DGAA bLAWg

The Importance of Having a Will that Provides for Minor Guardianship

Web Admin - Saturday, November 28, 2020

Kenilworth estate planning attorneyAlthough you may not think you need it, an estate plan can provide peace of mind and the assurance that your family will be taken care of after your death. Documenting your wishes ahead of time eliminates uncertainty and disputes, while maximizing the value of your estate when it is distributed among your beneficiaries. This is especially if you have children or other family members who rely on you for support. An experienced estate planning attorney can assist you with creating a will and trust that is appropriate for you and your family, including guardianship of any minors. 

What Is a Last Will and Testament?

Every estate plan should include a will, which is also sometimes referred to as a last will and testament. This legally binding document clearly states a person’s intentions or wishes after his or her death. The issues covered usually include who will act as the executor and who will inherit the estate. Regarding the estate, it can outline what will happen to the decedent’s possessions, such as whether they will be left to another person, an organization, or donated to charity. In addition, a will states who will become the guardian of any minor children.

Legal Guardianship of a Minor

Generally, only a parent of a child has the authority to make decisions about the child’s care. Sometimes, a parent is unable or chooses not to make decisions regarding his or her child’s care. In these situations, a person who is not the parent can become the legal guardian of the child. Legal guardianship permits an individual who is not the parent to make care decisions for a child, just like a parent would. This can include important matters such as the child’s healthcare, living situation, and education. For example, a minor cannot make decisions regarding his or her own medical care or treatment, only an adult can. The person with authority to make care decisions is called the child’s guardian, and he or she does not have to be a relative of the child.


One of the main reasons it is vital to include decisions about the guardianship of a minor in a will is when a parent dies. If no one is designated or appointed to have the responsibility of handling the child’s affairs, the court will determine who receives that authority. In cases where there is one surviving parent but he or she is incapable of raising the child, a guardian may be appointed to ensure the safety and well-being of the minor. Including this important issue in a will allows the person drafting it to be in control of who takes on this important responsibility. It is crucial to consider both short- and long-term factors of the child’s welfare, and who is best-suited for that role. Then, discussions between both parties should take place related to the specific wishes related to raising the minor. A Memorandum of Wishes can be drafted to address any and all concerns. This can also safeguard against relatives fighting over who should care for the child, which can cause great anxiety and emotional turmoil for the child as well as other family members. 

Contact a South Barrington Estate Planning Lawyer

Guardianship of a minor is especially important to ensure the well-being of that child. That is why it should be an essential part of your estate plan. Including this designation can help prevent arguments and disputes among family members in the event of your death. At Drost, Gilbert, Andrew & Apicella, LLC, we are ready to put our proven methods to work for you and your family. Our accomplished Schaumburg estate planning attorneys will help you draft an estate plan that includes guardianship of a minor if necessary. To arrange a free consultation, call our office today at 847-934-8000.


About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.






Source:
https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=4001&ChapterID=61



.



5 Tips For Non-Traditional Families When Creating an Estate Plan

Web Admin - Friday, June 28, 2019
Barrington estate planning lawyer same sex couplesToday’s families come in many forms. In fact, there are fewer “traditional” families than ever in which two opposite-sex parents are married for the first time and have children together. Since divorce is common, and couples often choose to live together and have children without getting married, many families include step-parents and step-children. In addition, the legalization of same-sex marriage has resulted in complex family arrangements involving biological children and adoptive children. Regardless of how a family is configured, it is important to plan for the future and ensure that all family members’ needs will be met. For non-traditional families, it is important to consider the following during the estate planning process:

1. Update your will - Your last will and testament specifies how you want your assets to be distributed to your heirs after your death and any other last wishes. You will want to be sure that your will addresses your partner, your children, your step-children, and any other family members.

2. Create a trust - In addition to your will, a trust can provide more control and flexibility for how you would like your assets to be distributed to your beneficiaries. A living trust can be changed or modified if necessary, and it can also be used to provide for your and your partner’s needs during your life.

3. Use power of attorney - While married spouses have the right to make decisions for each other, this is not always true for unmarried couples. A power of attorney agreement can be used to ensure that partners will be able to make medical or financial decisions for each other if one of them becomes incapacitated.

4. Consider a prenuptial or postnuptial agreement - When you get remarried, your new spouse will typically be entitled to receive half of your estate following your death. A prenup or postnup can ensure that certain assets will be set aside for any children you may have from a previous marriage or relationship.

5. Address plans for retirement - If you have any retirement funds saved in an account such as a 401(k) or IRA, you will want to be sure to name beneficiaries who will receive these funds following your death. You can name your spouse or partner as a beneficiary, as well as any children or step-children.

Contact a Kenilworth Estate Planning Attorney


When creating a comprehensive estate plan, you will want to be sure all of your family members will be provided for. Determining how to do so when you are in a non-traditional family can be a complex matter, and an experienced attorney can help you address issues involving same-sex partners, children from previous marriages, adoptive children, or other family members. Contact our Riverwoods estate planning lawyer today at 847-934-6000 to schedule a free consultation.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.


Sources:
https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=1773&context=sulr

3 Reasons Why a Living Trust Is More Beneficial Than Just a Will

Web Admin - Wednesday, January 23, 2019
Des Plaines living trust lawyerIf you wish to leave a legacy to your children or other beneficiaries after your death, it is imperative that you have an estate plan that will ensure prompt and accurate distribution of your assets. Many people think that writing a will is the best way to do this. However, while a will is important, putting your assets into a revocable living trust can provide several additional benefits.

Avoid the Illinois Probate Process 


In order to distribute assets according to the terms of a will, the will must go through the probate process. This involves filing various court documents required by law to establish the value of each asset and to re-title each asset from the deceased’s name to the recipient’s name. This can be a long, drawn-out process.

Secure Adult Heirs’ Immediate Access to the Estate


One of probate’s most serious drawbacks is the freezing of assets. Specifically, any assets that are held solely in the name of the deceased are frozen upon their death. Imagine a married couple who amassed several large investment and retirement accounts and multiple pieces of real estate during their lifetime. Upon the death of both spouses, their children cannot touch any of the assets until a probate court judge approves the will and appoints a Personal Representative to handle the estate. Leaving large investment accounts without active management can be risky.

By comparison, imagine that all of the couple’s assets had been placed in a living trust, meaning that the assets are titled in the name of the trust rather than in the name of any individual. Upon the death of the trust-maker, their designated successor has immediate access to the assets of the trust.

Secure Assets for the Long-Term Benefit of the Family


Imagine our married couple has three children and has a will. Upon the death of both spouses and probate action, the assets of the estate must be divided amongst the named heirs. Assuming the estate is to be divided equally among the three children, the inherited assets are now at risk to creditors, bankruptcy, a lawsuit, or a divorce. 

Creditors. If the married couple had all of their assets in a trust, ownership of those assets can remain titled in the name of the trust indefinitely. Because the assets are not titled in the individual children’s names, the assets are protected from creditors, even if one child files for bankruptcy or gets divorced. The beneficiaries named in the trust will have access to the assets in accordance with the directions specified in the trust documents. 

Heirs with disabilities. Upon the death of the spouses, one child (or an objective third party such as a bank) could be named as the successor trustee with directions to manage the trust in a certain way. This approach can be used to ensure that the use of the assets is prioritized in some way, such as to meet the basic needs of a child or grandchild with a disability. Keeping the assets in the trust can also serve to protect the right of a disabled heir to receive needs-based government benefits.

Underage heirs. Keeping the trust open with a successor trustee can also be beneficial for heirs who have not yet reached adulthood. When a will leaves assets to a minor, the probate court must appoint a conservator to manage the minor’s assets. Once our fictional married couple has died, there is no telling who that conservator might be and what decisions they might make. In contrast, assets left in a trust can be managed according to specific directions written into the trust. Thus, the maker of the trust can dictate when and for what purposes a youthful (or even as-yet unborn) heir can access their inheritance.

Consult a Palatine Revocable Living Trust Lawyer


A well-thought-out living trust can give you greater peace of mind and benefit your heirs in the long run. To discuss options for writing or updating a living trust, call an experienced Schaumburg living trust attorney at Drost, Gilbert, Andrew & Apicella, LLC. We have prepared living trusts for many high-asset families with complex issues of inheritance. To set up a free initial consultation, call 847-934-6000.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.


Sources:
https://www.isba.org/public/guide/livingtrust

Modern Family Estate Planning – Why Use a Living Trust?

Web Admin - Friday, October 20, 2017

Arlington Heights wills and trusts attorneyToday’s family looks much different than those from just 50 years ago. People no longer feel obligated to stay in a marriage that is not working, divorcees sometimes remarry, partners opt for cohabitation over remarriage, and there may be children from one marriage or both. While, in many ways, blended families are a positive thing – especially for kids – it does make estate planning much more complicated than it once was. A living trust can mitigate against many of these issues. Learn how with help from the following.


Potential Blended Family Pitfalls

People can cause some serious problems by either not having an estate plan or creating an ineffective one. The chief issue is that heirs could experience unnecessary financial difficulty while trying to muddle through the expensive and arduous probate process. Several other pitfalls must be addressed as well, however, especially in blended family estate planning. Consider some of the following possible examples:

- A father intended to leave everything to his children, but he failed to check his beneficiaries and update his estate plan. His home and other assets ended up going to his former wife. 

- A step-child expected to receive an inheritance, but the estate plan was unclear and state law does not provide for step-children. They receive nothing;

- A child inherits their father’s antique rifle, but it was promised to another child from a previous marriage;

- A husband dies and leaves his assets to his wife. When she passes away, she leaves everything to her children from a previous marriage. His children inherit nothing.

A Living Trust Can Mitigate the Risks

While it may be impossible to remove all risk of heirs fighting over an inheritance, there are several strategies that guarantors can use to mitigate against the possible damage of probate, tax consequences, family squabbles, debtors, and other common issues. The most effective tool is the living trust (revocable, irrevocable, marital, etc.). Each type works a little differently, but the primary goal is to ensure that the right person receives the right assets. Set up properly, a trust can also mitigate against spendthrift issues, ensure that even extended branches of family receive assets, and can even be specifically designated for certain expenses or needs (such as with college students, special needs children, or an ex-spouse who happens to be the other parent of your minor child). 

Why Plan Now?

No one wants to think about their death or the death of their spouse, and many dream of the death of their ex-spouse - which is why it can be easy to put off planning for it until you start to age. Sadly, not planning now can have severe consequences if an accident or incapacitation occurs to you, your spouse, or your ex-spouse. Avoid the consequences of ineffective and non-existent estate plans by contacting an experienced wills and trusts lawyer today.

At Drost, Gilbert, Andrew & Apicella, LLC, we work in your family’s best interests. Dedicated and experienced, our Arlington Heights wills and trusts attorneys wills and trusts attorneys can handle even the most complex of situations with skill. Call 847-934-6000 and schedule your personalized consultation today.


About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Sources:
https://www.fidelity.com/viewpoints/retirement/blended-familieshttps://www.nytimes.com/2017/01/13/your-money/estate-planning-early.html

Transferring a Home to an Adult Child – Why Putting Them on the Deed is Not an Option

Web Admin - Friday, October 06, 2017
Illinois wills and trusts attorneysAs parents age and their children grow up, they begin to face their own mortality. They realize they will not always be around, and that everything they own must be given to a loved one, a charity, or an adult child. Homes are one of the most commonly transferred items after death, but how you do it matters. Learn more about transferring your home to a child, including why simply “putting them on the deed” should never be an option. 

Dangers of Deed Transfers 

There are three basic ways to transfer the deed of your home: an ownership transfer deed, a will or living trust, or a transfer on death instrument. Of all the options, the first is your least desirable. Mostly, this is due to the tax implications that an heir may face, should you simply transfer the title over to their name. However, this is not the only concern when transferring a deed over to an adult child – nor is it the most concerning. 

Parents typically trust their children, but there have been instances in which children have sold the home, right out from underneath their parent, to gain a profit. Alternatively, if the child ends up in a lawsuit or falls behind on their income taxes, the house could have a lien placed on it. Because the deed is now in the child’s name, the parent (who may still be living in the home) is powerless. They cannot stop the seizure, remove the lien, or save their home. 

A Better Way to Transfer the Ownership of a Home 

Besides deed transfers, parents can use either a living trust or a transfer upon death instrument. How do you decide which is most appropriate for your needs or situation? The first step is to consider your situation. Is your adult child responsible? Can they maintain the deed on their own? Might they have a way to move the mortgage over to their name, or is their credit rating simply too low? All these questions – and more – can be answered by an experienced estate planning lawyer.   

Contact Our Arlington Heights Wills and Trusts Lawyers 

No one likes to think about passing away, which is why Drost, Gilbert, Andrew & Apicella, LLC work so hard to provide compassionate and experienced assistance. Committed to ensuring we exceed your expectations, our Arlington Heights wills and trusts lawyers can examine your situation, advise you of your options, and then assist you in developing creative estate planning solutions to fit your needs. Schedule a personalized consultation to learn more.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.


Source:

http://homeguides.sfgate.com/can-transfer-deed-house-kids-before-die-50431.html



IRAs and a Living Trust – What Every Grantor Should Know

Web Admin - Thursday, July 13, 2017

Mount Prospect wills and trusts lawyersAfter years, perhaps even decades of pouring money into your individual retirement account (IRA), it only makes sense to ensure it goes to the appropriate party if you do not live long enough to receive all the payments. Unfortunately, transferring an IRA to a living trust can be far more complex than most people realize. The following information can help you better understand how to avoid such consequences. You shall also learn where to find assistance with the process.

The Complicated Nature of IRA Accounts

Created under the Employment Retirement Income Security Act (ERISA) in 1974, IRAs were originally meant to provide employers with a way to offer affordable retirement benefits to their employees (at that time, most did not have the funds to cover a traditional pension plan). Now they are one of the most common types of retirement plans, and they can even be purchased by individuals with qualifying income and credentials.

Unfortunately, there are many rules, exclusions, limitations, and legalities involved with an IRA account – especially when it comes to the transfer or disbursement of the account. For example, IRAs can only be “owned” by the individual that started it. It cannot be transferred to a trust nor can it be owned by a business or other entity. Still, there are ways to transfer an IRA upon death. It just requires some thoughtful planning.

Transferring an IRA to a Living Trust

While one could simply name a beneficiary for their IRA account, some plan owners prefer the increased accountability of a trust. For example, if the grantor has a special needs child with their ex-wife, they may want to ensure that the funds are used to benefit the child directly. Just keep in mind that disbursement to a trust before the age of 59.5 is considered an early disbursement, which may result in an early payout penalty. As such, it is recommended that you speak with an experienced wills and trusts lawyer before naming a trust or changing the beneficiary on your IRA account. An attorney can also help ensure the right verbiage is used in your estate plan (i.e. “pass through,” “designated beneficiary,” etc.) to reduce the risk of any transfer issues.

Contact Our Mount Prospect Wills and Trusts Lawyers

Known for our creative solutions and personalized touch, the experienced Mount Prospect wills and trusts lawyers at Drost, Gilbert, Andrew & Apicella, LLC can assist you with your estate planning needs. Get started by scheduling a consultation. Call our offices at 847-934-6000 today.


About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Sources: https://www.forbes.com/sites/deborahljacobs/2014/09/04/iras-and-trusts-what-you-need-to-know/#4fe760a2172b
https://www.wellsfargo.com/help/faqs/investing-ira/http://www.bankrate.com/investing/ira/naming-a-trust-as-your-ira-beneficiary/



Illinois Wills and Trusts – The Use and Limitations of No Contest Clauses

Web Admin - Wednesday, May 24, 2017
Grief from losing a loved one can cause irrational behavior in even the most level-headed of people. When an inheritance is factored into the equation, arguments between family members can become downright volatile. In some cases, things can become so explosive that it irreparably damages relationships. This risk is why many people choose to create wills and trusts; they want to reduce the possibility of family strife. Unfortunately, it does not always work. Miffed family members can still contest a will or trust. An in terrorem provision may help. 

In Terrorem Provisions

An in terrorem provision, or a no contest clause, is sometimes used to discourage the contesting of a will or trust. It specifies that an heir may either lose their inheritance or receive only a nominal amount of money if they contest the validity of their loved one’s will or trust. Unfortunately, it is not always enough of a deterrent, and contests are still possible. 

Contests Can Still Occur

You can take all the right steps and put all the protective provisions in place, but you still cannot completely control what family members do once you are gone. Some may still contest the will, fully knowing they are at risk of losing their inheritance. Granted, individuals with smaller inheritances are far more likely to do so, but even those with a substantial amount to lose may consider the risk worth their potential gain. In some cases, that gain may not even relate to the inheritance; it could, instead, relate to getting “even” with a family member. 

Enforcement of No Contest Clauses in Illinois

An in terrorem provision is not much of a deterrent if it is not enforceable. Unfortunately, the law in Illinois is rather vague when it comes to the enforceability of no contest clauses. At least one court has overruled a no contest provision, stating that the contest was filed in good faith. However, that does not mean that all no contest provisions will be thrown out. Assistance from an experienced attorney can decrease the risk of language issues in your will or trust. As a result, your wishes are more likely to be honored by both your loved ones and the courts. 

Contact Our Arlington Heights Wills and Trusts Attorneys

If you fear family members may try to contest your will or trust and want to reduce the risk with an in terrorem provision, contact Drost, Gilbert, Andrew & Apicella, LLC for assistance. Experienced and dedicated to preserving your estate, our Arlington Heights wills and trusts lawyers will carefully examine your situation to help you develop a creative and comprehensive solution. Schedule your consultation by calling 847-934-6000 today.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Source:http://www.actec.org/assets/1/6/State_Laws_No_Contest_Clauses_-_Chart.pdf


A Will and Trusts Lesson from Some of the Greatest Music Legends

Web Admin - Wednesday, April 26, 2017
Illinois wills and trusts attorneysIf there is any one group of people who should have an estate plan in place, it is celebrities. Of course, like most people, celebrities become distracted with life or refuse to face the possibility of their own mortality. Should they continue to do so and pass away, their estate becomes at risk. Take, for example, the issues faced by the families of Bob Marley and Jimi Hendrix. Both were major music icons, both died without a will in place, and both left behind a frustrating mess.

Jimi Hendrix’s Estate

When Jimi Hendrix died in 1970, the entirety of his estate went to his father, Al Hendrix. When Al died in 2002, the estate then went to Al’s step-daughter, Janie Hendrix. Jimi’s brother, Leon, received nothing from the estate. Since then, the family has been in a long, grueling, and contentious family feud.

Some of the beneficiaries had asserted that Janie and Jimi had never had a close relationship and that she had no rights to the estate. There were also concerns over how she had managed the estate. At the end (2004), a judge determined that Janie had mismanaged the estate and breached her duty as a trustee. Even still, Leon received nothing more than the gold record that had been gifted to him by his father years before his death.

Bob Marley’s Estate

Bob Marley never saw himself as a “rich” man. In fact, he claimed not to have much in the way of assets during a 1979 interview with “60 Minutes.” What he failed to understand was that his legend would live on. Without rights to his image, trademark, and personality, the market would become a free-for-all. In some cases, the issue of selling merchandise would go beyond the capital money; it would be a matter of disgrace for those that loved and knew the legend best.

To stop the unabashed and insensitive manufacturing and sale of their loved one’s image, the family had to purchase rights to his image and trademark. Had Marley had the insight to understand the implications of passing away without a will, he might have better protected his family and his legacy.

Using a Will to Protect Your Legacy and Estate

Whether you have a sprawling estate worth millions, a legacy that needs to be preserved or only loved ones that you want to take care of once you are gone, draft a will. Schedule a consultation with the Long Grove wills and trusts lawyers at Drost, Gilbert, Andrew & Apicella, LLC and get started today. Call 847-934-6000.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Sources:http://www.billboard.com/articles/news/473231/the-business-of-bob-marley-billboard-cover-story
http://www.cnn.com/2004/LAW/07/13/hendrix/index.html?iref=newssearch
http://www.seattletimes.com/entertainment/music/latest-jimi-hendrix-family-feud-resolved-in-settlement/



VA Benefits and the Transfer of Assets to an Irrevocable Trust

Web Admin - Friday, November 27, 2015

VA benefits and irrevocable trust, Illinois employment lawThe Department of Veterans Affairs (VA) provides our nation’s veterans with important benefits after they have been discharged from service. In order to qualify for those benefits, veterans must meet certain requirements. For some veterans, it may be necessary to transfer assets into an irrevocable trust to lower his or her net worth. 

Qualifying for Pension 

The Veterans Pension benefit is a tax-free, monetary benefit for low-income veterans. In order to qualify, the following requirements must be met: 

1. Veteran must be 65 years of age or older or permanently and totally disabled;

2. He or he must have been discharged under conditions other than dishonorable;

3. He or she must have served, which generally involves a minimum period of active duty service, one day of which was during wartime;

4. Net worth must not be considered too substantial; and

5. Countable family income must be below the yearly limit as set by law. 

Veterans who are concerned about their level of net worth may consider forming an irrevocable trust. By creating an irrevocable trust, net worth can be reduced in order to qualify for the Veterans Pension. The VA does not assess a penalty for transferring assets as long as that transfer occurs prior to filing a claim or notifying the VA of an intent to file a claim. The determination of net worth is subjective—the VA has discretion in determining whether a veteran’s assets are too large to qualify for the Veterans Pension. 

An irrevocable trust can be used to hold assets that are provided by a veteran in order to reduce net worth. Importantly, a veteran claiming benefits (as well as his or her spouse) cannot be an income or principal beneficiary of the trust established in order to obtain VA benefits. This is because the VA requires that the rights to property and income from that property be actually relinquished to be considered a reduction of net worth. 

A second issue relates to whether to form the trust as a grantor trust or a non-grantor trust. The VA compares income reported to it with Supplemental Security Income (SSI) and Internal Revenue Service (IRS) income records through a process called Income Verification Match (IVM). Due to the nature of a grantor trust, there may be a discrepancy between income reported to the VA and income that appears with IRS filings. 

Under a grantor trust, all items within the trust are taxed to the grantor on his or her personal income tax return. Ordinarily, the grantor is the person who funds the trust, which, in this case, is the veteran claiming benefits. The VA may assume that the tax reported on the veteran’s tax return is based on income of the veteran, which may lead to lower (or complete denial of) benefits. Therefore, a non-grantor trust, in which the trust is responsible for any tax, is likely more desirable, in an attempt to avoid this potential issue. 

Forming a Trust 

If you would like more information on the formation of a trust, reach out to a skilled Illinois estate planning attorney today. Our firm proudly helps individuals in the communities of Inverness, Schaumburg, Palatine, Arlington Heights, Kenilworth, Long Grove, Riverwoods, Barrington, South Barrington, and Mount Prospect. We look forward to hearing from you. 

About the Author:

Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Source:
http://www.benefits.va.gov/pension/







Capital Gains Tax and Trusts

Web Admin - Thursday, June 25, 2015

capital gains tax, Illinois estate planning lawyerToday, increasing numbers of individuals are turning to trusts as opposed to wills for their estate planning. Trusts are often advantageous over wills because they allow for greater flexibility and control over assets. It is important to know the impact of capital gains tax on the assets that fund a trust.

Step-up in Basis

Capital assets include items like a house, stocks or bonds, and machinery. When one of these items is sold, the difference in the sale price and the original purchase price is considered a capital gain or loss. If an item is sold and a profit is realized, the capital gain is taxed.

If an individual forms a grantor-type trust, all appreciated assets that are transferred into the trust (items like real estate or a stock portfolio) are eligible to receive a step-up in basis upon the death of the grantor. Basis is the cost of the property or asset. A step-up in basis is a readjustment of the value of an asset to its current value for tax purposes upon inheritance of the asset. This is important because it minimizes the beneficiary’s capital gains taxes going forward.

For example, let’s say a grantor purchased an asset for $50 and transferred it to a trust. The grantor’s basis is $50, meaning if the asset were to be sold, the difference between $50 and the sale price would be the amount subject to the capital gains tax. Now, let’s say that at the time of the grantor’s death, the value of the asset is $100. The beneficiary receives a step-up in basis, meaning his or her basis is $100, not the $50 that the grantor originally paid. This is important because if the beneficiary decides to immediately sell the asset for $100, she will not be subject to any tax. Further, any sale in the future after the asset increases in value will be subject to tax on the difference between the sale price and $100, as opposed to $50 if a step-up in basis was not available.

An important consideration is when the step-up in basis is applied. For example, how is the step-up in basis determined if a married couple each owns half of an asset through the use of separate trusts and they die at different points in time? If the deceased spouse’s share is transferred to the surviving spouse, the surviving spouse will receive a step-up in basis. When the surviving spouse dies and the trust is inherited by the beneficiaries, they will also receive a step-up in basis.

Finally, it is important to be aware of the Medicare tax on “unearned” net investment income. This imposes a 3.8 percent tax on the net investment income, which includes capital gains, of joint filers who have a modified adjusted gross income of greater than $250,000 or single filers with an adjusted gross income of greater than $200,000.

Help Forming Your Trust

If you would like more information about forming a trust, you should reach out to an experienced Illinois estate planning attorney today. Our firm proudly represents individuals throughout the northwest suburbs, including areas such as Crystal Lake, Inverness, Schaumburg, Kenilworth, Long Grove, Palatine, and Barrington.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.


Recent Posts


Tags

insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys real estate leasing Palatine employment attorney Jay Andrew deed transfer personal injury law firm Long Grove estate planning attorneys Palatine employment lawyer unauthorized overtime pedestrian accidents trench injuries Rolling Meadows personal injury attorney Crystal Lake law firm Buffalo Grove medical malpractice lawyers Arlington Heights Traffic Lawyer Barrington employment law attorney Deer Park real estate law firm Barrington personal injury lawyer Buffalo Grove personal injury attorney insurance denials Deer Park traffic accident attorney home inspection lawyer dynasty trusts privacy Des Plaines real estate lawyer Barrington criminal lawyer Illinois Transfer on Death Instrument Schaumburg personal injury attorney Barrington business law firm Illinois personal injury lawyer probate lawyer Des Plaines claims law firm privacy laws Schaumburg wrongful death attorney distracted driving accidents Illinois estate planning law firm wrongful termination Barrington employment law firm medication errors meal breaks Illinois insurance attorney jet ski accidents Illinois job attorney auto accidents underinsured motorist DMV Illinois traffic ticket lawyer Illinois Trust Code underage DUI Illinois estate planning unpaid assessment Illinois employment law attorneys drugs traumatic brain injuries insurance adjusters TBI premises liability digital evidence Crystal Lake personal injury attorney Schaumburg real estate lawyer fiduciary rule Chicago insurance law firm School Visitation Rights Act Deer Park medical malpractice attorney Do Not Resuscitate Rolling Meadows real estate attorney Family Medical Leave Act Des Plaines accident attorney Schaumburg estate attorney digital media accounts, estate planning, Arlington Heights estate planning attorney, Barrington criminal defense lawyer compensatory time Inverness real estate lawyer Barrington drug crime attorney Barrington workers compensation attorney spinal cord injury mortgage DUI Palatine construction attorney accidental death benefits Illinois red light cameras drug crime Inverness probate lawyer filing a medical malpractice claim Arlington Heights personal injury lawyer Chicago estate planning Illinois rollover accident lawyers Illinois trusts attorney controlled substance insurance claims Exclusions digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers employees right to work murder Crystal Lake medical malpractice lawyer car crashes back injuries bicycle dooring accidents Rolling Meadows criminal attorney Rolling Meadows employment law attorneys minimum wage owner responsibility Crystal Lake insurance lawyer sexual images Rolling Meadows insurance lawyer Des Plaines drug lawyer Illinois medical malpractice lawyers employment law Mount Prospect wills and trusts lawyers employment lawyer Palatine life insurance lawyer small business Crystal Lake traffic lawyer probate drug crimes lawyer power of attorney Crystal Lake car accident lawyer construction accidents guardianship attorney personal injury claims gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys Illinois medical malpractice claim Crystal Lake tax lawyer Federal Food Drug and Cosmetic Act Illinois insurance claim dispute lawyer subcontractor workers compensation benefits Inverness DUI lawyer Schaumburg drug defense lawyer Arlington Heights employment attorney FMLA Rolling Meadows traffic attorney Illinois insurance claim attorney Illinois workers compensation lawyer Rolling Meadows marijuana attorney defective products trusts Illinois DUI attorney Barrington employment attorney Arlington Heights wills and trusts attorney fatal car accidents Crystal Lake business law attorneys Illinois insurance disputes Deer Park traffic lawyer Schaumburg civil litigation attorney real estate attorneys workers comp Deer Park DUI lawyer Des Plaines personal injury lawyer Illinois boating accident lawyer Policy Cancellation involuntary manslaughter distracted driving accident victims personal injury murder defense DNR traumatic brain injury Barrington estate planning attorney special needs trust in terrorem provision Detainer Actions job lawyers Illinois corporate lawyer Arlington Heights car crash attorneys Illinois employee rights attorney. Illinois Probate Act of 1975 Barrington litigation attorney ken apicella medical malpractice senior citizens Super Mario Illinois pedestrian accident attorney whistleblower protections Chicago employment lawyer Transfer on Death Instrument federal regulations for LLCs living trust vs will internet probate claims Palatine probate lawyer Illinois pet lawyer suspended license insurance claim dispute Rolling Meadows employment attorney employee misclassification operating agreements drug possession traffic deaths CAM new real estate form elder law Arlington Heights accident attorney Rolling Meadows DUI lawyer Illinois wrongful termination lawyer Illinois will lawyer Rolling Meadows probate lawyer investment property Arlington Heights car accident lawyer low-ball insurance settlement Buffalo Grove employment lawyer Fourth of July Home Sale Contingencies Crystal Lake medical malpractice law firm contracts Des Plaines injury law firm Long Grove real estate lawyer Illinois estate planning attorney life insurance policy Illinois employment laws FSLA Palatine civil litigation lawyer Barrington life insurance lawyer Palatine traffic lawyer homestead rights real estate closing driving head on collisions license reinstatement loopholes Des Plaines civil attorney Crystal Lake employment law attorney deadly crashes Crystal Lake car accident attorney fault based insurance Schaumburg estate planning attorney eluding a police officer criminal law real estate lawyer food poisoning Illinois trucking safety Illinois registered agent IRS Crystal Lake bike accident lawyer rollover car crashes personal injury lawyer Rolling Meadows life insurance claim denial attorney modern family estate planning Inverness corporate attorney Arlington Heights wills and trusts lawyer car accident Illinois attorney Des Plaines personal injury lawyers Whistleblower Claims insurance claim dispute attorney Illinois Workers’ Compensation Commission Crystal Lake employment attorney bad faith insurance claims BAIID workplace sexual harassment crossover accidents Illinois home inspection Des Plaines medical malpractice attorney bike accident murder charges personal injury attorney Illinois insurance claim dispute lawyers how to avoid common denials of life insurance claims trustee preventable medical errors defective products lawyer Illinois small business Illinois real estate caregiver capital gains tax Barrington personal injury attorney car accident lawyers agent personal injury accidents underfunded trust Thanksgiving Illinois elder law attorney changes to mortgage law pregnant women golf accidents liability claims Illinois Smoke Detector Act Rolling Meadows car accident lawyers Chicago traffic lawyer Illinois employment law revenge porn Arlington Heights lawyer Crystal Lake criminal defense attorney Schaumburg Attorney Rolling Meadows corporate lawyer marijuana traffic violations healthcare ObamaCare Illinois medical malpractice case boating under the influence Kenilworth estate planning attorneys estate planning Mount Prospect real estate lawyer income distribution deducation clemency brain injury institutional trustee tax attorney medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers Arlington Heights insurance attorney Chicago life insurance attorney attorney fees product liability Schaumburg insurance lawyers Rolling Meadows boating crash lawyer employment attorney Illinois insurance dispute lawyers Class A misdemeanor Buffalo Grove personal injury lawyer DGAA Chicago corporate attorney college kids license revocation vacation home Barrington medical malpractice lawyers dog bites probate fees Long Grove wills and trusts attorneys pedestrian injuries, pedestrian fatality criminal defense Rolling Meadows criminal lawyer Buffalo Grove injury lawyer Illinois construction accident attorney probate claims process Des Plaines pet law attorney Palatine corporate attorney drug crimes Illinois speeding lawyer Chicago car accident lawyer pedestrian accident pet law truck collisions Buffalo Grove law firm Crystal Lake pedestrian accident lawyer insurance agent negligence Des Plaines insurance attorney beneficiary complications sexual harassment pedestrian-automobile accident foreclosure Des Plaines independent contractor Schaumburg elder law lawyer employment law, Illinois employment laws Illinois employment attorneys Landlord Tenant Ordinance Palatine traffic accidents Illinois employment law attorney Illinois real estate lawyer estate planning lawyer personal injury claim Mount Prospect elder law attorney insurance claim Chicago attorney wrongful death criminal digital information advance healthcare directive Crystal Lake personal injury lawyer Home Remodeling Repair Act Crystal Lake employment lawyer marijuana crimes attorney estate planning for college students paid sick leave Palatine elder law attorney expungement car accidents denied insurance claim cell phone tower data condo association cause-of-death exclusions slip and fall Illinois Sales Representative Act estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, Fair Labor Standards Act Deer Park employment law attorney Barrington boating accident attorney texting and driving Food and Drug Administration's Food Safety Modernization Act Palatine real estate lawyer mass shooting medical malpractice claims lapse in policy car accident lawyer employment contract Chicago insurance claim attorneys Schaumburg criminal attorney Palatine injury attorney Illinois injury lawyer Retaliatory Discharge BUI living wills criminal record rumble strips employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys federal crimes Barrington Illinois estate planning lawyer Illinois criminal defense attorney Des Plaines Traffic Lawyer trauma after an accident Deer Park criminal attorney blood alcohol content most common reasons for life insurance claim denials preventing accidents Riverwoods estate planning lawyer South Barrington real estate attorney DUI attorney Illinois car accident attorney DUI penalities material misrepresentation Palatine civil attorney Des Plaines personal injury attorney Deer Park accident attorney Palatine corporate law attorneys natural gas explosion hands free device Illinois traffic laws residential real estate Long Grove estate planning slip and fall accidents Schaumburg traffic lawyer surgical mistakes traffic laws Arlington Heights medical malpractice lawyer Rolling Meadows estate planning attorney traffic offenses cell phone ACA Illinois workplace lawyer GM ignition switches Rolling Meadows litigation lawyer Illinois wills and trusts attorneys wage theft dealing with problem employees Schaumburg corporate attorney disability benefits life insurance claims Illinois defective products attorney uninsured motorist Buffalo Grove probate lawyer Long Grove estate planning attorney construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Colin H. Gilbert unpaid overtime license life insurance claim denial, denial of life insurance claim boating accidents Deer Park personal injury lawyer landlord top life insurance claim denials jet ski Rolling Meadows Traffic Lawyer boating DUI Illinois living will Schaumburg employment law attorneys employee discrimination insurance agents overtime pay pizza emoji Crystal Lake estate planning lawyer Rolling Meadows personal injury lawyer Rolling Meadows medical malpractice lawyers Buffalo Grove traffic lawyers trust payments life insurance lawyer no contest clauses Illinois tax attorney bicycle accidents Des Plaines DUI attorney comparative negligence Arlington Heights personal injury attorney Illinois business law atorneys Attorney Ken Apicella LLCs Palatine Attorney Schaumburg life insurance attorney rent to own real estate contracts Illinois personal injury attorney Des Plaines collections attorney social media after death Arlington Heights tax lawyer healthcare claims Illinois traffic accident lawyer irrevocable trust life insurance Kenilworth estate planning lawyer medical research Rolling Meadows tax attorney business litigation Barrington real estate lawyer Crystal Lake pet attorney Illinois medical malpractice attorney Inverness estate planning lawyer rest breaks work unions probate process pet bites Palatine law firm Schaumburg personal injury lawyers real estate contract Chicago employment attorney forming a corporation in Illinois living trust benefits Rolling Meadows accident lawyer Illinois LLC creation civil litigation Illinois motorcycle accident lawyer Inverness personal injury attorney wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace Joliet general practice lawyers Colin Gilbert Buffalo Grove car accident lawyer Schaumburg criminal law attorney breathalyzer test trucking accident lawyers wills Chicago trucking accident attorney Rolling Meadows personal injury lawyers living trust Crystal Lake will lawyer Illinois driving without license Schaumburg estate planning lawyer Employment Discrimination Law South Barrington real estate lawyer Buffalo Grove corporate attorney Affordable Care Act coronavirus Illinois law Deer Park motorcycle accident lawyer Rolling Meadows insurance attorney insurance attorney corporate law Inverness injury lawyer Schaumburg injury lawyer medical marijuana Legal Info traffic tickets POA dram shop law Illinois blended families Arlington Heights Attorney estate attorney insurance denial appeals trucking accidents Palatine drug lawyer BAC insurance negligence Schaumburg motorcycle accident lawyer vacation home fines unfunded trust Barrington Traffic Lawyer estate tax Palatine insurance lawyer Inverness civil lawyer Deer Park workers compensation lawyer Inverness elder law lawyer problem employees Palatine workers compensation lawyer Illinois employment law firm natural gas Rolling Meadows drug defense attorney traffic accidents Chicago will attorney denial of insurance claim estate plan appealing an insurance claim Des Plaines tax law firm Illinois collections attorney digital assets Illinois jet ski accident lawyer Illinois workplace discrimination attorney real estate attorney field sobriety test Des Plaines motorcycle accident attorney Arlington Heights TBI attorney Arlington Heights real estate lawyer commercial leases Arlington Heights wills and trusts attorneys Rolling Meadows Attorney creditors swimming pools IRA trust transfer holiday statistics denial of life insurance Schaumburg construction accident lawyer Illinois workers compensation attorney Rolling Meadows insurance claim denial Buffalo Grove traffic attorney hiring employees Arlington Heights wills and trusts lawyers Illinois personal injury lawyers child safety drunk driving statistics Palatine trusts lawyer employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, startup company Chicago biking tips Barrington injury attorney denied insurance claims landlord tenant law employee rights icy parking lots Long Grove real estate attorney Rolling Meadows employment law attorney civil litigation attorney Illinois business lawyer Buffalo Grove life insurance attorney Palatine criminal defense lawyer DUI defense medical malpractice compensation Self-Directed IRA Accounts caretaker rights comp time drunk driving automated cars Buffalo Grove insurance claim dispute lawyers insufficient documentation Crystal Lake injury attorney speeding consent to a search Inverness traffic law firm spinal cord injuries construction contracts cell phone accidents workers compensation Des Plaines criminal attorney car crash reckless homicide Illinois insurance lawyer Schaumburg car accident attorney insurance claim denials Illinois personal injury Palatine punch death Palatine personal injury lawyer Inverness real estate attorney Crystal Lake civil litigation lawyer Chicago will attorney, social media platforms, Illinois estate planning lawyer, personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys Buffalo Grove real estate attorney Barrington estate planning lawyer commercial real estate Rolling Meadows insurance dispute lawyers, insurance dispute insurance dispute Schaumburg probate attorney sole proprietorship hit and run accident products liability insurance dispute attorney rollover accidents Illinois employment lawyer real estate zoning Illinois insurance claims lawyers Buffalo Grove criminal defense lawyer Illinois Human Rights Act Barrington civil litigation attorney pay when paid contract Chicago estate planning lawyer Illinois bicycle safety Crystal Lake medical malpractice attorneys liens Illinois traffic attorney breach of contract llinois Real Estate Lawyers Association estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Schaumburg personal injury lawyer elder abuse condo car collision overtime violations Illinois probate lawyer motorcycle accident Schaumburg medical malpractice lawyer Illinois civil litigation lawyer Arlington Heights traffic attorney estate planning trusts IRELA Forcible Entry texting while driving insurance claim delay Illinois mortgages Schaumburg employment attorney Chicago lawyer liability Inverness accident lawyer first degree murder installment contracts Crystal Lake traffic attorney loss of consortium Arlington Heights estate planning attorney pain and suffering Des Plaines real estate attorney Illinois lawyer traffic violations defense Arlington Heights trucking lawyer PTSD license suspension financial advisors foreclosed rental property health insurance dispute Kenilworth estate planning attorney Palatine employment law lawyer commercial leasing IRA benefits fiduciary rule delay Inverness insurance attorney Mt Prospect Attorney Arlington Heights employment law attorneys Crystal lake insurance dispute attorney Des Plaines drug crimes lawyer Rolling Meadows traffic law firm wills and trusts Barrington attorney Crystal Lake accident attorney Arlington Heights pedestrian accidents estate planning attorney Arlington Heights injury attorney Arlington Heights criminal lawyer real estate severance agreements anesthesia errors power of attorney for healthcare Liquor Control Act taxes manufacturing Palatine estate planning lawyer Illinois wills and trusts car crash injuries Rolling Meadows insurance dispute lawyers civil rights violation insurance disputes Illinois traffic attorneys traffic crimes gift taxes Illinois Wage Payment and Collection Act Rolling Meadows business lawyer nursing home negligence Palatine business attorney

Archive