Do not forget that estate planning is an important element of financial planning.  After all, you worked hard for your money and assets so you, not the probate court or the tax man, should be the one to decide how you want the money and assets distributed after your death.
Why do you need an estate plan?

  1. Reduce cost and time of probate or eliminate it entirely
  2. Minimize taxes
  3. Distribute money and assets to the people that you want to receive them
  4. Name a guardian for your children
  5. Avoid family battles

At a bare minimum, every one age 18 and over should have a will and powers of attorney for health care and finances.  Many people will also need to establish a trust.

If you do not already have an estate plan in place, now is the time to meet with an attorney who can answer your questions and help you decide what documents you need.  If you do have an estate plan, take time to review your documents to make sure that they are still relevant.

What is Estate Planning?


Estate Planning helps you to take steps now that will protect your family after your death.  An Estate Plan is a group of documents that allow an individual to plan for the disposition of his assets after his death and also allow the individual to designate another person to make decisions for him in the event that he is incapacitated and unable to make decisions.

Many documents can compose an estate plan.  This is not a comprehensive list, nor is it provided as legal or tax advice, but as illustration; the most common documents can be:

Will – a document that, when properly drafted and executed, directs the transfer of assets from the ownership of a deceased or decedent to the beneficiaries.  It also directs who has the authority to supervise this transfer, how debts are to be handled, and if a bond is required for the estate.  It may also determine who has guardianship over minor children.  The requirements for a will may change from state to state.

Trust – a document that determines who controls, and under what limitations, specific assets that are transferred to the trust.  There are many types of trust, including the following:

  • Testamentary Trust – assets are transferred into the trust upon death through the direction of the Will.
  • Living (inter vivos) Trust – assets are transferred to the trust during the grantor’s life.  The grantor often is, but does not have to be, the initial trustee.  If properly drafted and implemented can create an orderly handling of assets during final illness, disability or other problems or conditions.
  • Charitable Trust – manages assets that are held to support specific charities or types of charities.
  • Special Needs Trust – similar to Testamentary trusts, but specifically designed to help support a beneficiary who has special needs, such as a long term, non-reversible, medical or physical disability.
  • Land Trust – a form of ownership of real estate, used mainly in Illinois.
  • Insurance Funded Trust – a trust that is the beneficiary of one or more life insurance policies; the proceeds of the life insurance provides the resources for the trust.

Power of Attorney (POA) – delegates to a specific person or persons the authority to act on behalf of the person signing the POA.  The POA may be for a specific time or open ended until revoked, may cover multiple assets or activities or be limited to one specific asset.

  • A Limited Power of Attorney may be used to help close the sale of a home, for example and the power is limited to that specific property.
  • A general Power of Attorney may cover all assets, but may still limit the type of action that can be taken.  For example, someone may be given the authority to manage property, but not sell it.
  • Power of Attorney for Health Care – delegates to someone the ability to make decisions on health care.  This frequently will state the type or level of efforts that should be used to prolong the life during a final illness.  This is similar to a “Living Will” but usually is more comprehensive.  Each state has specific language that is suggested, but generally a form from one state is recognized in other states.

The above used the following terms:

Beneficiary – person, persons, or charity or other organization which receives the assets under a will or receives benefit of the assets in the trust.

Trustee – Person, bank or other institution that implements the trust under the terms set forth in the trust agreement.

Who needs Estate Planning?

Everyone over the age of 18 should have at a bare minimum, a Will and Powers of Attorney.

Why do you need a Will?

  • A Will allows YOU to determine how you want to distribute your assets.  If you die without a Will, the state will make the decisions for you.
  • A will enables you to determine who has the authority to implement your estate plan.

Why do you need a Power of Attorney?

No matter how healthy you are, life happens.  You can become incapacitated at any time.  Executing a Power of Attorney for Finances and a Power of Attorney for Healthcare before you are incapacitated allows you to select the person who will make decisions while you are incapacitated and also allows you to make clear what kind of end of life medical treatment you would want when ill and at the end of your life.

Why should I consider a Living Trust?

Like a Will, a Living Trust allows YOU to decide how you want your assets to be distributed after your death.  When you create a Living Trust, you transfer ownership of your assets to the Trust.  The assets are generally managed by the Trustee, who is generally the same person who created the trust.  A Living Trust does not go through the probate process and becomes irrevocable on your death.  Depending on your financial circumstances, a Revocable Living Trust may be an advisable supplement to your will.

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