Illinois Estate Planning and Elder Law Blog

Estate planning serves to ensure an individual’s assets are distributed as they wish after they pass away. Proper estate planning is even more vital for a single parent to ensure the wellbeing of their children as they are solely responsible for providing for and protecting their children.

One of the most vital aspects of estate planning for a single parent is to designate a guardian for their minor children. If something were to happen to the parent, this ensures that a trusted person will be appointed to raise their children. It’s important to choose a guardian who shares similar values, has a similar parenting style, understands the needs of the children, and who would be willing to take on this responsibility. A parent should have an open discussion with the potential guardian and select an alternate guardian as well.

Establishing a trust or will is foundational to estate planning and can be created to protect and manage assets to provide for their children. A trust can ensure assets are held and distributed according to a parent’s wishes after their passing. A trust that exists until one’s children reach a certain age or milestone can be set up to provide ongoing support for their needs as they grow up, including education, healthcare, and other necessities for their wellbeing. This can also provide protection against potential mismanagement of assets or irresponsible spending.

Much like the process of building a house, the steps to building an estate plan should be well-defined and carefully considered.

Here are some things to keep in mind when creating your estate plan:

· Get the right “builder.” Just like for a house, you will most likely need to hire an estate planning professional to make sure that what is built is done correctly according to your goals and the vision you have in mind. You will make your wishes known, of course, but you will rely on the builder’s expertise.

A number of couples, including some who have been together for many years, choose not to legally marry for a variety of personal and financial reasons. Sometimes older couples decide against marriage because they don’t want to affect their children’s inheritance. There are others who don’t want to deal with the legalities of marriage. Some people would lose social security benefits or pension if they decide to remarry.

It is extremely important for couples who are not married to make their wishes clear in their estate planning documents when it comes to the rights and responsibilities they want their significant other to have. A non-married partner doesn’t have the same legal rights that a married spouse has. A significant other does not have a statutory priority to serve as a personal representative or executor for the estate of their partner, statutory right to inherit their partner’s property, priority to make disposition of their partner’s last remains, or priority to act as their partner’s guardian or conservator should they become incapacitated or disabled.  There is also no requirement to give notice of withholding of life support for a non-married significant other.  However, anyone may execute estate planning documents so that their significant other will have these legal rights.

An unmarried individual will want to make sure to execute a will, a health care power of attorney, a general durable power of attorney, and a living will to protect their significant other. A Last Will and Testament designates an executor to be in charge of one’s estate, and it also designates who will inherit which assets from this estate. No assets will pass to your significant other (unless they are owned jointly or you have named them as a beneficiary) without a will.

In the wake of the pandemic, the topic of estate planning has suddenly become a lot less taboo, according to Lee Baker, a certified financial planner based in Atlanta. “We get more calls around estate planning,” he says.

Baker is the founder, owner, and president of Apex Financial Services and is a member of CNBC’s Advisor Council.

“The last 36 months shifted the mindset,” explains Baker. “A lot of people have taken this opportunity to reassess.”

If it’s been years since you drafted or last updated your will, it likely references many of your existing assets, such as retirement plan accounts and life insurance policies. You also have paperwork on file with the applicable financial institutions. It’s possible that you have modified one of these documents after life events such as new births, deaths, or relationship changes without updating the other document.

It’s important to keep your will as well as your retirement plan or life insurance documents up to date. If your will names different beneficiaries from your documents on file, which one controls who these assets go to?

The beneficiary designations in your retirement plan and life insurance documents supersede what is written in your will. However, having different beneficiaries listed could cause conflict, confusion, and turmoil for your loved ones. It’s possible that one party may even try to legally challenge it.

In the last post, I wrote about 5 different major life events and changes for which you should revisit and potentially revise your estate plan. Here are 3 more life changes that are cause to take another look at your estate plan and update your documents if necessary:

1. You may need to change important individuals within your estate plan. If you haven’t updated your estate plan in many years and previously chose a Personal Representative, Agent for your Power of Attorney, or Trustee, take time to revisit this selection. Evaluate whether the individuals you named are still the best choice for your current family and estate situation.
2. You start or purchase a new business. Although a lot of business owners do an excellent job of building successful businesses, there are less business owners who take the time to create a good succession plan or properly incorporate their succession plan into their estate plan.