Estate planning is an important process for protecting assets and ensuring loved ones are cared for upon your passing. Yet, many individuals make critical mistakes that can lead to disputes, unexpected tax liabilities, or assets being distributed against their wishes. A well-structured estate plan is more than just a will—it includes trusts, powers of attorney, healthcare directives, and careful tax planning.
As Naperville estate planning attorneys, we have seen how poor planning can lead to costly and stressful situations for families. By understanding the most common estate planning mistakes and taking proactive steps, you can protect your estate and give your loved ones peace of mind.
One of the most significant mistakes is not having an estate plan at all. Without a valid will or trust, Illinois intestacy laws will determine how assets are distributed. Under 755 ILCS 5/2-1, assets will pass to heirs in a specific order, often leading to outcomes that do not reflect the deceased’s wishes.
Many assume estate planning is only for wealthy individuals, but anyone with assets, children, or specific preferences should have a legal plan in place.
Even a well-crafted estate plan can become outdated if it is not reviewed regularly. Life changes such as:
Under 750 ILCS 5/510, divorce automatically revokes certain beneficiary rights. However, failing to update wills, trusts, or beneficiary designations may still result in an ex-spouse inheriting assets.
Illinois imposes an estate tax on estates exceeding $4 million. Without proper planning, heirs may face substantial tax liabilities. A revocable living trust or gifting strategy can help reduce estate tax exposure while ensuring assets pass to beneficiaries efficiently.
Selecting the right person to manage an estate or trust is critical. Many choose a family member without considering their ability to handle financial and legal responsibilities. Under 755 ILCS 5/6-3, an executor must act in good faith and fulfill legal duties properly. If an executor is unqualified, it can lead to:
In some cases, appointing a professional trustee or co-executor ensures proper oversight and administration.
Estate planning is not just about asset distribution—it should also include provisions for incapacity. If someone becomes mentally or physically unable to make decisions, having a power of attorney and healthcare directive in place prevents the need for court-appointed guardianship.
Under 755 ILCS 45/4-1, a durable power of attorney allows a trusted individual to handle financial and legal matters if the person becomes incapacitated. Similarly, an advance healthcare directive ensures medical preferences are followed.
Many people fail to include digital assets in their estate plans. Social media accounts, email, cryptocurrency, and online banking need to be addressed to prevent complications for heirs. Illinois law allows individuals to designate a digital asset fiduciary under 755 ILCS 70/1 et seq., ensuring online accounts and digital property are properly transferred.
If someone dies without a will or trust, their assets are distributed under Illinois intestacy laws (755 ILCS 5/2-1). This means the court will determine who inherits assets which may not align with the deceased’s wishes.
Estate plans should be reviewed every three to five years or after significant life events, such as marriage, divorce, the birth of a child, or acquiring new assets. Failing to update documents can lead to unintended consequences.
A will allows for asset distribution, but a trust provides additional benefits such as avoiding probate, reducing taxes, and maintaining privacy. Trusts are often beneficial for high-value estates or specific inheritance conditions.
Probate is the court-supervised process of distributing assets and settling debts after death. Assets in a living trust bypass probate, reducing delays and legal expenses. Proper estate planning minimizes or eliminates the need for probate.
Executors and trustees should be responsible, financially knowledgeable, and able to handle legal matters. Many people choose family members, but a professional trustee may be a better option in complex estates.
A power of attorney should outline who will manage finances, legal affairs, and healthcare decisions if the individual becomes incapacitated. Without this document, loved ones may need court approval to handle important matters.
Yes. Digital assets, such as email, cryptocurrency, and social media accounts, should be included in estate planning documents. Illinois law allows individuals to designate a fiduciary to handle digital property under 755 ILCS 70/1 et seq.
Estate planning mistakes can lead to legal battles, unnecessary taxes, and delays in asset distribution. At Keller Legal Services, our firm provides comprehensive estate planning solutions tailored to our client’s unique needs. Whether you need a will, trust, or power of attorney, we ensure your assets and loved ones are protected.
Contact our Naperville estate planning lawyers at Keller Legal Services by calling 630-505-1515 to receive your free consultation. We serve Naperville, Aurora, and clients throughout Chicago, Illinois.
