When you start the process of comprehensive estate planning, keep in mind that there are implications for family members in states other than Illinois. The estate planning attorney you work with should be aware of this situation so specific action is taken.
A qualified estate planning attorney will certainly ask about your heirs, including their home addresses, and you should focus on that. Other states may treat inheritances differently according to their own laws. Your estate planning attorney can describe what will happen for each of your heirs.
Why It Matters More When Heirs Live Elsewhere
The most common estate documents are a will, trust, power of attorney, and healthcare directive. In the absence of these documents, the State of Illinois decides who receives your assets according to state law.
The process of settling an estate can become complicated when heirs live in other states. Likewise, if you own property in another state, it’s likely that state will require an ancillary probate process to ensure that ownership of the property passes appropriately. These circumstances also involve more complex taxation and additional responsibilities for estate trustees and executors. It’s likely to take more time as well, delaying your heirs’ receipt of any benefits.
To facilitate a quick and efficient estate settlement process, take these steps:
- Make sure that key people know how to find your essential documents, including your will, trust documents, healthcare directive, and power of attorney.
- Choose your personal representative carefully. As executor of your estate, they should be over age 18 and a U.S. resident. The local probate court must confirm your selection, and an executor may be subject to additional requirements. If your first choice lives outside of Illinois or outside of the country, they should be able to handle all of the necessary responsibilities, such as maintaining probate deadlines, paying debts, and distributing assets.
- Powers of attorney and healthcare agents are those you name to handle your affairs if you become incapacitated before you die. If they live out of state you should consult with your attorney to make sure they are valid choices. Also, communicate with these designated representatives so they understand the roles you are asking them to play.
- Discuss your estate value and associated taxes with your attorney. Illinois has a $4 million tax exemption for estates, which means that those valued above $4 million pay Illinois estate tax. If your heirs live in other states, receiving an inheritance might trigger state inheritance taxes where they live. Your attorney can show ways to avoid that outcome. If your estate is valued at $150,000 or less and does not include real estate, Illinois has an expedited process that shortens the probate period and associated costs.
- Minimize probate with trusts. A revocable living trust is a tool that allows you to continue accessing your assets and property while you are alive but passes them to your heirs upon your death without significant intervention of probate. This can make the process easier on heirs who live out of state as well.
- Communicate with your heirs. Call a virtual family meeting to explain to family members the choices you have made and the process you expect to be followed. Reducing any disagreements among heirs is critical. Some experts say to follow up with a letter that instructs your executor and heirs on your estate plan so there are no surprises.
- Set a date to review. It’s critical to keep your estate documents up to date. Families change through divorce, marriage, and births. Review your documents periodically to make sure that the information is current.
Get Advice and Take Action for Your Heirs
Discussing an estate plan with a qualified attorney from Legacy & Life Law Firm is a first step to ensuring that your heirs receive the benefit of your hard work and savings. Streamlining the process for them through a comprehensive estate plan will reduce stress and convey your final wishes the way you choose. Contact Legacy & Life for a consultation.