As you have been making plans for the future at the start of a new year, we at Mockaitis Law recently cautioned you against a number of common estate planning errors made in Illinois.
This week, we are instead looking at things FindLaw suggests you do to avoid making estate planning mistakes in 2019. These hints do not constitute legal advice, but you may find them helpful to get the most out of your estate planning.
Reduce estate taxes by giving gifts
You and your spouse can leave behind a positive legacy while protecting your heirs from estate taxes by making gifts as part of your estate plan to businesses, individuals or groups. You can exclude gifts amounting to up to $14,000 a year per spouse from estate tax according to the Internal Revenue Code, resulting in a total of $28,000 per year in estate tax savings.
Transfer life insurance policies to a trust
The purpose of life insurance is to ease the financial burden on your surviving loved ones after your death, yet such policies are also subject to hefty estate tax. However, you can place the policy into a trust to preserve the proceeds for your beneficiaries rather than the IRS.
Plan for disability
A long-term disability can incapacitate you and leave you unable to make certain decisions regarding the guardianship of your children, healthcare and finances. Unfortunately, many estate plans only delineate what is to happen in the event of a person’s death, not a long-term disability, and so are of little use in cases of incapacitation.
Though it may not seem like it at first, just sitting down to write an estate plan is an enormous step in the right direction. More information is available on our website.