Oak Lawn Estate Planning | Medicaid Smart Bill

From the ISBA

Legislation: "SMART" bill

The General Assembly is grappling with a $2.7 billion Medicaid funding gap in the as of yet unpublished "SMART" bill. One of the pieces in it may be a reversal of the Medicaid eligibility rules in the compromise last fall between the Department of Healthcare and Family Services' and the Joint Committee on Administrative Rules. An excellent and comprehensive summary of that compromise may be found in the January 2012 Illinois Bar Journal (Diana Law and William Siebers). Some of these changes may include the following: (1) A home held in a trust, even an individual’s personal revocable living trust, shall no longer be considered homestead property. (2) People over the age of 65 can no longer participate in a federally created OBRA Pooled Trust. (3) A healthy spouse still living at home will receive only the minimum resource allowance instead of the maximum allowance as previously approved by JCAR. Whatever action the General Assembly may take on this issue will occur in the next ten days, and we'll try to keep you informed to the extent we can.

Oak Lawn Estate Planning | Want to Avoid Estate Taxes? Move!

So you know you may have to pay estate taxes but are not sure how to minimize them. I would bet you did not consider that changing residency would be one of the best options you have. You may not know that there are two different types of Estate Taxes that are due upon your death. First there is the Federal Estate Tax. This tax is a national tax that applies to individuals in every state. On top of the Federal Estate Tax, each state has their own State Estate Tax. On top of these taxes, there is also exemptions for each state and for the Federal Tax. As you may be aware of, the current Federal Estate Tax Exemption is $5,000,000.00. This means that you can have an estate that is less than $5,000,000.00 and have no Federal Estate Tax liability. There is a different exempt amount for Illinois Estate Tax. The Illinois Exemption is $3,500,000.00. This means that if your estate falls in the 1.5 million dollar gap, you will only be liable for Illinois Estate Tax.

How does this translate into financial terms. Assume that a married couple have a 10 million dollar estate. They would owe $704,316.00 in Illinois Taxes because of the gap between the Federal and State Estate Tax. In order to avoid this Estate Tax Gap, it might be wise to declare your residential status in another state. In order to do that though, you will need to spend less than nine months in Illinois. If you spend more than none months in the state, there is a presumption that you are a resident.

I know that this may seem like an extreme solution, but it is a viable solution for some who do not want to give almost three-quarters of a million dollars to the Illinois Government. For more information on how to avoid Estate Taxes, call the Estate Planning Attorneys at:

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60453
708-529-7794

Oak Lawn Estate Planning | Not Planning May Now Cost You More

There is a new law in the Illinois Legislature that is a cause for great concern. Currently, It is entitled Senate Bill 2894. This bill, if passed, will raise the costs of opening a probate in the state of Illinois. Currently, there is an identical bill  in the house, House Bill 4985. This is just one more way the bankrupt Illinois government is taking money without getting a lot of "guff" about it. Dead people don't do a lot of complaining. Their heirs may complain, but most think of anything they receive from the estate as a windfall; this way they don't mind that they get a few hundred dollars less in their inheritance. The claim is that the money from these fees will go to the Guardianship and Advocacy Commission. This is a state agency though. Why is this agency not simply being funded by our regular taxes? The answer is that the agency is funded by our regular taxes. The government simply want to slate those taxes to their own pork projects and ave this agency solely funded by additional fees.

What does this do to those who have to pay the fee. People will simply not probate their relatives estates. This is not the incentive that you want to create. Large estates will not care about this fee, but the smaller estates will choose to avoid doing the right thing. This is a horrible policy for the legislature to implement and should be voted down with little thought.

How big is this Commission? All we can go on is the 2008 report, because nothing newer has been posted on their webpage. In 2008, $8,868,700 were slated to the commission. According to their report, $9,218,360 was spent by the commission. Why worry though, this was only a 4% overage. We know what Illinois legislature intends to do about it. This is not to say that the commission does not do good things for the community. Their expenses are simply not needed for many of the things they do.

Lets break down how they summarize their services. The Guardianship and Advocacy Commission states  that they they handled 5,377 inquiries through its intake unit. If we estimate 250 work days a year, and we figure out how many inquires this means daily, it averages to about 21.5 inquires a day. Let us pretend  that there are two workers on this task. This is only 11 questions a day per worker. Assume that each worker makes $60,000.00 per year. This $120,000.00 is almost nothing for one of the four major things this agency does. The commission lists four bullet points to summarize their work. These questions sum up one of the bullet points. Certainly, this bullet point did not take up all the money expended.

The Guardianship and Advocacy Commission served as guardian for 4,964 wards for the year. They claim to have visited wards 17,882 times throughout the year. Even if they charged $300.00 per visit, this only adds up to $5,364,600. This allows for one hour travel time each way and a one hour visit at $100.00 an hour. Keep in mind, many of their visits are done by volunteers, so these visit only cost the training of the volunteer.

Finally, the Guardianship and Advocacy Commission states that they had 7,225 court appointed clients. If we use up the remaining money that they are slotted, this leaves two and a half hours of legal time for each client they serve. The Guardianship and Advocacy Commission also claims that their attorneys help with social security applications as well. This is completely unnecessary  because traditional attorneys help applicants with these applications for no up front costs. They get paid a portion of the benefits if their win the application. Why have taxpayer dollars go to this process?

There is no doubt that this agency does some good work, but strapping on another cost to probate clients to feed another governmental machine is not the answer. The Illinois legislature needs to stop taxing people to keep their large agencies feed.

Oak Lawn Estate Planning | Wills Must Be Probated

 This is a news flash to most people, "A Will must be Probated!" Most people think that if they simply have a Will, they will not need their estate probated. This is a common misconception with the general public. Although many people do not have their will probated, without an official closing of their estate by the court, there estate remains in an open state. Additionally, without probate the assets of the Estate, even if distributed, are always available to creditors. A probate attorney will have to take a number of steps to get an estate ready for probate. This ranges from getting the names and addresses of all family members within a certain range from the decedent. Additionally, the probate attorney will have to gather the addresses of all creditors of the estate. He will then take that information along with some other forms to court, along with the Will, so that the judge can determine if an estate should be opened and the Will admitted. This probate of a Will process has some advantages, but it also is an expensive task.

Now that you know that Wills must be probated, what should you do next? You should contact an Estate Planning Attorney to advise you on the best plan for you. You may be better served with a trust to dispose of your assets. Generally, a trust is cheaper over all than the cost to have a will drafted and then probated. You can find out more in my article, "What Does a Will Cost?"  To speak to a knowledgeable attorney for free about your plan, call;

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60453
708-529-7794

Oak Lawn Estate Planning | Special Circumstances to Probate a Civil Union

With the passing of the Illinois Civil Union Act, partners may not take advantage of their new found status under the probate act. This advantage comes to play in a number of scenarios. The first of which is if there is children involved. Under the new law, partners under the Civil Union Act have the same rights as spouses under the law. This means that if two incomes were needed to maintain the family, and one partner meets a premature death, the other spouse will have the proper assets to care for their child. The reason for this is that spouses, and not partners, have the privileged of being designated in the primary prefrence category for receipt of assets. A partner would be ensured a primary preference category for up to 9 months and an award of no less than $20,000.00. Partners will also have preference category for being designated as the administrator of the estate. This is wildly different than the previous designation for same sex partners.

The key for couples who have taken advantage of the Civil Union Act is to consult an attorney about the status of their estate planning because there is only a limited number of states that recognize this law. A knowledgeable attorney should be consulted before any move is contemplated. If you would like to find out more about probate or estate planning under the civil union law, call;

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60453
708-529-7794
www.jwcolelaw.com

Oak Lawn Estate Planning | Did your old attorney really do a good job?

Problem: Your old attorney gave you your estate planning documents and sent you on your way. You have no plan for when you die, just some documents that state who your property goes to upon your death.

Needs: What you needed was a comprehensive plan that includes both a property distribution plan and the methods that that plan can be implemented.

Solution: You need to find an attorney that focuses on more than just a document "pump and dump".

It has been an unfortunate problem that attorneys, particularly older attorneys, have asked some basic questions of clients and then pumped out a will or trust for the client. They have the client come into the office and sing the documents and send them on their way. Often, the client is confused about what this document does and how anyone will be able to use it after their death. Additionally, the attorney doesn't care to help these individuals because she hopes that she will do the probate in the event of your death. What I always tell the Executors of an estate is, "The more disorganized the estate is, the more money I make." This may be why old attorneys simply dump the documents on the client and provide no instruction later. This pump and dump method was par for the course in the old days. Now, clients should expect more. The proper instruction can make the passing of a loved one a manageable process from property standpoint.

You may be asking, what things should my attorney have told me?

 This question is very specific to your situation. People have so many different types of assets and family situations, it would be wrong to try and give a cookie cutter answer. There are some pieces of information that he should have discussed with you which are almost universal to everyone. This type of information makes administrating your estate much easier. I always advocate creating a critical information sheet with your attorney that will be given to the executor that will make their life much easier. This critical information sheet will contain things that would take a good deal of manpower to find and, in some cases, may never be found. A sampling of things that should be included on this sheet would include: passwords to emails, passwords to Facebook, passwords to a blog, passwords to finacial institution accounts, location of keys to lock boxes, listing of all certificate of deposits, listing of all savings/checking accounts, names of brokerage firms, names and numbers of insurance companies, instructions for care of pets, lists of credit cards, etc.

Most Estate Planning lawyers don't even include these things with their documents. This type of estate planning is simply unacceptable. A good estate planning attorney should ensure that they are counselors and not simply a document manufacturer. There is no doubt that a good will or trust makes all the difference in the word in regards to the property going to the proper party and with the least governmental hassle. Why not choose an attorney who makes the hassle on loved ones as small as it possibly can be. After all, is that who you had the trust drafted for anyways.

For more information on getting your Will or Trust, call,

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60453
708-529-7794
Jonathan@JWColeLaw.com

Chicago Estate Planning Attorney | Powers of Attorney

Many clients have been very confused about the meaning and usefulness of the documents called Powers of Attorney. This post will explain what these documents are and how you should use them. To begin there are two types of estate planning documents. One type is documents that have an effect while you are alive and the other type has an effect when you are dead. Powers of attorney have an effect while you are alive. For the most part, their power terminates at your death.

Now that we know when they are effective, what do they do?

There are two types of Powers of Attorney; 1) Power of Attorney for Property, 2) Power of Attorney for Health Care. In general, you as the "principal" designates a friend or family member to act as your "agent". That agent will then be able to make decisions and take actions on your behalf when you are unable to. These documents help individuals who can not take the appropriate actions that will promote their best interests. I know that the preceding sentence seems either confusing, or not applicable to you. I will show you that this type of situation will probably happen at some point during the course of your life.

You may need a power of attorney if ...

• you are in an accident and can not make medical decisions on your own behalf. 
• you are in an accident and you can't update the CD at the bank that came due.
• you are on vacation and you forgot that you had a closing on one of your properties.
• you are on vacation and your cell phone contract came due and you want to keep your plan.
• you have to be in two places at once to sign documents.
• you have mobility issues that makes getting to a location difficult.

As you can see, this is just a small sampling of times when a Power of Attorney can be either crucial or extremely convenient. If you would like to find out more about Powers of Attorney, you can contact my law office in Oak Lawn, Illinois at:

Law Office of Jonathan W. Cole

5013 W. 95th St.

Oak Lawn, IL 60453

(708) 529-7794

www.jwcolelaw.com