Have You Ever Paid Off a Child’s Credit Card?

If you’ve ever had to bail your child out financially, then keep reading.

I have a list that I call the “Dirty Dozen Mistakes of Estate Planning” and #7 on the list is: Thinking your child will start being good with money later if he or she is terrible with money right now.

Inheritances can disappear fast. This is true even when a child is pretty good with their money. But what if you KNOW the child is not wise financially? Maybe you have bailed them out more than once with credit cards, overspending, etc.? You keep telling them to budget and plan ahead, but they don’t.

What will happen when they inherit from you? Do you think they’ll wake up one morning and suddenly be good with money? Don’t kid yourself. People don’t often change how they spend. Your plan needs to take steps to protect the inheritance you leave. If not, it could be gone in a flash.

If you’re concerned about how your child would handle their inheritance, take our quiz “Is My Family Ready for Their Inheritance?” or keep reading about the issue here:

6 Reasons You Shouldn’t Treat Your Kids Equally

Protecting Your Family Like an NFL Lineman: 4 Risks to an Inheritance

Stop Thief! 10 Things that Can Steal from Your Estate

How to Avoid an Estate Battle After You’re Gone

Can your estate plan pass the Down Low test?

What a Child’s Game Can Teach us About Planning…

In our house, the “Down Low, Too Slow” game is very popular. It goes like this:

Give me five (hand slap)

Way up high (another hand slap)

Down low (pull hand away before it can get slapped)

Too slow!!

It always gets a laugh out of the kids. Even after the 10th time in a row!

“Up High, Down Low” is also good estate planning advice. A good plan will include:

  1. NOW – look at your situation, finances, family. What are your goals and risks?
  2. UP HIGH – look at the older generation. When the older generation passes, will they be leaving you an inheritance that could create estate tax problems for you? Will they face nursing home costs that could impact the family? Will their lack of planning give you more stress later or more conflict with other siblings?
  3. DOWN LOW – look at your kids and grandkids. What is their financial situation? How will an inheritance impact them? Will they be ready for it? Will your daughter-in-law spend it all? Will it lead to extra taxes for the kids?

A good estate plan considers those older and younger than you. If you’re not sure about the state of your plan, give us a call at 217-726-9200. We’ll be happy to chat with you.

5 Reasons You Need a Trust

Trusts are a very valuable planning tool. When people think about estate planning, most people think about wills. While wills are the most basic/common tool for estate planning, trusts are an incredibly effective way to plan for things that wills can’t address. Trusts can be used to:

  1. Organize your assets so it’s easier on your family later. (Read about two types of asset organization mistakes here.)
  2. Set out instructions for when you’re not able to make your own decisions — either upon disability (like a stroke) or death.
  3. Keep things private. (All wills are public record.)
  4. Protect assets from creditors, divorces, kids who don’t know how to manage money and even future lawsuits you can’t anticipate (like car accidents).
  5. Reallocate assets to maximize long-term care benefits such as Medicaid or VA benefits.

If you’re ready to get started protecting what you’ve worked so hard for, call us at 217-726-9200 to schedule an initial appointment with one of our attorneys. If you want to learn more without any obligation, our free 1.5-hour workshop, Aging With Confidence: 9 Keys to Wise Planning & Peace of Mind, is a great way to learn about effective planning for every stage of life while finding out why our approach is so unique and effective. Give us a call at 217-726-9200 to RSVP.

estate planning quiz

Estate Planning Quiz: 8 Questions to Help You Know Where You Stand

The following quiz helps you identify weak spots in your estate planning. For many people an estate plan just means a will, but oftentimes that is not enough to accomplish the goals you have or to protect your loved ones. Honestly answering these 8 questions will help you know if your plan needs more work.

  1. How old is your will? (Changing life circumstances, such as marriages, divorces, etc. can impact old wills.)
  2. Who would manage your finances if you had a stroke?
  3. Is your legal and financial information organized and easy to find?
  4. Do you know whether your estate would avoid probate court? (A time-consuming and expensive process.)
  5. Do you know whether you will owe estate taxes?
  6. If you have an IRA or Annuity, do you know when (or if) your family will have to pay taxes on it?
  7. If something happened to you tomorrow, would your family know what to do?
  8. Are your loved ones (kids, grandkids, etc.) as good with money as you are?

If you don’t know the answers to some of these questions, it’s time to learn more about effective estate planning.

Here are some next action steps to take:

  • Explore our website. Our website is here to be an educational resource to anyone who wants to learn more about effective estate planning. We are passionate about helping people plan because we see the good that can come of it when it’s done properly, and, unfortunately, we see everyday the heartbreak that ineffective (or no) planning can cause.
  • Sign up for our e-newsletter. Our bi-weekly newsletter aims to help people learn more about planning and learn more about Edwards Group. Through this weekly email we share insights and stories about proper planning and why it’s so important. We also know that trust is vital in forming a strong relationship with our clients, so we help people get to know us by sharing things like vacation pics from David’s latest family trip.
  • Attend a free workshop. Education is a core foundation of Edwards Group, so in addition to our website and e-newsletter, attending a free workshop is another great way to learn more about effective planning. Our current workshop is Aging With Confidence: 9 Keys to Wise Planning & Peace of Mind.
  • Get started today. If you’re ready to jump right in and get started, all you have to do is call us and schedule an Initial Meeting with an attorney. At the Initial Meeting, we will review your concerns and goals, then the attorney will help you understand the unique risks facing your family. Call 217-726-9200 and one of our team members will happy to help you get started.
  • Hope things will just work out. This is, frankly, the easiest thing to do, and sadly, the worst thing you can do for your family. Estate plans aren’t really about you and what happens when you die. They are about what type of life your family will have after you’re gone. Procrastination is the greatest threat to protecting your family. We have designed our process to make it as easy as possible for people to take the next step, but we can’t pick up the phone for you… If the unthinkable happens, will your lack of planning make things harder on your family?

As always, we’re just a phone call away. If you’re unsure of what your next step should be, or even if you need a next step, we’d be happy to chat with you on the phone. We are passionate about helping families just like yours, and it is all we do everyday.

Season Tickets and Estate Planning: When Is It Time to Reevaluate?

The email from the University of Illinois said, “We still have not received your payment to renew your 2012-13 Men’s Basketball season tickets.” But that still didn’t change our decision.

I always had season tickets during college and most of law school. And after a bit of a break, started them again in 2003. But, as life unfolds, situations change and priorities change. Now with kids, 2 and 5, along with a busy law firm, plus trying to find time for my wife here and there, it just didn’t make sense to continue the tickets. As most of you may have noticed last year, we gave an awful lot of them away just because we couldn’t go to the games.

As life unfolds, we need or want different things. And, here comes the estate planning connection: as life unfolds, the type of estate plan you need may change. If you have an old will or trust, it might not fit you as well as it once did. Here are some things in life that should lead to a review of your plan:

  1. Inheritance
  2. Death of a spouse
  3. Changes in your health
  4. Marriage or divorce
  5. Children with marriage problems 

We are here anytime you need a review of your plan. Like I always say, “Estate planning is ALL we do ALL the time!” Give us a call at 217-726-9200 to set up an appointment.

Helping Our Kids to Be Prepared Never Ends

“No, I don’t want you to take me on my first day. I want to ride the bus!”

That wasn’t what my daughter said to me last week before going off to Kindergarten. That’s what I told my mom when I started Kindergarten back in the 70’s.

Bailey’s question was, “Daddy, what will we do in Kindergarten?”

She reached a big milestone last week when she started school just a few blocks from our house. It’s hard to believe she’s already old enough. As a parent, I want to prepare her for what’s ahead. But providing school supplies, a lunch box, new clothes, etc. was only part of getting her ready for what’s ahead. How do we get her ready to face new people and new challenges she’s never experienced before? One of the things Michelle and I did was tell her what we remembered from Kindergarten (all those years ago!) and tried to help her picture what to expect.

As parents, we do our best to prepare our kids for Kindergarten and other new life stages as they’re growing up. But how well have we prepared our kids to deal with our aging or death? Will our plan make it easier and less stressful for our family when the time comes? Or will it leave them feeling stressed, anxious and underprepared? The choice is yours to make, but you don’t have to create a plan on your own. Everyday we help people develop comprehensive estate plans that anticipate any issues that may come up. It’s all we do everyday. Give us a call at 217-726-9200 to set up an appointment, attend one of our FREE workshops or sign up for our weekly e-newsletter to learn more.

The Unique Planning Needs of Women

Women today have many unique situations that require special treatment when it comes to estate planning. Well, maybe not special treatment, but women need to take extra care that they are protected through good planning. Here are some examples:

Young mom stays home with the kids

Maybe she gave up a wonderful career to be a full-time mom; maybe she’s even a homeschooling mom. If something happens to her husband without good planning, she may be forced to go back to work and send the kids to full-time school/preschool. A will, a trust and plenty of life insurance will provide the protection she needs.

Newlywed helps put husband through medical school

She put her own education on hold to work full-time knowing that once he’s got the MD she can go back to school and do whatever she wants. But if her husband dies without a plan, she may be left without a breadwinner and without the education she planned to get. Add a baby to the mix, and you really have a stressful situation. The husband’s student loans die with him, but so does the income they had counted on for the future.

Homemaker left out in the cold

She never worked outside the home, but she took care of (pampered, really) her husband, 3 children and now 7 grandkids. If her husband dies without a plan, she may be left with a mortgage, a car loan, horrible job prospects and a tiny social security or monthly pension. Even if they did have plenty of money, she is left with the stress of trying to sort out all the financial details, which, for their 45 years of marriage, he had always taken care of with their accountant, financial advisor, etc. Now it’s dropped in her lap, and she doesn’t know the first place to start. It’s overwhelming.

Single, career woman

In her mid-50’s, she’s doing well for herself — saving for retirement and enjoying life. Suddenly she has a stroke. Without a plan, she has nothing in place to govern who will manage her money or care for her if she becomes disabled. The hospital social worker tries to contact her nephew in Texas, but she’s not seen him for 10 years, and he knows nothing of her situation or goals. She has friends who might be willing to help, but she’s never discussed it with them. And she never took legal steps to give them the power to help. Now a difficult situation goes from bad to worse.

2nd marriage

After getting divorced, she was single for 20 years while she raised 3 kids on her own. Now, at age 70, she’s met someone and married him. She sold her house and her furniture to move into his house. After a few very happy years, she’s shocked to find him dead of a heart attack. She’s even more shocked when his kids demand that she move out of the house and threaten legal action is she doesn’t. Now she is left with finding a new place to live, buying new furniture and trying to restart her life. He had promised to take care of her, but he never took the legal steps necessary to do that.

These stories are based on the real life stories of clients we help every day! And we would much rather help people on the front end of planning and avoid all the heartache that happens if planning isn’t done properly ahead of time. If you’re a woman concerned about your future, please call us at 217-726-9200 today or plan to attend an upcoming workshop. We’re here to help, and planning is ALL we do!

Flying to The Netherlands

For 10 days my family and I recently took a vacation to the Netherlands to visit my wife’s relatives (from a previous post you may recall that she is Dutch). We had some apprehension about flying 8 hours with our three children, ages 7, 4 and 2! Despite our fears, the flights were uneventful. We even got to jump to the front of the security check-point lines because we were traveling with children.

The time we spent in the Netherlands was wonderful. It was great to visit my wife’s Mom, sister, and extended family. Our children (especially the 7 year old) had a fun time pointing out all of the differences between the Netherlands and the United States. One of the differences that he liked the most was the fact that they have traffic lights just for bicycles.

As I prepared for our vacation, I thought of how flying on an airplane often motivates clients to prepare Wills and other estate planning documents. Of course, statistically speaking, you are much more likely to die in a car crash on the way home from work then you are in a plane crash (1 in 5,000 vs. 1 in 11,000,000)! So why does flying motivate people? Researchers in psychology have found that when we have control (like when we’re driving) we’re less afraid, and when we don’t have control (like when we’re flying) we’re more afraid.

Fear can motivate people to act, but it can also keep people from taking action. The estate planning process can seem like an intimidating process. By allowing David and I to walk you through the process, you are actually taking control of your future and the future of your loved ones. When you finish the process and have that control, the relief you feel will be immense. You will no longer have a fear of what happens when I die or become disabled. You will have a plan in place that achieves your goals and gives you true peace of mind.

Planning with Life Insurance

We often use life insurance as a tool in helping clients. Life insurance is important in many estate-planning situations, such as the following:

  1. A young family. To help raise the kids and get them through college if a young parent dies.
  2. Business owners. A buy-sell agreement between partners in a business is important. But the agreement may not work without some cash to pay off the owner’s family. Life insurance helps provide that cash.
  3. Blended families. In a 2nd marriage with a new baby? But the husband already has grown children? Life insurance allows him to leave funds to his older children at his death, but still provide for the new baby and his new wife.
  4. Estate taxes. For our clients who are concerned about estate tax, life insurance is almost always considered in reducing it. Why? Because it gives more leverage. For instance, you can give $13,000 to your child (without any gift tax liability). However, if you instead use the same funds through a life insurance trust, that money may buy $1 million or more in death benefits. Proper planning will use pennies on the dollar to transfer money to your family without estate taxes.

QUICK TIP: If you have an old life insurance policy, you should consider having your financial advisor review it. You can probably get a better policy now. (One with more death benefit and a lower premium.) Why? People are living longer than they were 10, 20 or 30 years ago. So, that makes life insurance cheaper.

WARNING: You may have heard that life insurance is tax-free. Life insurance benefits are free from INCOME TAX. However, they will be subject to ESTATE TAXES at your death. If you are concerned about estate taxes, then more life insurance will only make the problem worse. There are specific estate tax planning strategies that we can use to keep the life insurance out of your estate.

Need to have your plan reviewed? Do you know whether your plan has adequately considered life insurance options along with the legal strategies? Call us to set an appointment at 217-726-9200. We will send you our Personal Information Form to fill out and return prior to your meeting. At our first meeting, we will discuss your family’s situation, what planning options may be best, and what it would cost to develop a comprehensive plan.

Pre-nups, Not Just for Divorces Anymore

What does a pre-nup have to do with estate planning? Let me tell you. A pre-nuptial, or pre-marital agreement, outlines how a married couple will handle their assets. It covers more than what happens in a divorce. If we assume the couple will be happily married forever, here are still at least 2 situations that may need planning ahead:

  1. Who will pay the household expenses during the marriage?
  2. How will the assets be divided at death?

As an estate planning attorney, I am working on more and more pre-nups. Here is an example of a situation:

A couple, both in their 50’s, are planning to get married. One is a widow, the other is divorced. Both have accumulated some assets and are having success in their careers. Each of them has a couple of kids. How important is it that their assets end up with their kids, rather than the step-kids? Without planning ahead, it will be very easy for the assets to go to the wrong people. How? Suppose they buy a house or hold bank accounts in joint ownership. The family of whoever dies first will lose those assets, unless the survivor voluntarily shares it with the kids. (Read more about Asset Protection HERE.)

They can protect their wealth and their kids by signing a pre-nup, having an up-to-date trust or will, and paying close attention to asset titling (what we call the “funding” of an estate plan). Then they can have peace of mind while living “happily ever after.”

Who do you know that’s engaged? Particularly if it’s the second time down the aisle, it really is best for everyone to consider a pre-marital agreement. Plan ahead now, and avoid the stress and heartache for the family later.