so. The Health Care Power of Attorney can include the type of provisions that used to be in what was commonly called a “Living Will,” allowing a person to indicate their wishes concerning the use of artificial or extraordinary measures to prolong their life artificially in the event of a terminal illness or injury.
Through asset protection planning we work with our clients to organize their business and personal affairs in advance to reduce or eliminate liability exposure and the possibility of resulting catastrophic financial loss. Our approach to asset protection involves a proactive and strategic restructuring of personal and professional assets to shield them from lawsuits, other creditor claims, and even in the case of a divorce.
We believe that effective asset protection forms only a part of our client’s wealth preservation process which, by necessity, includes both income tax planning and estate tax planning. Asset protection planning is oftentimes multi-generational. Our asset protection services begin with an analysis of a clients’ family relationships, personal and professional asset portfolios, and the clients’ goals for themselves and their families. Our goal is to formulate a cohesive plan with recommendations on how the ownership can be reorganized to maximize asset protection.
Special Needs Planning
If you provide care for a child or loved one with special needs (such as mental or physical disabilities), you must have contemplated with concern about what may happen to them when you are no longer able to provide and care for them.
While you can certainly provide that they receive money and assets, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs. These public benefits provide only for the bare necessities such as food, housing, and clothing. These limited benefits will not provide the resources that would allow them to enjoy a richer quality of life.
But if parents leave any assets to their child who is receiving public benefits, they run the risk of disqualifying the child from receiving them. Fortunately, the government has established rules allowing assets to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI and Medicaid, as long as certain requirements are met. We can help you set up a Special Needs Trust so that government benefit eligibility is preserved while at the same time providing assets that will meet the supplemental needs of the person with a disability.
The Special Needs Trust can fund those additional needs. In fact, the Special Needs Trust must be designed specifically to supplement, not replace public benefits. Parents should be aware that funds from the trust cannot be distributed directly to the disabled beneficiary. Instead, it must be disbursed to third parties who provide goods and services for use and enjoyment by the disabled beneficiary.
The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s eligibility. Special Needs Trusts are a critical component of your estate planning if you have disabled beneficiaries for whom you wish to provide after your passing.
Generally, Special Needs Trusts are either stand-alone trusts funded with a separate asset like a life insurance policy or they can be a sub-trust in your existing living trust.
Planning for Pets
It may seem frivolous to some, but to pet owners who love their pets, making sure their beloved animals are taken care of after they are gone is of the utmost importance. Properly drafted provisions in your estate plan can appoint a caregiver, appoint a money manager (a Trustee) and provide funds and specific directions for your pet’s care.
There is no assurance that if you leave money to someone outright to care for your pet that they will do what they promised to do. Additionally, the person could die and the money you provided for the care of your pet could go to that person’s heirs or beneficiaries at his or her death. A trust protects the money and allows you to select a series of backup caregivers.
The Pet Trust for your pet is part of the legally binding estate plan you create to ensure that your pets will be cared for as you yourself have cared for them. In the trust document, you provide explicit directions regarding your pet’s health care, exercise and diet needs, preferred veterinarian, and burial/cremation plans. You also determine who should get the remaining funds in the trust at the death of the pet.
Estate and Trust Administration
Probate is the legal process by which a person’s debts are paid and assets are distributed upon an individual’s death. Our knowledgeable and compassionate probate attorneys are experienced with the probate process from start to finish. It is important to consult an experienced probate attorney to ensure that the deceased’s assets are distributed correctly.
We represent estates of all sizes. So, whether a client only needs a Small Estate Affidavit to collect outstanding accounts or whether they need a probate estate opened and administered through the court, we can assist you.
If you are the executor, administrator or simply a beneficiary of a loved one’s estate, our experienced Illinois probate attorneys will walk you through the probate administration process – from the initial investigation of assets through the final distribution of assets.
We will help you by:
- Educating you about the probate process
- Opening your probate in court and preparing all necessary documents
- Handling communications between third parties such as certified accountants, appraisers, trustees, heirs, and others
- Assisting in the distribution of the assets subject to probate
- Closing the probate in court when the proceeding is complete
- Filing of Federal Estate Tax Return, Form 706 and a State Estate Tax Return
No one wants to go through the probate process and have a court oversee the distribution of their loved ones estate. It is never an enjoyable process which is why it is so important to have a properly prepared estate plan in place prior to yours or a loved ones death.
However, not every estate plan is created equal so it is only to your advantage that you have an experienced estate planning attorney assist you in this process. We often have clients coming to us at the beginning of the probate process confused as to why the estate plan documents that they found online, or that they had an inexperienced attorney prepare for them, is not protecting them from going through probate.
Poorly executed estate planning and/or family disputes can lead to estate, trust and probate litigation which is costly and draining. At Wolf Solovy & Zivin we strive to get you in the door as early as possible so that we can provide you with a strategic and well thought out estate plan that gives you peace of mind knowing that you or your loved ones are protected and taken care of.
The estate plans of many of our clients often include one or more trusts. We provide counsel to both trust grantors and trustees of these trusts. A trustee’s proper administration of a trust includes a collection of assets and payment of debts, the filing of tax returns, and preparation of accountings setting forth the trust’s income and expenses. We are experienced in representing trustees with respect to all of these duties and responsibilities.
We assist in the preparation of all documents needed to properly administer the trust. Sometimes a trust calls for a simple one-time complete distribution to the beneficiaries. Other times, assets are instead held “in trust” for the benefit of a spouse (marital trust) or for the benefit of a spouse and children (family trust). We use our legal experience and knowledge to assist and guide the trustee in the trust administration process. Our attorneys provide sophisticated legal advice to the trustee regarding discretionary distributions and guide the trustee to ensure they are acting in a prudent manner.
Estate and Trust Income Tax Planning
The current federal estate and gift tax rates have risen to a top rate of 40 percent. Additionally, many states impose a separate estate and gift tax. We regularly assist our clients to limit these taxes through:
- Proper utilization of the annual gift tax exclusion
- Full utilization of the applicable exemption amounts for federal estate and gift tax
- Implementation of planning techniques to proactively take advantage of discounting, including family limited partnerships, qualified personal resident trusts, and many others
- Other advanced planning techniques such as installment sales to grantor trusts
- Postmortem tax planning, including disclaimers
- Preparation of estate and inheritance tax returns
We combine estate planning, will and trust preparation, and estate and trust administration to protect the accumulated wealth of a family from excessive taxes.