Bellock & Coogan  | Oak Brook, IL
915 Harger Road, Suite 240 
Oak Brook, Illinois 60523 
Phone: (630) 572-0900 
Fax: (630) 572-0905
  • Home
  • Attorney Profiles
    • Charles J. Bellock
    • Kimberly S. Coogan
    • Derek M. Johnson
  • Estate Planning
  • Estate & Trust Administration
  • Business Services
  • Articles
  • Contact
  • Directions

Avoid Unintended Consequences to Your Estate Plan By Reviewing and Updating It

6/14/2018

2 Comments

 
By Derek M. Johnson

It’s a good idea to have your estate planning documents reviewed every 5 to 10 years or if there is a significant change to your family situation or finances, or the law. The importance of having an estate planning attorney review your current estate planning documents can the mean the difference between the smooth administration of your estate and trust when you pass away and unintended consequences such as property being left to someone you no longer intended to receive property, property being tied up in a needlessly complex estate plan or, even worse, the imposition of estate taxes. Case in point, a married couple had estate planning documents (including revocable trusts) prepared for them back in 1985 (for those of you that can’t remember back that far, that was the year the Bears went 15-1 and won the Super Bowl in 1986). Unfortunately, the husband passed away in 2016 and never had his documents changed during those 30+ years. When the family came to us to help administer his estate and trust, the husband’s estate owed $300,000 in Illinois estate taxes! To make matters worse, if the husband had his estate planning documents reviewed prior to his passing, his documents (in particular, his trust) could have been amended to avoid Illinois estate taxes entirely!
 
Fortunately, we were still able to help the family avoid all Illinois estates taxes through a process known as decanting. Briefly, decanting allows the trustee of a trust under limited circumstances to transfer trust assets to a new trust. In this case, the husband’s trust qualified for decanting and we drafted a new trust to which assets from the husband’s trust were transferred to avoid the Illinois estate taxes. I know. I’m just as surprised as you are, but the State of Illinois allows trusts to use the decanting process – if the trust qualifies – to avoid Illinois estate taxes.
 
Bear in mind, though, that decanting is allowed only under limited circumstances and should not be relied upon as a cure for outdated estate planning documents. Rather, the better and more cost-efficient option is to have your estate planning documents reviewed every 5 to 10 years or if your family situation, finances or the laws change; and, if necessary, amend your estate planning documents. No one has a crystal ball and can predict what will happen as life goes on. People go through significant changes throughout their lives and estate plans should likewise be amended to reflect those changes. An estate plan should not be viewed as something that is static and never needs to change. Rather, estate plans should be viewed as fluid and flexible – something that can and should be changed if your unique family and financial situation, or changes in the law, call for it.
2 Comments

    Archives

    February 2021
    January 2020
    January 2019
    October 2018
    June 2018
    December 2017
    July 2014
    February 2014
    February 2013
    January 2013
    September 2012
    August 2012

    Categories

    All
    Business Succession
    Buy Sell Agreement
    Buy-Sell Agreement
    Charitable Giving
    Estate Administration
    Estate Planning
    Estate Tax
    Gift Tax

    RSS Feed

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Bellock & Coogan, Ltd.
915 Harger Road, Suite 240 
Oak Brook, Illinois 60523 




Phone: (630) 572-0900 
Fax: (630) 572-0905
Email


Copyright © 2018 by Bellock & Coogan, Ltd.