Chicago, IL- May 24, 2012 - Estate planning is not only for the wealthy, but it is often a topic people avoid thinking about. However, the Better Business Bureau serving Chicago and Northern Illinois (BBB) advises consumers who own items of value, which they want passed on to family or loved ones, to create an estate plan.
“Wills and trusts are documents that individuals can use to make sure their wishes are met,” said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. “While no one enjoys thinking about their death, it’s important to create an estate plan so that assets go to the people you want and your successors are taken care of appropriately.”
Some main reasons for not having an estate plan such as a will or trust, according to Bernas, include not wanting to think about death, not knowing where to start or who to talk to about setting up an estate plan, and not believing one has enough assets to require one.
An estate plan can be as simple as drafting a will or as complex as setting up a trust and a living will. The BBB offers the following guidance on the basic components of an estate plan and advice on choosing what is necessary for different situations.
- Will: At the very least, anyone who has possessions or property to pass on to specific individuals should create a will. A will can allocate assets as well as establish guardianship of children. Most wills have to go through probate after the individual’s death. In probate, a court oversees the payment of any debts and distributes inheritances—the process can last several months.
- Living Trust: A trust is a tool for anyone who would like to set conditions on how and when their assets are distributed. A trust can also help reduce the amount of taxes paid on the inheritance and does not have to go through probate, unlike a will. An example of a reason for creating a trust includes wanting to give a child their inheritance over time, rather than in a lump sum, and restricting how the money can be spent.
- Living Will: A living will provides a way for an individual to communicate in advance their desire for life-saving measures in case they are incapacitated. In addition to a living will, individuals can also assign medical power of attorney to someone they trust who can further ensure that their wishes are fulfilled.
For simple estates, many Web sites offer an inexpensive do-it-yourself approach to creating a will. For more involved estates, it’s best to enlist the help of a lawyer. The BBB advises first researching any estate planning companies or lawyers at www.bbb.org before paying for assistance.
After creating an estate plan, the BBB recommends communicating the terms of the plan with the family members and loved ones it impacts. An estate plan needs to be revised every time the individual moves, changes marital status or is affected by major financial changes, such as investments or buying or selling a business. An estate plan will also need to be reviewed if anyone the estate plan affects undergoes major life changes such as marriage or death.
For more advice you can trust from the BBB on managing personal finances visit www.bbb.org or www.facebook.com/bbbchicago
As a private, non-profit organization, the purpose of the Better Business Bureau is to promote an ethical marketplace. BBBs help resolve buyer/seller complaints by means of conciliation, mediation and arbitration. BBBs also review advertising claims, online business practices and charitable organizations. BBBs develop and issue reports on businesses and nonprofit organizations and encourage people to check out a company or charity before making a purchase or donation.