Do You Need a Will If You Already Have Life Insurance?

Posted May 26, 2022 by Law Office of Andrew Szocka

Do You Need a Will If You Already Have Life Insurance?

If you already have life insurance, you may wonder why people keep saying that you need to make a will. Life insurance sounds like it will help your family out if you are not around. There are many reasons to make a will in addition to paying for life insurance.

Life Insurance Provides a One-Time Payout to One Person

Life insurance requires you to make premium payments to an insurance company over time. If you pass away while the policy is in effect, the insurer will pay a lump sum to your chosen beneficiary. You can choose one or maybe more beneficiaries, but they only receive one payment. Depending on the type of policy, your family may only receive enough money to replace your income or pay expenses for a year or two. After that, the insurance will no longer help them.

In contrast, you can use a will to make gifts to many people. You are not limited to one or a few beneficiaries. Further, you can even use a will to roll your assets over into a trust. The trust can make payments to your family over time, and the trust assets may even grow in value.

No Premium Payments or Term Required for a Will

To maintain life insurance, you have to make premium payments on a regular basis. These payments may not seem expensive at first. But if you fall on hard times, you could lose the insurance. You do not need to make regular payments to “afford” a will. Once you and your witnesses sign it, it will remain in effect until you die or change the will.

Further, many younger people purchase term life insurance, which stays in effect only for a specified term (such as 10 years). After the term ends, you are no longer covered. Older people often buy policies that last longer but end up costing a lot of money in premiums. Again, a will stays in effect for as long as you want with no extra cost.

Dispose of All Your Assets with a Will

Life insurance assures a payment from the insurance company to a beneficiary. It has no effect on distribution of your assets after you die. You may not think you have many assets to distribute. But if you have a house, own stock, have valuable jewelry, or own a car, you have assets. Further, you might want those assets to go to specific people after you are gone. A will can give you peace of mind that your wishes will be carried out.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

When Should You Update Your Estate Plan?

Posted May 25, 2022 by Law Office of Andrew Szocka

If you already have an estate plan, you may not realize that you need to update it regularly. But how often do you need to update the plan, and how will you know that it needs some changes? We recommend that you revisit your estate plan just before or just after any major life changes, or at least every few years.

Major Life Changes Often Require Estate Plan Updates

The most frequent reason you will need to update your estate plan is because of major life changes. Lawyers customize wills, trusts, and other estate planning documents to fit each client’s individual circumstances. When those circumstances change, the plan may no longer match the client’s wishes.

Major life changes that may trigger the need for an estate plan update could include:

Marriage
Divorce
Birth or adoption of a child
Death of a relative
Major financial problems
Receiving an inheritance
Moving
Buying a house or other property
Changing jobs

Everyone’s circumstances are different, and you may experience other changes that lead you to change your plan. For example, some people decide to edit their wills after major disagreements with relatives or losing touch with family.

Other Reasons to Update Your Estate Plan

In addition, you may need to update your plan (but not know it!) if the laws change in your state or nationwide. In particular, many changes to the federal tax laws went into effect at the beginning of 2018. The new estate tax provisions could affect your plan.

Another reason to change your plan could arise over time. As you increase retirement savings or begin thinking about your legacy to your relatives, you may want to set up more estate planning. You could start a family trust, decide to open a foundation, or want to sign a medical directive. Updating your estate plan every few years will keep your planning in line with your goals.

Want to update your estate plan today? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

What Happens When a Relative Dies Without a Will?

Posted May 24, 2022 by Law Office of Andrew Szocka

When a relative dies without a will, your family may not know what to do. Problems you may encounter include how to deal with funeral expenses, how to cover immediate bills, and what to do about the estate.

No Will? The Estate Needs a Representative

If you and your family cannot find your relative’s will, and there are bills to pay or assets to distribute, you may need help from the court. The probate court can appoint an estate representative to manage and distribute the deceased relative’s estate.

Note that you should not spend your deceased relative’s money until the court appoints the representative. While your family may want to use the money for a funeral or to pay bills, you should wait even if it means delaying the funeral. To make sure the deceased person’s assets stay in good repair and are distributed to the right people, you need to seek legal help as soon as possible after the death.

If There’s No Will, Who Gets the Assets?

Once the court appoints a representative, he or she will begin gathering assets and identifying heirs. The representative is also in charge of managing the deceased person’s money and property, including paying for the funeral and bills. The court provides some minimal supervision, such as requiring the representative to submit an estate inventory and accounting.

Since there is no will, the law of intestate succession will apply. This law explains who receives the estate assets and in which order. Any living spouses or children will inherit the bulk of the estate. If a spouse or children have died before the relative did, then more distant relatives such as parents or grandchildren could inherit. The intestate succession law in Illinois is very complicated, so the personal representative may need a lawyer’s help to interpret it.

Also, the estate may need to pay debts before the representative makes the final distribution to heirs. Many creditors have priority over estate funds, so they get paid first with anything left over going to heirs later. As a result, inheritances from people with many debts and few assets could be smaller than expected.

Finally, the lack of a will can create legal disputes among relatives about distribution of property. It is especially important to seek legal help as soon as you realize that there is no will. Having a lawyer for the estate can head off arguments before they begin.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

How to Get Started Making an Estate Plan

Posted May 24, 2022 by Law Office of Andrew Szocka

Getting Started

If you would like to get started making an estate plan, you may not know which steps to take first. You will be on good footing if you assess which assets you own, think about your goals, and find a capable lawyer to help.

Assess Which Assets You Own

Before you go see a lawyer to prepare your estate planning documents, it is a good idea to figure out exactly what you own. For example, you may have:

Real estate
Investments such as stocks, mutual funds, bonds, or ETFs
Retirement accounts like IRAs, 401(k)s, or pensions
Valuable items such as jewelry or cars
Cash

Make a list of your accounts and your assets to bring with you when you meet with lawyers. This will help the lawyer assess your situation and prepare appropriate estate planning documents. Make sure to mention if you own any property in another country or state, and mention if you jointly own any of your assets.

What Are Your Estate Planning Goals?

In addition to listing out your assets, think about your goals. Why do you want to make an estate plan? Are there particular relatives or friends to whom you want to leave inheritances? Are you concerned about future medical problems? Do you want to protect your children? Identifying some basic goals in making an estate plan can help your lawyer address them in the legal documents. Your lawyer may have suggestions about different ways to accomplish the goals.

Finding an Estate Planning Lawyer

Now that you have a better idea of your assets and your goals, it is time to find an estate planning lawyer. Having a lawyer gives you peace of mind that your plan meets legal formalities and can be enforced after you pass away. Moreover, a lawyer can advise you on the best ways to accomplish your goals considering the assets you own. Your lawyer should spend time with you discussing your goals and why you need particular estate planning documents. Look for an estate planning lawyer in your local area that you can trust.

Estate Planning for Medical and Financial Emergencies

Posted May 23, 2022 by Law Office of Andrew Szocka

If you have medical or financial emergencies in the future, you could greatly benefit from a few key estate planning tools. No one knows when emergencies will strike, but advance preparation can be key. Consider signing advance health care directives, choosing a guardian for children, setting up a trust or savings, and getting life insurance or disability insurance.

Health Care Directives

The last thing you want in a medical emergency is for you or a relative not to be getting the medical care you need. It’s surprisingly easy to be out of the loop with doctors and nurses – especially if you and relatives do not have advance health care directives. You might not be able to talk to doctors on your relative’s behalf. Or the doctors might give you treatment that you do not want. Directives confirm your wishes in writing and tell doctors what they should or should not do in an emergency.

Guardian for Children

In an emergency, your children may need care that you cannot provide. To protect them, consider signing a guardian designation for each child. A guardian designation explains who you want to care for your child if you cannot. While a court ultimately gets to choose the appointed guardian, your designation passes on your wishes and may influence who is appointed.

Trusts and Other Financial Fallbacks

In a financial emergency, you may need some money stashed away to help you stay afloat. Starting a revocable trust or setting up an emergency savings account are two options to consider. You can place money or property into a revocable trust at any time, and you can take it out if you really need it (as long as you are the trustee). Meanwhile, the money or property can earn interest or appreciate in value. An emergency savings account or other savings also could pay your expenses in an emergency. Interest-bearing accounts gain value over time while staying accessible should you need the money.

Life Insurance and Disability Insurance

Finally, signing up for life insurance and/or disability insurance could help you and your family in an emergency. Life insurance pays a lump sum to a chosen beneficiary if the policyholder dies suddenly. It’s a good choice for families, especially those with young children. Disability insurance pays out a lump sum or monthly payments if you cannot work anymore due to a disability. It could be crucial making ends meet.

To discuss various options for preparing for medical or financial emergencies, contact a local estate planning lawyer. You may have even more options besides those listed here, and taking the time to plan could make all the difference.

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