Estate Planning Services

Having a plan for the distribution of property and assets after death isn’t something that most people want to consider, but it’s something that should be done. Solidifying a plan can leave you with peace of mind, knowing that your wishes will be honored. The best way to achieve this type of security is through estate planning. An estate plan determines how your assets will be managed or distributed after death or if you become incapacitated. The team at Pasquesi Sheppard is here to guide you through these decisions and help you establish an estate plan.

What Is Estate Planning?

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Essentially, all of the property and assets you own at the time of your death make up your estate. Estate planning is a set of actions you can take now to distribute, manage, or preserve your property after death. It also takes into account how to handle any financial obligations if you become incapacitated. Several important documents are required for an estate plan, so it’s essential to consult an estate expert, such as the team at Pasquesi Sheppard, to help with planning and other necessary accounting services.

There’s a misconception that you don’t need estate planning documents if you don’t have an estate. This is wrong because an estate plan can include more than just a house. It can consist of physical items such as cars and artwork and financial aspects like stocks, life insurance, pensions, and even debt. One of the reasons to consider estate planning is to protect your family and money after your death. This includes providing for your surviving spouse or family members, preserving your family’s wealth, providing money for your children or grandchildren’s education, or leaving money to charity.

Basic Step of Estate Planning: Draft a Will

One of the key components of an estate plan is writing a will, a legal document that provides instructions on how property and custody of children (minors) should be handled in the event of a person’s death. The individual’s wishes are expressed in the will, and a trustee or executor is named to ensure the person’s stated intentions are fulfilled. A will can also indicate if a trust should be established after death as a testamentary trust.

The legal process during which the authenticity of a will is determined is called probate and is one of the first steps taken when an estate is administered after a person’s death. For assets to be distributed to beneficiaries, the custodian of the will must act within 30 days of the individual’s death to take the will to probate court or the executor of the will.

During the court-supervised procedure, the will’s authenticity must be proved to be valid and must find the will to be the last testament of the deceased person. The executor named in the will is identified in this process and appointed by the court to have the legal power to act on behalf of the deceased’s final wishes.

Choosing an Executor

Appointing the right executor for your estate is a crucial decision. The executor is responsible for overseeing and managing all of the deceased’s assets and must be approved by the court to act on behalf of the individual’s last testament. The executor is responsible for several things, including estimating the estate’s value through the date of death value or the alternative valuation date provided in the Internal Revenue Code (IRC).

The executor must pay any owed taxes or debt from the estate. Creditors have a limited amount of time to make claims against the estate, beginning from the date they are notified of the person’s death. The executor can reject claims and take creditors to court, where a probate judge will oversee the claim and have the final say as to whether it is valid or not.

During the probate process, the list of assets will be used, including bank accounts, real estate property, retirement accounts, bonds and stocks, jewelry or artwork, or any other items of great value. Most of the assets subject to probate administration will be supervised by the probate court located in the area where the person lived. The exception to this is real estate, which is subject to probate in the county where it’s located.

Before the executor can distribute the estate to the beneficiaries, they must first file the final income tax returns on behalf of the testator, take a final inventory of the estate, and calculate the value of the assets. Only after the debts are paid and taxes are settled can the executor distribute the remaining estate to the beneficiaries.

Other Estate Tasks in Estate Planning

The other significant and essential estate planning tasks to consider are: 

  • Setting up trust accounts in the names of beneficiaries to limit estate taxes.
  • Determining a legal guardian for any living dependents.
  • Updating or establishing beneficiaries on plans such as 401(k)s, IRAs, life insurance, etc. 
  • Preparing funeral arrangements.
  • Creating an annual donation to qualified charities or nonprofit organizations to reduce estate taxes.
  • Establishing a power of attorney (POA) to oversee other assets and investments.

When Is an Estate Plan Effective? 

An estate plan is composed of legal documents that are effective both during your lifetime and after death. If you become incapacitated, an estate plan can dictate who has the power and ability to make health care or financial decisions on your behalf. After your death, it ensures that your final wishes are carried out. If you don’t have an estate plan, decisions about your property and assets will land with the state and potentially cause confusion or frustrations for your surviving family members.

Estate Planning Services in Lake Forest, IL

Still have questions about estate planning, or ready to begin drafting your own plan? Contact the team at Pasquesi Sheppard to learn more about our estate planning services and other accounting services to guide you through these difficult and important decisions.