Estate Planning Lawyer

Mistakes New Parents Make with Money

Mistakes New Parents Make with Money

The prospect of becoming a parent is exciting, but it’s also stressful, due to the sleepless nights and the never-ending expenses associated with caring for a child. The latest research from the USDA found that the average middle-income family spends about $12,300 to $13,900 on child-related expenses annually. New parents ought to plan ahead to avoid common money mistakes.

The Street’s recent article entitled “Biggest Money Mistakes New Parents Make” says that with the current economic issues from the coronavirus pandemic, 59% of U.S. households are seeing a reduction in income since March. That’s why it’s more important for families to carefully create a budget, anticipate all potential expenses and watch their spending. To do this, new parents should avoid five common money mistakes made by new parents.

  1. Getting Big. Upgrading your home and car for a new baby seems practical. However, this adds an unnecessary financial burden during an already tough time. Little babies don’t require much space. Because there are many new expenses in caring for an infant, such as diapers and unanticipated medical bills, new parents should try to settle into their new life first and adjust to the new budget prior to making major upgrades.
  2. Lowballing Childcare Costs. Parents can pay about $565 per week for a nanny and $215 for a daycare center says Care.com. However, in addition to the working day, parents can miss planning for the additional care they may need on nights and weekends. This can add up, with the average hourly rate for a babysitter at $15. New parents ought to consider setting up a babysitting exchange with other families in the neighborhood or with relatives who have children around the same age. This can be a big saver.
  3. No life insurance or estate planning. It’s not a fun topic, but life insurance and estate plans provide financial safety nets for your family. Talk to an experienced estate planning attorney, and when looking into term life insurance, try to buy five to 10 times your annual salary in coverage.
  4. Too much spending on gadgets. New parents can go crazy shopping for new clothing and infant gear, thinking that these things will make caring for baby easier. This can be a mistake! Many of these items are only used for a short while, so it’s better to borrow or buy used. For essentials, you can’t avoid buying items like a car seat or crib, but search for deals online first.
  5. Delaying Saving for College. College is way off but the earlier you start saving, the easier it will be to meet your savings goal. The longer you delay beginning to save, the more money you’ll need to put away each month. Saving a little bit is better than nothing, even if it’s just $20 a month. You can also start a 529 College Savings Plan to help your savings grow like a retirement fund.

Reference: The Street (Sep. 9, 2020) “Biggest Money Mistakes New Parents Make”

Should I Write My Will During the Pandemic?

Should I Write My Will During the Pandemic?

Writing a will allows you to instruct your executor how you want your assets to be distributed when you die. If you have minor children, your will ought to include instruction on who will raise them if you die and their other parent is deceased.

The Oakland Press’s article entitled “Writing a will today is more important than ever” says that if you pass away before writing a will, the state will make these critical decisions for you. What the state decides may not reflect your wishes. This may create conflict and stress within your family and cause financial troubles for those you leave behind. It may be important to note that, in this scenario, none of your assets will go to your favorite charities.

Writing a will, as with other estate planning documents, is critical because this gives you control over how your affairs are handled when you die. This includes the way in which your assets are distributed and who will take care of your children, if they’re minors.

When you are writing your will, it’s important that it’s legally valid. There’s no guarantee that a will prepared without an estate planning lawyer will meet the criteria. If the probate judge doesn’t accept your will, it’s as if you died without one.

As a result, it’s very important that you work with a qualified estate planning attorney writing a will. If you don’t, it is possible that your will or other estate documents you purchased online might not meet the state requirements.

Therefore, you’ve wasted money, and your instructions may not be followed. This can mean uncertainty in how your estate is eventually administered, and it can make an already stressful situation even worse for your family.

An experienced estate planning attorney can make sure your will meets the state’s requirements, decreases hard feelings within your family and keeps your family from challenging its validity in court.

If you have written a will already, consider updating it, especially if a beneficiary listed on the document has died, if you’ve sold your home and bought another, given away some of your possessions, your financial circumstances or the value of your property has changed, or your charity relationships have changed.

You may want to change your estate plan when your children become adults or if others that were provided for in the estate plan are no longer living.

Writing a will is a delicate process that requires the expertise of a professional estate planning attorney.

Reference: Oakland Press (May 16, 2020) “Writing a will today is more important than ever”

How Can I Avoid Family Fighting in My Estate Planning?

How Can I Avoid Family Fighting in My Estate Planning?

It’s not uncommon for parents to modify their first estate plans, when their children become adults. At that point, many parents’ estate plans are designed to help efficiently transfer assets to the surviving spouse and ultimately to the adult children. Avoid family feuds and fighting in your estate plan by working with a professional estate planning attorney. With proper estate planning counsel, hiccups and headaches will be few and far between.

Forbes’ recent article entitled “Three Steps To Estate Planning Without The Family Friction” explains that there are a number of reasons for siblings fighting in the inheritance process. The article says that frequently there are issues that stem from a lack of communication between siblings, which causes doubts as to how things are being done. In addition, siblings may not agree if and how property should be sold and maintained. To help avoid estate planning fighting, use this three-step process for estate planning. After all, family feuds and animosity are avoidable.

Work with an experienced estate planning attorney. Hire an estate planning attorney who has many years of working in this practice area. This will mean that they’ve seen—and more importantly—resolved every type of family fight and discrepancy that can arise in the estate planning process. That’s the know-how that you’re really paying for, in addition to his or her legal expertise in wills and trusts.

Create a financial overview. This will help your beneficiaries see what you own. A financial overview can simplify the inheritance process for your executor, and it can help to serve as the foundation for you and your executor to frankly communicate with future beneficiaries to reduce any lingering doubts or questions that they may have, when they’re not in the loop. This clarity replaces estate planning fighting with resolution. Your inventory should at least include the following items:

  • A list of all assets, liabilities and insurance policies you have and their beneficiaries
  • Contact information for all financial, insurance and legal professionals with whom you partner;
  • Access information for any websites your beneficiaries may need for your online accounts; and
  • A legacy letter that discusses non-financial items for your children.

Hold a family meeting. Next, conduct a family meeting that includes the parents and the children who will be inheriting assets. Some topics for this meeting include:

  • The basics of your estate intentions
  • Verify that a trusted person knows the location of your important estate documents
  • State who your executor and other involved people will be and your rationale
  • Make certain that all parties value communication and transparency during this process; and
  • Discuss non-financial legacy items that are important for you to give to your children.

This three-step process can help keep your children’s relationships intact after you are gone. The last thing that any family wants to experience upon the death of a loved one is drawn-out fights regarding ones estate. Hiring an experienced estate planning attorney, creating a clear financial overview and communicating what’s important to you are critical steps in helping to keep your family together.

Reference: Forbes (July 2, 2020) “Three Steps To Estate Planning Without The Family Friction”

Beginning Estate Planning

Beginning Estate Planning

When beginning estate planning, it is helpful to clarify what the essential elements of a proper estate plan are. AARP’s recent article entitled “Sign These Papers” suggests that the following documents will give you and your family financial protection, as well as peace of mind. Beginning estate planning can be intimidating, but with appropriate guidance, you will reap the benefits for years to come.

Advance Directive. This document gives your family, loved ones and medical professionals your instructions for your health care. A living will, which is a kind of advance directive, details the treatment you’d like to have in the event you’re unable to speak. It covers things like when you would want doctors to stop treatment, pain relief and life support. Providing these instructions helps your family deal with these issues later.

Durable Power of Attorney for Health Care. This document, regularly included in an advance directive, lets you name a trusted person (plus a backup or two) to make medical decisions on your behalf, when you’re unable to do so.

Revocable Living Trust. Drawn up correctly by an experienced estate planning attorney, this makes it easy to keep track of your finances now, allow a trusted person step in, if necessary, and make certain that there are fewer problems for your heirs when you pass away. A revocable living trust is a powerful document that allows you to stay in control of all your finances as long as you want. You can also make changes to your trust as often as you like.

When you pass away, your family will have a much easiest task of distributing the assets in the trust to your beneficiaries. Without this, they’ll have to go through the probate process.  It can be a long and possibly costly process, if you die with only a will or intestate (i.e., without a will).

Will. Drafting a will with the guidance of an experienced estate planning attorney lets you avoid potential family fighting over what you’ve left behind. Your will can describe in succinct language whom you want to inherit items that might not be in your trust — your home or car, or specific keepsakes, such as your baseball card collection and your Hummel Figurines.

Durable Financial Power of Attorney. If you’re alive but incapacitated, the only way a trusted person, acting on your behalf, can access an IRA, pension or other financial account in your name is with a durable financial power of attorney. Many brokerages and other financial institutions have their own power of attorney forms, so make sure you ask about this.

Beginning estate planning is not complete without these five documents (sometimes four, if your advance directive and health care power of attorney are combined). Drafting a proper estate plan will allow you to enjoy a happier, less stressful life.

In drafting these documents, you know that you’ve taken the steps to make navigating the future as smooth as possible. By making your intentions clear and easing the inheritance process as much as you possibly can, you’re taking care of your family. The benefits of beginning estate planning today will be enjoyed for years to come. Your family will be grateful that you did.

Reference: AARP (August/September 2018) “Sign These Papers”

How Does My Estate Plan Change After Divorce?

How Does My Estate Plan Change After Divorce?

Estate planning after a divorce involves adopting a different type of arithmetic. Without a spouse to anchor an estate plan, the trustees, guardians or health care proxies will have to be chosen from a wider pool of those that are connected to you. As with all significant life changes, a recent divorce requires immediate changes to your estate plan.

Wealth Advisor’s recent article entitled “How to Revise Your Estate Plan After Divorce” explains that beneficiary forms tied to an IRA, 401(k), 403(b) and life insurance are just some of the key documents that will need to change, reflecting the dissolution of the marriage.

It is important to note that there are usually estate planning terms that are included in agreements created during separation and divorce. These may call for the removal of both spouses from each other’s estate planning documents and retirement accounts. For example, in New York, bequests to an ex-spouse in a will prepared during the marriage are voided after the divorce. Even though the old will is still valid, a new will has the benefit of realigning the estate assets with the intended recipients.

However, any trust created while married is treated differently. Revocable trusts can be revoked, and the assets held by those trusts can be part of the divorce. Irrevocable trusts involving marital property are less likely to be dissolved, and after the death of the grantor, distributions may be made to an ex-spouse as directed by the trust.

A big task in the post-divorce estate planning process is changing beneficiaries. Ask for a change of beneficiary forms for all retirement accounts. Without a stipulation in the divorce decree ending their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy may still receive the proceeds at your death.

Divorce presents changes to your children in terms of planning your estate. For one, divorce makes children assume responsibility at an earlier age. Adult children in their 20s or early 30s typically assume the place of the ex-spouse as fiduciaries and health care proxies, as well as agents under powers of attorney, executors and trustees. Further, if the divorcing parents have minor children, they must choose a guardian in their wills to care for the children, in the event that both parents pass away.

Ask an experienced estate planning attorney to help you with the issues that are involved in estate planning after a divorce.

Reference: Wealth Advisor (July 7, 2020) “How to Revise Your Estate Plan After Divorce”

Why Customize Your Estate Plan?
Customize your estate plan to reflect the needs and wants of your family.

Why Customize Your Estate Plan?

A well-written estate plan is customized and unique. The only thing worse than having no estate plan, is an estate plan created from a ‘fill-in-the-blank’ form, according to the recent article “Don’t settle for a generic estate plan” from The News-Enterprise. Compare estate planning to buying a home. Before you start packing, you think about the kind of house you want and how much you can spend. You also talk with real estate agents and mortgage brokers to get ready. The planning process is detailed, and more importantly, catered to your needs and wants.

Even when you find a house you love, you don’t write a check right away. You hire an engineer to inspect the property. You might even bring in contractors for repair estimates. At some point, you contact an insurance agent to learn how much it will cost to protect the house. You rely on professionals, because buying a home is an expensive proposition and you want to be sure it will suit your needs and be a sound investment.

The same process goes for your estate plan. Consulting a skilled professional, an estate planning attorney, will prove to be worthwhile in the long run. You may even consider weighing input from trusted family or friends. It is important to work with a professional attorney who will offer expert advice in customizing your estate plan.

An estate planning attorney will also help you to avoid problems you may not anticipate. If the family includes an individual with special needs, leaving money to that person could result in their losing government benefits. Giving property to an adult child to try to avoid nursing home costs could backfire, making you ineligible for Medicaid coverage and cause your offspring to have an unexpected tax bill. These are the very considerations that our team makes in preparing your personalized estate plan.

To the surprise of many, once your estate plan is completed, it’s not done yet. It is important to communicate your estate plan with the necessary parties. Make sure that the people who need to have original documents—like a power of attorney—have these documents, or tell them where they can be found when needed. Keep in mind that many financial institutions will only accept their own power of attorney forms, so you may need to include those in your estate plan. Medical documents, like advance directives and healthcare powers of attorney, should be given to the people you selected to make decisions on your behalf. Make a list of the documents in your customized estate plan and where they can be found.

Preparing an estate plan is not just signing a series of fill-in-the-blank forms. A well-done estate plan is customized and unique. An estate plan, after all, is a means of protecting and passing down the legacy that you have devoted a lifetime to creating, no matter its size.

Reference: The News-Enterprise (June 23, 2020) “Don’t settle for a generic estate plan”

Family Stress in Funeral Planning
Allow your family to grieve your loss without the hassle of complex funeral planning and afterlife arrangements.

Family Stress in Funeral Planning

Making your way through the process of the death of a family member is an extremely personal journey, as well as a very big business that can put a financial strain on the surviving family. Planning ahead by making afterlife care and funeral arrangements now is the only way to ensure that your family’s responsibilities remain hassle-free after your death. Rate.com’s recent article entitled “Plan Your Own Funeral, Cheaply, and Leave Behind a Happier Family”  notes that on an individual basis, it can be a significant cost for a family dealing with grief. The National Funeral Directors Association found that the median cost for a traditional funeral can cost more than $9,000. Considering the cost of a plot and the services of the cemetery to take care of the burial and ongoing maintenance and other expenses,  it can total more than $15,000. If you opt for cremation and a simple service, it may run only $2,000 or less. That would save your estate or your family $13,000. Regardless of your intentions, it is important to consider the amount of legacy that can grow from your last wishes. Researching the specifics of your arrangements can be difficult. Without directions, your grieving family is an easy mark for a death care industry that’s run for profit. This can be especially problematic when death creeps up suddenly and plans need to be made at a sudden notice. Even with federal disclosure rules, most states make it nearly impossible to easily compare among funeral service providers, and online price lists often aren’t required. Further, funeral homes aren’t typically forthright about costs that are required, rather than optional. The median embalming cost is $750. However, there’s no regulation requiring embalming. Likewise, a body need not be placed in a casket for cremation. The median cost for a cremation casket is $1,200 but an alternative “container” might cost less than $200. Our office can help you navigate these intricacies and overcome the seemingly endless money traps laid out by the death care industry. Doing the legwork now will make it easier on your family when you pass. The best thing you can do for your family is to write it down your wishes and plans and make it immediately discoverable. A detailed will and testament provides your family with guidance that simplifies life when you’re gone. It can be a great relief to tell your family everything you want (and don’t want). Be certain that you detail of all your wishes in writing. You should also make sure that the document can be easily located by your executor. Here’s a simple option: Write everything out, place your instructions in a sealed envelope and let your children and the executor know the location of the letter. This elementary step can be the start to helping their decision-making when you pass away, and potentially provide some extra money to help them reach their goals. For more detailed planning and secure services, reach out to our office today. Reference: rate.com (June 21, 2020) “Plan Your Own Funeral, Cheaply, and Leave Behind a Happier Family”

What are the Most Important Items in an Estate Plan During the Pandemic?

KCRA’s article entitled“5 things to know about estate planning” says that estate planning is a topic that people frequently don’t like to think about. It’s often regarded as grim. However, more people now want to create a will or revise one that’s already in existence, because of the COVID-19 pandemic. With health and safety taking center stage, ignoring your financial security can be catastrophic.

You should have a will. You can find forms online, or you can (in some states) use a holographic will, which is handwritten. However, a holographic will can be incomplete and unclear. DIY estate planning isn’t a good idea if you have any property, minor children, or want to save on taxes for your family. Use an experienced estate planning attorney to ensure that you are covering all of your bases. The Law Office of Michael T. Huguelet, P.C. is at your service to bring ease and comfort to your estate planning journey. With over 40 years of legal experience under our roof, we have the skills and tools to get the job done.

estate tax planning in orland park, illinois
The Law Office of Michael T. Huguelet, P.C. will tackle your estate planning today, ensuring your peace of mind tomorrow.

Without a will, your “state” makes one for you. We put family first. Many people fail to realize the implications of life without a will. If you die intestate, state law will dictate how your probate estate will be distributed at your death. This makes it take longer to administer your estate, which extends the grieving process for family members.  It is also more expensive, more time-consuming and more work for those you leave behind. Lastly, you have no say in how you want your property distributed.

Why do I need a will? No one is immune to the importance of estate planning. Everyone should think about estate planning and have an estate plan in place. This should include what would happen, if you’re incapacitated. With the coronavirus pandemic, this might mean contracting the disease and being in a hospital on a ventilator for weeks and unable to care for your children. While admittedly grim to imagine, it is critical to prepare for the worst. With vested interest in both you and your loved ones, we respect a plan that fits the individual.

How long does a will take? Drafting your will is a very personal and customized process that usually happens over several meetings with a qualified estate planning attorney. It could be weeks or months, but the average length of time it takes to create a will is 30 to 60 days. In the midst of the pandemic, our attorneys are able to get these completed much more quickly. Become a client today to kickstart your estate planning. We are working around the clock to help families like yours.

What about COVID-19? When your will is complete, there’s usually a signing meeting set with the attorney, witnesses, a notary and the person creating the will. However, now there’s no way to safely gather to sign these critical documents. Many states have made exceptions to the witness rule or are allowing processes using technology, known as remote notarization. Call today to learn more about our updated signing meetings in the midst COVID-19.

Reference: KCRA (April 16, 2020). “5 things to know about estate planning”

For more helpful information on estate planning, visit: The Big Eight: Don’t Risk Your Retirement with These Mistakes

Is Your Estate Plan COVID-19-Ready?

Is Your Estate Plan COVID-19-Ready?

 

Even if you have done comprehensive estate planning with the guidance of a qualified attorney, you may want to re-evaluate certain elements of your plan now, through the lens of the COVID-19 pandemic.  Reviewing your estate plan with an attorney will provide guidance and piece of mind that your affairs are in order.

Why make changes? There are two uniquely challenging aspects of this pandemic that your current plan may not adequately address.

  1. Medical treatment for severe cases of COVID-19 frequently involves intubation and ventilator therapy to combat respiratory failure, and
  2. Quarantine and isolation orders blocking hospital visitors create some communication barriers between patients, doctors and family members.

So, how might these unique challenges impact your estate plan?

Living Wills. If your living will contains a blanket prohibition on intubation, you may want to reconsider that decision.

Durable Powers of Attorney (DPOA). Given the communication difficulties that may arise when a patient is hospitalized during the COVID-19 pandemic, you may want to revisit the terms of your DPOA to make it easier for your agent to act on your behalf.

Health Care Power of Attorney. A health care power of attorney allows you to appoint someone else to act as your agent for medical decisions. Under normal circumstances, this person would likely confer with your attending physicians in person and again, these in-person communications may be difficult right now. You want to add language to expressly authorize electronic communication with your agent.

The attorneys of the Law Office of Michael T. Huguelet, P.C. focus primarily in this area of the law and can advise you on whether your current estate plan accurately represents your wishes during this uniquely challenging time.  Our offices are open and ready to assist you with preparing a new estate plan or tailoring an update to your estate plan during the COVID-19 pandemic.

Resource: ElderLawAnswers, Three Changes You May Want to Make to Your Estate Plan Now Due to the Pandemic, April 30, 2020