It happens all the time. Clients call to book and appointment for a “simple Will update”. Maybe you have a Last Will and Testament (a “Will”) that you signed 15 years ago when your kids were little. Perhaps you created Revocable Living Trusts when the estate tax laws were much different than they are today. It could be that your Health Care and Property Powers of Attorney were signed before Illinois made substantial changes to these forms, and they may not include any additional powers or instructions that could help if you are incapacitated. You now realize you need to update these documents.
We think you are right. Outdated documents could result in missed opportunities both for protecting assets for your family, and for cost and tax savings, which is unfortunate. Besides that, they could also result in completely unintended results and family conflicts after your death or upon your disability, which is disastrous.
Clients come to us asking us “to make a few changes” to their old documents. They want to “keep it simple”. The last thing we want to do is over-lawyer the issues. But doing too little presents its own problems. Because tax and other laws have changed so drastically over the years, it is likely the client needs more than just a few changes to existing documents. And while doing “simple” fixes seems like a cost-saving idea, it may, in fact, lead to even more expense later on. Your family will wonder why you didn’t do more to provide guidance and options for them, and why you failed to take steps that would have saved thousands of dollars in costs or taxes, when you had the opportunity to do so.
For example, your Powers of Attorney may not include additional powers to allow your agent to manage your digital assets, or make certain gifts for tax or Medicaid planning purposes, or provide specific instructions to your agent as to your wishes for cremation or burial. Your current Living Trusts probably don’t include trust protector provisions or contingencies for beneficiaries who are receiving governmental benefits. These are just a few examples of provisions that you could add to your documents that would make them much stronger and more flexible given current and ever-changing circumstances.
If you were married and your Living Trusts were done before 2010, they likely require that a credit shelter trust (a/k/a Family Trust) be funded at your death. While this was sound tax-planning back then, when the federal estate tax exemption was much lower than it is at this time, it is not necessarily a good tax result for your family under current tax laws. Instead of leaving an outdated funding formula in your Living Trusts, you can restate your documents to allow your spouse or trustee to make smart decisions following your death, based on what the tax and other laws are at that time.
Our advice? Don’t wait, and don’t short-cut to save some time and a few dollars now at the expense of the results you want. Your family will be very grateful that you took the time to carefully plan for yourself and for them. We are talking about your legacy. Let’s make it a priority. Call our office at (847) 253-8800 to schedule a no-charge initial consultation with one of our experienced estate planning attorneys. We are here to guide you through this process.
Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law, Collaborative Divorce & Mediation.
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