In this article, we will discuss the top 5 reasons that you should have an estate plan when you have minor children in Illinois.
- Naming a Guardian: The most important concern for most families with minor children is usually naming a legal guardian to be responsible for raising your children should both parents pass away or become mentally incompetent. Most people will name successor guardians to act if the initial choice for guardian is unable or unwilling to act. Guardians are named through a will. Click here to learn more about naming guardians for minor children.
- Ensuring that your family has immediate access to your assets when you pass: If you do not have an estate plan, it is likely that your executor will be required to open a probate case when you pass in order to obtain the power to distribute your assets. Probate cases tend to last at least a year, and often much longer. While the case is pending, your assets will be tied up by the probate process, which means that your family will not have access to them at a time when they are likely to need them. A good estate plan will ensure that your assets are distributed to your loved ones immediately upon your passing, without the need for a probate case. Learn more about when probate is required in Illinois.
- Ensuring that your assets pass in full to your children rather than being consumed by court costs, attorney fees, and estate taxes: If you leave minor children behind, you will want them to receive every advantage in getting to adulthood through a difficult time. A good estate plan will ensure that as much of your estate as possible passes to your family. A good estate plan will ensure that your estate avoids probate. If your estate goes through probate, you will be required to hire an attorney to manage a year-long or multi-year court case. Most courts will award the attorney handling the probate case 5% to 10% of the value of the estate as an attorney fee. There are also many additional costs associated with probate, such as publication costs, court costs, accounting fees, and executor bonds. A good estate plan will also ensure that the minimum amount of your estate is consumed by estate tax. Learn more about estate tax.
- Naming a trustee or executor: An important part of making sure your loved ones receive the maximum possible amount of your assets as quickly as possible is naming the right trustee or executor to administer your estate. Your trustee or executor is the person responsible for ensuring that the wishes that you set forth in your will or trust are effectuated. If you have minor children, this person will likely have discretion over investment and distribution of your assets for several years. Many people like to separate the purse strings from the legal guardian of the minor children to create a system of checks and balances. Either way, it is important to select as trustee or executor someone intelligent, whom you trust, and who you know will put the best interests of your children first. Learn more about executors and trustees.
- Planning for your children’s future: A good estate plan will usually not simply provide that your assets be given to the guardian that you name in your will or that they be distributed to your children as they reach the age of 18. Rather, a good estate plan will allow you to give your children access to the assets gradually as they reach milestone ages or milestone life events. For example, many of our clients provide that their children can receive a third of their inheritance at 21, a second third at 25, and the rest at age 30. During this entire period, the trustee of their trust will have the discretion to distribute more if he or she feels it is in the best interests of the child. However, this prevents an 18 year old from unwisely spending his or her inheritance before he or she is mature enough to invest it wisely. Many clients provide that if the child graduates college with a certain grade point average, the distribution of their inheritance will be accelerated. You can also control how the assets are invested during this period. A good estate plan will allow you to in effect financially watch over your children long after your passing. Learn more about Revocable Living Trusts.