In this video, our Champaign estate tax attorneys takes the time to explain when to pay estate taxes on: inheritance taxes, state and federal estate taxes, and inherited retirement accounts. An inheritance tax is an amount of money due from a beneficiary who receives money or property from the estate of a deceased person. Inheritance taxes are due prior to receiving the inheritance check, so the amount received will already be reduced by the taxes owed. Federal tax exemption for a decedent’s estate depends on the exemption amount for the year of death. When it comes to state tax exemption, only a few states collect them, including Illinois. Similar to federal tax exemption, state tax exemption also depends on the exemption amount for the year of death. If an individual inherits a traditional IRA or 401k, he or she will have to include all distributions taken out in his or her ordinary federal income, and possibly state income, of that year. Inherited retirement assets are not taxable until they are distributed.

In this episode, our Champaign estate planning attorneys go over how to add cryptocurrency to your estate plan. One big difference between cryptocurrency and fiat money held in a bank account is that cryptocurrency doesn’t have a beneficiary designation attached to it like nearly all other types of financial accounts. What this means is that if you die without assigning a beneficiary in your estate planning, your cryptocurrency is at risk of dying as well. This is especially true if you failed to write down or give instructions to anyone else on how to access the cryptocurrency. There is no one to call at Bitcoin or Ripple headquarters to reset login credentials. You will need to create a memorandum that contains the information to access the cryptocurrencies. This memorandum can be easily updated without all the hassle of updating a will or trust and it can be included with your other estate planning documents.

In this video, our Champaign estate planning attorneys explain how there are many different goals that can be accomplished with an estate plan depending on your situation.  The overriding theme is that a good estate plan will ensure that your loved ones are in the best position possible from both a financial and personal perspective if you pass away or become mentally incompetent. Most people understand the importance of estate planning benefits such as naming a guardian for minor children and making sure that your assets are distributed according to your wishes.  Many people do not understand the importance of avoiding probate when you pass away and avoiding a guardianship case if you become mentally incompetent.