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Essential Estate Planning Documents

As a recent poll shows, more than half of all Americans do not have a basic Will. While it is more likely that an individual over the age of 60 has a Will, many young families do not even have a simple estate plan in place. The following are common documents that should be included in any estate plan. Basic Will. A Will makes sure your assets and properties are passed on according to your wishes and allows an individual with children to name Guardians. In Illinois, a Will is a public document that is commonly filed with the Clerk of Court of the decedent’s county of residence. If an individual does not have a Will, the laws of the state will control distribution. To help avoid court proceedings known as probate, you may also consider a Declaration of Trust which is a private document and does not need to be filed with the Court. Durable Power of Attorney (POA). This document names a person as an “agent” to act on your behalf in case of disability. The document typically covers financial matters (e.g., banking, bill paying, etc.) and can be broadly drafted or be quite limited. Health Care Power of Attorney. The health care POA designates an individual to make important health care decisions on your behalf, when you are unable, due to a temporary or permanent disability. Individuals may also consider creating a Living Will that specifically directs end-of-life instructions. Beneficiary Designations. You should make sure appropriate beneficiaries are listed for all of your retirement accounts such as IRAs, 401(k), and life insurance policies. These assets go directly to named beneficiaries. If you do not have named beneficiaries, the assets will generally be distributed through your estate. Check older plans that may still name parents or ex-spouses that you may wish to update. (NOTE: When naming a minor, a guardianship proceeding may be required if the minor inherits.) An estate plan is much more than simply dividing your assets after death. As you encounter changes in family and finances, these documents can be modified. It is important to discuss these matters with your loved ones, and an attorney can help answer questions that you may have as well as advise you on the best plan for your situation. Creating an initial estate plan can be an emotional process, yet the peace of mind of knowing that you have a plan in place can be reassuring.   If you have any questions about preparing an estate planning, please feel free to contact Trostin, Kantor & Esposito LLC at 224-529-0500.   Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein. No one should rely upon the information contained herein as constituting legal advice. The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader’s facts and circumstances. What is a will? A simple will is a legal document that states who will inherit your assets and belongings after you pass away. A will is also sometimes called a last will and testament, and the person creating the will is called the testator. What is a power of attorney? A general power of attorney grants broad powers to an agent. Essentially, the agent has the same authority as you have to make decisions, handle your financial affairs and manage your assets. What is a power of attorney for health care? A person uses a durable medical power of attorney to appoint one or more people to serve as advocates or “healthcare agents” empowered to make medical treatment decisions on behalf of that person if the person is incapacitated and cannot communicate with medical personnel.

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Abbott & AbbVie Dividend Subtraction

As you begin to gather your tax documents, you may want to look closer at your dividends for the year. If you are an Illinois resident, you may be permitted to subtract certain dividends from specific Illinois companies. Under Illinois law, dividends you receive from a corporation that conducts business in a foreign trade zone and is designated a “High Impact Business” are eligible for the subtraction modification from Illinois base income.   Over the past few years, I have worked with a number of clients who received dividends from companies that qualify for dividend subtraction in Illinois.  Depending on the total dividend distribution, this subtraction can be a sizable reduction in Illinois State Income Taxes, especially for shareholders who may have received stock through their employment with the companies.   Currently, the following 4 companies have published letters in the past to their shareholders notifying them of the potential dividend subtraction for Illinois in the past. Below are the most current letters online.   Abbott Laboratories (Tax year 2022 letter)   AbbVie Inc. (Tax year 2022 letter)   Caterpillar Inc (Tax year 2021 letter)   Walgreens Boots Alliance, Inc. (Tax year 2020 letter)   There may be other qualifying companies in Illinois although it is best to receive a letter from the company if you decide to utilize the dividend subtraction on your income tax return.  If you believe you have received dividends from a qualifying company in the past 3 years, you may want to determine if filing an amended Illinois Income Tax Return is worthwhile.   If you have any questions about tax and estate planning, please feel free to contact Trostin, Kantor & Esposito, LLC at (224) 529-0500.   Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice.  Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein.  No one should rely upon the information contained herein as constituting legal advice.  The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader’s facts and circumstances.

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