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This is the most common question that I hear as Americans are
adjusting to the new tax laws enacted last December.
“The limits are so high that I will never have to pay estate
taxes, so why bother?” The new Federal Estate tax limit
(above which Federal estate taxes will be payable) is
$11,200,000.00 per person. Yes, most of us will not hit
that limit, but 19 of the 50 states,
Illinois included, impose an estate tax of their own ranging
from .25% to almost 20% of your estate. The tax tail
should always not wag the dog however, and there are additional
reasons to put pen to paper and have an estate plan to spell out
Distribution of Assets – how will you pass your assets
- Who should get Grandma’s yellow pie plate or
Grandpa’s WWII medal collection?
- How do your children handle money? Is a trust appropriate
for all or some of them? Who will be guardians to your minor
children? When should funds be distributed? What will the
trust pay for?
- Do you have Grandchildren? Are there Generation Skipping taxes
to plan for?
- Does anyone you plan to distribute assets to have special
needs? Could it happen in the future? They may need planning to
keep them eligible for benefits.
- Do you have any digital assets, social media accounts, online
access to anything, digital currencies?!?!?
- Do you own a business? How would you feel if your Son-in -Law
or Daughter-in-law inherited that business? Are some children
involved in the business while others are not?
- Do you have rights to appoint assets from another estate or
Trust from your parent(s) or other person who named you in their
estate plan? That needs to be accomplished through your will.
- Who will handle all of the decision that you make and carry
them out as you desire?
Gifting and Other considerations –
- Do you have any charitable organizations, individuals outside
of your family, or wayward children you wish to make a one-time
- What happens if the tax laws change? The current tax limits are
set to sunset in 2025 and go back to 2017 levels.
- What happens if you win the lottery? (It could happen!)
- Increasing the amount of Life Insurance you own could put you
over the Federal or State estate tax limits.
- Do you want to leave an ethical will for your family and loved
ones, explaining what is important to you and why?
Lastly, Life time Planning is addressed by an
- Your retirement benefits or other financial benefits from a
workplace, and who you name as beneficiaries of either of those
types of assets;
- Who will act for you with regard to your assets, if you cannot
act for yourself for any reason?
- Who will act on your behalf with regard to medical care?
- Who will make end of life decisions and can be trusted to carry
them out as you wish?
Working with a trusted Estate Planning attorney can help you
efficiently make these decisions and more with regard to your
estate plan. Even if you have an estate plan, your situation
may have changed since you put it together and it may need updating
to meet you changing need and the changing tax landscape.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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