Avoid these five estate planning problems to maximize the benefit of the plan for yourself and your family.

1. Split planning.
Sometimes people try to “hedge” their planning among multiple service providers. An estate plan cannot take into account assets which are not disclosed, however, and may result in foregoing certain strategies and benefits that could have been planned for. Failing to pursue a comprehensive plan that takes all assets into account can result in some undesirable tax, asset protection, or other consequences.

2. Incomplete planning.
Omitting critical documents can potentially leave you or a family member out in the cold in an hour of need. That could mean having to put up with needless delays and costs, or worse, it can potentially lead to lapses in care and protracted disagreements within the family. Comprehensive planning is an investment that can pay dividends in the stability and harmony of a family.

3. Not executing the plan correctly.
If the plan documents are later found not to have been executed properly. That means they will be given no effect, and you will be treated as having never done them at all.

4. Not funding a trust.
When created, a trust is like an empty box. It only holds that which is actually put inside. If assets are not transferred into the trust, they will not enjoy the protections and administration of the trust, and any trust planning related to them will be for naught. Therefore, it is important to properly transfer real estate and retitle accounts to reflect the change.

5. Not following up.
As time goes by, things change. Real estate gets bought or sold, accounts move up or down in value, families increase or decrease in size, and even legal and technological conditions change. Estate planning is not meant to be done once and forgotten; rather, it should be updated for any life changes and revisited to stay on track with long-term and lifetime goals.

People going through divorce may see the divorce decree as the end point of a long process. But divorce also necessitates updates to the estate and retirement plans as well.

In Illinois, a divorce decree will cause a will or a revocable trust to be interpreted as if the former spouse had predeceased the testator. Except to the extent that a divorce decree orders a particular distribution of property, however, it remains up to the individual to revise any other allocations.

This includes beneficiary designations on life insurance, pensions, retirement accounts such as IRA and 401(k) accounts, and annuities. It also includes transfer on death designations, such as on bank or brokerage accounts, or even real estate.

During marriage, the spouse often is designated as a primary beneficiary of such assets. To change the beneficiary arrangement on an account or insurance policy, the account holder needs to notify the bank, brokerage, or insurance company in writing or file a form with them.

If a former spouse is named as beneficiary and no updates are made, the former spouse will likely receive the proceeds when the asset is distributed. Therefore, to truly ensure a complete and total separation after a divorce, it is worth reviewing an estate plan and beneficiary designations on all assets.

What is a trust? A trust is an agreement between the owner of property and the trustee. The owner transfers certain property into the trust, and the trustee administers the property according to the terms of the trust on behalf of the beneficiary.

Unlike a will, a trust takes effect as soon as it is executed, and the trust will continue on after the death of the person who set it up. However, in the beginning, a trust is like an empty box. Property must be transferred into the trust in order for the trust provisions to apply.

Trusts can be useful to address a wide variety of situations. Some of the most common include that care of minor children, or elderly or disabled persons requiring care, and when one or both spouses has children from a prior marriage. They also can be useful for tax planning and charitable purposes when assets are extensive.

Once the trust is funded, the property held by the trust will be administered by the trustee according to the provisions of the trust agreement, rather than going through the probate court. Having the trustee administer the assets rather than the court can potentially save time and costs, compared to a will. If you have questions like, “What is a trust?” you’ve come to the right place in talking to Windy City Legal. Let our estate planning attorneys guide you through every facet of trusts, wills and other relevant instruments.

Estate planning clients sometimes will say that they don’t want to provide for a close family member. Occasionally it is because the family member was very successful. More frequently, it indicates a problem, such as an addiction issue or a chemical or alcohol dependence.

While discussing goals for his plan, “Joe” said he wanted to disinherit a brother. It turned out the brother was in the grip of an addiction, and could not keep a steady home or job.

Joe wanted to provide for the care of his brother, but felt that his brother would not be able to handle money, and would waste anything he received. Joe did not want to see money he had worked hard for go to fuel his brother’s addiction.

In Joe’s case, estate planning presents an opportunity to help an addicted relative by setting aside funds in a support trust. Joe discovered he could help his brother, without his brother having to touch the money.

Such a trust has specific provisions governing how and when funds can be used, and appoints a trustee to oversee them and pay the doctors, service providers, and caretakers directly.

A support trust can be used for counseling, treatment, rehabilitation or care of the beneficiary. However, during periods of current or recent substance use or dependence, the funds can also be withheld to prevent the beneficiary from dissipating them, or can be restricted to specific expenses.

For people like Joe, dealing with the burden of an addicted family member is tough. Being able to help, and being confident that the resources will not feed the addiction, can help address that pain.

One of the many benefits of estate planning is the stability and peace of mind the documents can convey. Too often, people place the documents in their safety deposit box.

Although it sounds counter-intuitive, the safety deposit box usually is a bad choice for these papers.

Safety deposit boxes are secure precisely because they can only be accessed by the account holder. That limitation can frustrate some of the benefits of planning, particularly when an agent or beneficiary is not on the account.

Estate planning documents need to be stored in a place that is secure but accessible to the designated family members. That way, when needed, they can be used when and how they were intended.

Your family should know what to do and how to access the relevant documents when needed. Otherwise, there is a potential for needless delays and costs.

If they do not, or you are not sure how to have the conversation, consider scheduling a consultation with an estate planning attorney.

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Windy City Legal is a Chicago law firm that assists clients with estate planning, real estate, and probate matters.

The proliferation of online forms, templates, and services has extended to estate planning.  But their users miss out on some important things.

1.  One size does not fit all

Internet-based services leave out many of the best reasons for estate planning:
•    assessing long-term and lifetime goals;
•    implementing strategies to reach them;
•    addressing any deficiencies;
•    creating mechanisms to preserve and protect assets;
•    addressing difficult issues, rather than leaving them to others to address during a time of stress; and
•    ensuring future security by putting appropriate mechanisms in place to take care of the family.

Unfortunately, internet-based services are designed to address routine situations, rather than these kinds of individual needs.

2.  Small oversights lead to big problems

It can be costly to omit provisions, and devastating when the documents are not properly executed.  Problems discovered later may cause delays, court expenses, and unnecessary stress.  Professional planning guides you through the process to avoid these effects.

3.  Don’t forget about the Rule Against Perpetuities

Not sure what that last reason means?  It’s an example from among hundreds of considerations that we take into account when crafting an estate plan specifically for you.  Online forms can lull the user away from carefully considering different issues, possibilities, and approaches.

Estate planning offers a chance to take account of current circumstances and plan for future conditions.  But as things change over time, it can be appropriate to review those plans and implement any necessary changes.  These seven events suggest it is time for a review.

1. Marriage
Marriage creates a new connection between the spouses, and by extension, their families.  The new couple may not have had a chance to discuss and plan for the long-term financial future, or to plan for contingencies.  Also, many couples choose to act as the first agent to each other for purposes of financial or healthcare issues.  The best way to avoid potential problems with doing so is to have proper appointments in place.

2. Kids
Estate plans should be reviewed upon the birth or adoption of children, so that proper plans can be put into place to ensure that the children will be cared for in the event of an emergency.  Also, estate plans can create structures to ensure that assets passed to children will be preserved, used or distributed in a responsible way.

3. Death or Divorce
A divorce usually triggers the need for planning, to ensure that new agents and beneficiaries are named to replace the former spouse and his or her family members.  It should not be presumed that a dissolution of marriage will take care of this automatically.  Similarly, a death of a beneficiary or an agent necessitates a consideration of who should take the place of the decedent.

4. New or changing assets
Acquiring or exchanging assets can trigger a need to update an estate plan.  At a minimum, specific provisions relating to any prior assets may not apply, and one may not want them to follow any catch-all provisions.  Examples of this can include buying or selling real estate, a business, stock, or collectibles – or can come from receiving an inheritance, bonus, or other inflow of money.

5. Moving
Moving can be an important reason to revisit plans, particularly when the move is a significant distance.  Not only does it imply potentially significant changes in assets, but a move also can necessitate the appointment of new agents who are located near to the principal.  Also, if crossing state lines, it is possible that different requirements will apply, and that documents executed previously may not be effective.

6. New job
Changing jobs is an important trigger because of the potential for a change in benefits.  For example, a prior job may have included insurance, retirement savings, or other perks.  It is important to address changes to beneficiaries and coverages, and ensure that any deficiencies are addressed.

7. Changes with agents, guardians and fiduciaries
People change over time.  For some, this means developing a closer bond.  Others can move away, become less able to serve, or less close than they once were.  If someone appointed previously is now unable to be effective as an agent, a guardian, an executor or a trustee, then someone new should be appointed.

Each of these situations can trigger a need to review an estate plan immediately, but sometimes smaller changes can build up over time.  Therefore, it is a good idea to review the plan every so often to make sure it is still optimal.