Lifetime Trust or Outright Distribution – How to Leave Your Assets to Your Beneficiaries

There are several ways you can leave your children (or other beneficiaries) your assets upon your death.

One option is an outright distribution. I call this the “here’s your inheritance” method. Upon your death, after payment of expenses and debts, your child receives their full share of the assets outright.

A second option is the staggered distribution method. This method gives your child a percentage of their inheritance at certain ages, dates, or events. A typical example is upon your child turning 30, he or she will receive one-third of their inheritance, at age 35 another third, and final distribution of the entire amount at age 40. In the meantime, your child would typically receive distributions of the principal and income of his or her share for needs such as a house down payment, educational expenses, or even a monthly stipend for living expenses. Another example would be an incentive based trust. With this trust, your child will receive 1/2 of his or her share if he or she graduates college and the remaining distribution if he or she maintains full-time employment for at least two years. Continue reading »

Electronic Estates – Keeping a Record of Your Assets

With the advent of electronic banking and e-statements, the face of our financial recordkeeping has changed over the past few years. Along with this change has come the limited knowledge of and access to your financial information. This is great for security now – but it can cause problems for your family when you are no longer around if you do not plan ahead.

Prior to online banking, when a person died the family could easily discover assets of the departed through statements delivered via “snail mail” – the U.S. mail. Bank statements would arrive in the mail on a monthly basis. Most brokerage statements would arrive at least quarterly. Worst-case scenario would be the annual statement from a life insurance policy, but there was usually a previous year’s statement available for reference.

Today, most people do their banking online and access retirement account/401(k) information online as well. They receive statements online with notifications via email, and dividends are electronically deposited. Continue reading »

Illinois Changes Its Power of Attorney Laws

The revised Illinois Power of Attorney Act, 755 ILCS 45/2-1 et seq. provides greater protection to principals. These revisions are designed to minimize abuses of the elderly, incapacitated and disabled persons by their agents serving under powers of attorney. House Bill 6477, the new state bill containing the changes, was passed by both houses and signed into law by Governor Quinn on July 26, 2010. The effective date for the changes is July 1, 2011. All powers of attorney which were validly executed prior to this date will continue to remain effective.

A few highlights of the changes to this Act are: Continue reading »