Flowers are a wonderful demonstration of your love on St. Valentine’s Day. But show your spouse or loved ones how much you care by protecting their future with an updated estate plan. Like many Americans, you may not have reviewed your will lately. But there are benefits of updating your estate plan now.
Did you know that only about 33% of Americans have a will or trust? If you have an estate plan, you’re ahead of the group! But you need to review and update the estate plan periodically. In fact, you should do so every 3 – 5 years. Think about all the changes that have happened in your life in the last 5 years. Maybe you have married, divorced, moved or had children.
Besides reasons to update your estate plan, there are benefits that you don’t want to miss out on. Here are 3 benefits of updating your estate plan now:
Let’s take a closer look at each of these.
New Tax Laws
Estate tax exemption is the amount of money you can leave people without it being taxed. In the past several years, estate tax exemptions have increased, allowing you to leave more money to your loved ones without them having to pay tax on it. In Illinois, the estate tax exemption is $4 million. And while that may sound like more than you have, remember, your estate plan includes your property and assets, retirement accounts and insurance policies. This can all quickly add up.
New Rules for Inherited Retirement Accounts
Within the last several years, rules for beneficiaries withdrawing your retirement funds have changed. In the past, beneficiaries could withdraw your retirement funds over many years, allowing a steady flow of income. Now, all funds must be withdrawn within 10 years after your death, and this may put them in a higher tax bracket. But you can move your money out of retirement accounts and pay the tax yourself. Then you can put the money into investments, or life insurance or give it as gifts now while you’re still alive.
Review Retirement and Insurance Beneficiaries
You should not put your retirement and insurance beneficiaries in your will. This is because you have named beneficiaries on the policies, and that will always take precedence over a will or trust. This means that when you update your will or trust, you’ll also want to review the beneficiaries of your policies. Perhaps you still have your ex named as your life insurance beneficiary (which you may not want), or you named your parents to receive your life insurance funds and they have passed away. Now is the perfect time to review your beneficiaries.
Our estate planning lawyers can help you review and update all parts of your estate plan. Now is the time to talk to a qualified attorney in Chicago to ensure you receive the benefits of an updated estate plan. Contact the Estate & Probate Legal Group at 630-864-5835.
Areas We Serve: Cook, DuPage, Kane, Lake, and Will counties.