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Part of estate planning involves providing for the event of your illness or disability. In fact for most people the odds of becoming disabled and unable to work for at least a short period are higher than the odds of dying. Disability insurance provides a monthly income if that happens. And many more people incur high medical expenses at one time or another without becoming disabled. Both types of insurance are a desirable part of any estate plan.

Although things of this nature are never pleasant to think about and seemingly plan on, but there possibility is a reality and they should be taken care of when properly planning an estate in Chicago, IL. Contact Chicago Estate Planning and Wills lawyer to plan your estate.

Today: Income splitting in Illinois

Sometimes it is possible to shift income within a family from someone in a higher tax bracket to someone in a lower bracket. This is difficult with children under 14 since their unearned income (except for the first $1600) is taxed at their parent’s tax rates. However, not all children are under 14. Basically income is split by giving property to children. Thereafter the income from it belongs to the children. Interests in family businesses or farms are ideal. Gifts of cash work too if available. Employing your children also is a good way to shift income to them. However, they must actually work and the pay cannot exceed a reasonable amount for what they do.

If this sounds like something that could work for you contact Chicago Estate Planning Attorney Don Thompson for further information.

Living Wills

These do not dispose of property. Instead they tell your doctor or hospital not to keep you alive artificially. They must be signed with witnesses and all the formality of wills. To be effective you must give them to your doctor and to whoever will have charge of your care. For instance, if you are going into a hospital give it a copy to be kept with your medical records.

Living Trusts

This is a trust created while someone is alive. It is usually a revocable trust – the person who creates it can revoke it or alter it. For this reason all income is taxed to the person who creates it and it is in that person’s taxable estate. The person creating it is usually the trustee and gets the income from the trust. When he or she dies the trust assets usually continue in trust with another named trustee for the benefit of the surviving spouse and children. Eventually the assets are paid out of the trust to the children at specified ages. These trusts are used —

1. To avoid probate.

2. To avoid creditors who cannot file claims against the trust assets. They can file only against the probate estate. This is good for people in risky occupations. However, the protection against creditors exists only after death.

3. To disinherit a spouse and get around his or her right to a statutory share of the probate estate regardless of what a will says.

4. For privacy. The trust assets do not go through probate court where an estimate of the value of the assets is part of the record and where an inventory of the probate assets may be filed and is a public record.

5. To avoid probate of out of state real estate. If you own real estate in another state the probate of your estate in that state is often required in addition to the state where you live. By holding title to that real estate in trust you avoid the probate. If you are trustee the title passes to a successor trustee on your death by terms of the trust and not by virtue of your will or the probate act of the state in question.

To learn more or to plan your Chicago, Illinois will and or trust contact Chicago Estate Planning Lawyer Don Thompson.

This is a written agreement entered before a marriage that usually deals with what happens to the parties’ assets and income in the event of divorce or death. For instance, it can specify what a surviving spouse gets on the death of the other spouse. It can increase or decrease inheritance rights. To be enforceable each party should have separate legal counsel, each party should make full disclosure of all income, assets and other material facts, and no duress should be involved. This is also called a antenuptial agreement.

To learn more contact Chicago Estate Planning Attorney Don Thompson.