When many people consider estate planning, they assume it is only for the very wealthy. They think it is just a way for very rich people to protect their assets – and those of their heirs – from large tax consequences owed to the government. However, that is simply not the case.
The purpose of estate planning is to ensure that whatever property or assets you have, (and there is no minimum amount of value required for those assets), goes to whoever you want them to go to, when you want them to, how you want them to. Another part of the estate planning goal is to set things up in such a way that the minimum amount possible goes to income taxes.
So what items exactly are considered part of a person’s estate?
If you own a home, then the equity in that home would become part of your estate when you die. After the home is sold and remaining mortgage paid off, any leftover funds would go to your heirs. However, if not set up properly, your heirs may end up using the bulk of those funds to pay estate taxes.
Other items that are considered part of a person’s estate include any bank and retirement accounts. Just like your home, if you do not have specific instructions on how these items should be distributed among your beneficiaries, much of your estate could end up going to Uncle Sam instead of your children.
At the very minimum, everyone – no matter what your age – should have a will drafted which gives specific instructions on how the items in your estate should be divided. If you do not have a will, then Illinois law considers that you have died “intestate.” Instead of your wishes being carried out the way you would have wanted them, your estate instead must go through the probate process and the court will decide who will inherit what.
The likelihood that the decisions of the court will best benefit your surviving family members is almost like playing roulette. For example, if you are married with young children and die without a will, you might assume that everything you and your spouse own would all go directly to him or her. However, under the probate laws, that is not the case. Instead, your estate is divided in half. One half goes to your spouse, while the other half is then split up among your children. Your spouse would not have access to the funds that have been designated for your children; instead, the children gain full access to those funds and when they children reach the age of legal adulthood.
Regardless of your age or financial situation, it is important to have estate plans in place in order to protect your family if something should happen to you. Contact an experienced DuPage County estate planning attorney to discuss all your legal options. Call the Law Offices of Salvatore C. Miglore & Associates at 630-933-8400 today for a free consultation.