The first step for people in Illinois who do not have an estate plan should be to identify their assets and gather all relevant financial documents. They should think about their goals as well. For example, they might want to consider how any minor children will be cared for, what will happen if they become incapacitated and what they want to happen to their assets.
Elements of an estate plan might include a will, powers of attorney and beneficiary designations. People may also want to consider having a trust as part of the estate plan. A trust may be revocable, which allows the creator to make changes, or irrevocable, which generally does not permit changes.
Individuals may want to consult an attorney to prepare the estate plan and to talk about whether a trust would be useful. Both types of trusts keep assets from having to go through probate before they pass to the beneficiary. An irrevocable trust offers additional protections and benefits. Trusts may be simple or complex with different tax obligations for the two types. Once the estate plan is created, it is important to review it regularly. Changes in laws, a person’s assets or a person’s family may all necessitate a revision.
Trusts are not just for people who are concerned about estate tax. They can allow creators to tie distributions to specific milestones, such as reaching a certain age. They can also be set up to allow distributions only at the trustee’s discretion. Trusts may be used to donate to charity or provide help to a family member who has special needs. Managing a trust can be complex, and some people might prefer to appoint a professional trustee for the position. A professional can also be a co-trustee along with a family member.
