The beginning of a new year is a time for all of us to resolve to improve ourselves: exercise more, clean out the closets, get back in touch with old friends. This season of self-improvement is a good time to clean up financial and legal affairs, as well. New parents, in particular, may have found themselves procrastinating during the past year when it came to planning for their children’s futures; it isn’t easy to think about a future beyond our own lifetimes when we are just getting accustomed to the joys and challenges of parenthood.
Meeting with an estate planning attorney can help in overcoming this emotional hurdle. There are many issues to think about and an experienced attorney can help demystify them.
One of the first issues to address is the types of estate planning tools that will best serve your needs. For instance is a will enough or should a trust be included as part of your plan?
A will is often considered to be the easier (and less expensive) of the two types of documents to execute. It contains relatively simple language and formatting and can capture the essence of your intentions. This type of document should contain a testamentary trust, which goes into effect in the event of the loss of both parents and is created for the benefit of a child.
While a will may suffice and can be a powerful tool, especially for first-time estate planning, a revocable trust is often a more complete answer to a family’s needs. It can assist by streamlining all of a family’s assets into a single trust account, the terms of which can be changed at any time during a client’s lifetime. Among a trust’s other attributes, it enables provisions for the timing of distributions. For example, if a parent dies and would like a child to receive assets only upon attaining a certain age (say, 25) or meeting certain conditions (such as completing an education), a trust is a legally binding way to ensure that these expectations are fulfilled. A trustee is appointed to distribute the assets according to the parents’ instructions. This enables a family to bypass the probate process, is a long, potentially burdensome process that can significantly delay the distribution of assets to their intended recipients. Whichever instrument you choose to meet your estate planning goals, checking this off your list of 2015 resolutions will help you focus on enjoying those sleepless nights of teething and tummy aches.
Pierson & Strachan
67 E Scranton Ave, Lake Bluff, IL 60044
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The information on this website may address some questions, but is not intended to be a comprehensive analysis of the topic or legal advice.
Independent tax and legal advice is recommended.
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