What Is an Estate and Why Do I Need to Plan For It?

Estate planning can seem like an intimidating concept, and for that reason, many individuals simply avoid ever getting an estate plan. While the concept may come across as intimidating, estate planning can actually be quite straightforward once you understand the main objectives.

What Is an Estate and Estate Plan?

“Estate” is a general legal term used to refer to all of your money, property, and other assets. For a simple analogy, an estate is like a basket of apples. Your estate is the basket, and the apples are your assets. Relevant assets include real estate, bank accounts, business interests, personal property, and any other financial assets you own.

An “Estate Plan” is the set of legal documents that spells out the way in which you want your estate to be distributed. So, for example, your estate plan would memorialize who should get your car, or house, or any other asset you own. An estate plan can also lay out the way that your assets should be managed for children or other young beneficiaries. Further, a comprehensive plan would name agents to take care of you in the event that you are incapacitated, and name a guardian to take care of your minor children if you cannot do so.

Why Do I Need an Estate Plan?

For most Illinois residents, having an Estate Plan can actually save you time and money in a myriad of different ways.

First, in the state of Illinois, if you die without an Estate Plan and you have over $100,000 of assets in your estate, you will likely be subject to Probate Court. Probate Court is the legal process during which the court oversees the division of your estate. Probate Court lasts a minimum of six months but often lasts fourteen months or more. Probate Court is also an expensive public process, during which your assets and debts become public record.

Similarly, if you do not have an Estate Plan and you become incapacitated due to illness, injury, or other disability, you will be unable to make your own financial decisions and medical decisions. Without the proper documents in place, your loved ones would need to go to Guardianship Court in order to get the legal ability to care for you.

Further, if you become incapacitated or pass away without an estate plan and you have minor children, your loved ones will need to go to Guardianship Court in order to get the legal right to care for your children.

By contrast, an estate plan allows you to specify how you want your family to receive your assets. With an estate plan, you can give a specific gift to an individual, avoid giving a gift to someone who would not be able to manage it (i.e., gifts to a minor, gifts to an individual with disabilities, or individuals with creditors, etc.), or even make gifts contingent on an event occurring (i.e., college, wedding, starting a business, buying a home, etc.). For those with a more substantial net worth, estate planning can also result in mitigated estate tax liability.

Simply put, a comprehensive estate plan puts in place safeguards to care for you, your family, and your family’s best interests in the event that you cannot do so.

What Would Happen to My Assets if I Don’t Have an Estate Plan?

If you die without an estate plan in place, your assets will pass to your “heirs” provided by Illinois law, regardless of your wishes. In many cases, the state’s distribution scheme (known as “Intestacy”) will not be appropriate for you and your family.

For example, if you are married with children and die without an estate plan, Illinois law provides that your assets will be divided into two equal shares – one-half (1/2) will go to your surviving spouse, and one-half (1/2) will be split among your children. If your children are minors, or if your spouse is planning to rely on those assets for his/her support, intestacy clearly provides for the wrong result.

While estate planning can be intimidating, the Lavelle Law team makes it a priority to make the process approachable and effortless. We do the hard work for you so that you can feel confident. If you would like to schedule a free consultation to hear more about how an estate plan can benefit you and your family, please call attorney Heather A. McCollum at (847) 705-7555 or email her at hmccollum@lavellelaw.com.