LEARNING FROM THE CLEBRITIES: HOW IMPORTANT ESTATE PLANNING IS FOR ALL

Posted on July 30, 2012 by admin

Tom Cruise and Katy Holmes’ most recent divorce has been the spark of many conversations and television time. The celebrity divorce has left many wondering how much money is to be handed over in the settlement. While more and more celebrity couples have lost numerous amounts and many estates, recent posts have been disclosed stating that the actress won’t gain much from the terminated marriage. While the celebrities have means to generate more income, it is important to stress the importance of the prenuptial agreement.

A prenuptial agreement, which can also be an estate planning tool, is a written contract between two people prior to entering marriage or a civil union. The contract states the terms of possession of assets, division of property, spousal support, and conditions of guardianship in the event of divorce or breakup of marriage.

At Sivia Business & Legal Service P.C we specialize our practice in keeping your assets safe. With the number of individuals who divorce and remarry continuously increasing, the lack of a prenuptial agreement may undermine existing individual’s estate plans. Even children from a previous marriages may benefit by the signing of a prenuptial agreement ensuring that the new spouses’ property rights do not infringe on their own. We here at SBLS want to help protect your assets and continue growing your wealth.

Sivia Business & Legal Services, P.C. is an asset protection law firm and mainly focusing on general business law, real estate, estate planning, probate, and elder law. Sivia Business & Legal Services, P.C. is committed to quality legal representation at affordable prices.  The law firm is located at 217 South Main St., Edwardsville, IL 62025.  Also, view the website at www.sivialaw.com.

For more information regarding prenuptial agreements or estate planning, please contact Sivia Business & Legal Services, P.C. at (618) 659-4499 or info@sivialaw.com

Posted in Uncategorized | Comments Off

5 Reasons You Need an Estate Plan

Posted on April 10, 2012 by admin
  1. Avoiding Probate
    Avoiding probate is by far the most common reason why people seek out the advice of an estate planning attorney. While many have never even dealt with probate, they still know one thing – they want to avoid it at all costs. This stems from probate horror stories covered by the media or told by neighbors, friends or business associates. Suffice it to say that for the vast majority of people, avoiding probate is a very good reason for creating an estate plan and can be easily achieved.
  2. Reducing Estate Taxes
    The significant loss of one’s estate to the payment of state and/or federal estate taxes or state inheritance taxes is a great motivator for many people to put an estate plan together. Through the most basic planning, married couples can reduce or even possibly eliminate estate taxes altogether by setting up AB Trusts or ABC Trusts as part of their wills or revocable living trusts. In addition, a variety of advanced estate planning techniques can be used by both married couples and individuals to make the estate or inheritance tax bill less burdensome or completely go away.
  3. Avoiding a Mess
    Many clients seek the advice of an estate planning attorney after personally experiencing, or seeing a close friend or business associate experience, a significant waste of time and money due to a loved one’s failure to make an estate plan. Choosing someone to be in charge if you become mentally incapacitated and after you die and deciding who will get what, when they will get it, and how they will get it after you’re gone will go a long way towards avoiding family fights and costly court proceedings.
  4. Protecting Beneficiaries
    There are generally two main reasons why people put together an estate plan in order to protect their beneficiaries: (a) Protecting minor beneficiaries, and/or (b) Protecting adult beneficiaries from bad decisions, outside influences, creditor problems and divorcing spouses. If the beneficiary is a minor, all 50 states have laws that require a guardian or conservator to be appointed to oversee the minor’s needs and finances until the minor becomes a legal adult (at age 18 or 21, depending upon the laws of the state where the minor lives). You can prevent family discord and costly legal expenses by taking the time to designate a guardian and trustee for your minor beneficiaries. Or, if the beneficiary is already an adult but is bad at managing money or has an overbearing spouse or partner who you fear will squander the beneficiary’s inheritance or take it in a divorce, then you can create an estate plan that will protect the beneficiary from their own bad decisions as well as those of others.
  5. Protecting Assets from Unforeseen Creditors
    Lately asset protection planning has become a very important reason why many people, including those who already have an estate plan, are meeting with their estate planning attorney. Once you know or even just suspect that a lawsuit is on the horizon, it’s too late to put a plan in place to protect your assets. Instead, you need to start with a sound financial plan and couple that with a comprehensive estate plan that will in turn protect your assets for the benefit of both you during your lifetime and your beneficiaries after your death. You can also provide asset protection for your spouse through the use of AB Trusts or ABC Trusts and your other beneficiaries through the use of lifetime trusts.
Posted in Estate Planning, Interesting Legal Knowledge, Uncategorized | Comments Off

When Should I Create a Medical Power of Attorney?

Posted on March 20, 2012 by admin

It is important to understand what a medical power of attorney is and to create one before the need to use it arises. This article will discuss prudent estate planning measures concerning the medical power of attorney document.

When is the Best Time to Plan Power of Attorney Documents?

If you plan to meet with an estate planning professional or attorney, you can handle all the powers of attorney documents at the same time. You can obtain both a medical power of attorney (for medical decisions) and a general power of attorney (for financial decisions) in the event you become incapacitated so you can ensure that you have an appropriate, authorized legal representative to manage your affairs during this time, even for a long-term disability. Your representative will be able to manage your bank account, stocks and securities, process checks or payments and also make payments on your behalf.

With regard to long term medical disability, a court may appoint a “conservator” to handle medical decisions if you have not chosen a representative in a medical power of attorney. You should be aware that a court might appoint a private professional as your conservator who may charge hourly fees that would be paid out of the assets of your estate. In other instances, a court might choose a relative that, from your years of personal experience with this person, might not be the most unbiased and trustworthy amongst your blood relations. Leaving a court to choose who will make the most important decisions can frequently lead to the appointment of someone who would not have been your first choice. As you can see, planning in advance of your elder years is crucial to the proper management of your estate.

Estate Planning: Online or In Person?

While many people seek to obtain help and information online, important matters such as estate planning might be best accomplished with the assistance of an estate planning professional who is familiar with current laws and can ask questions about your specific situation. An attorney can draft an estate plan that is specifically tailored for you and advise you on the options you may have with regard to important estate issues. For the most part, online estate planning is best used when you have a simple estate or feel strongly about not wanting to use an estate planning professional.

If you do not wish to utilize an attorney to draft an estate plan, you can almost always obtain free medical power of attorney forms, which have already been reviewed for legality in your state, from your local hospital. All you need to do is ask. Hospitals offer these forms because it can save them a great deal of difficulty if people obtain these authorizations when they are healthy and competent. By giving you the forms in advance, it becomes unnecessary to have one of their administrators guide family members through the process of petitioning a court for the appointment of a guardian or conservator, and dealing with the associated delays. Once an elderly patient is admitted to the hospital, it is often too late to avoid the complications that arise as a result of having nobody appointed to make medical decisions.

What is a Durable Power of Attorney?

It is important to note that a power of attorney issued for the purpose of managing your assets in the event of disability is frequently created as unlimited in duration. It is also commonly referred to as a “durable” power of attorney. Many financial institutions are reluctant to accept or rely upon powers of attorney which expire after a specific date and some will refuse to accept them. If you are interested in limiting the duration of a power of attorney which takes effect in the event of disability, it makes sense to check with an attorney in your state to see what effect such a limit may have. In addition, you may wish to limit any power of attorney of this type, so that it expressly recognizes your right to participate in medical and financial decisions to the extent that you are able.

Living Will and Power of Attorney Forms

In addition to being able to get Power of Attorney forms from your local hospital, you can also obtain these forms online. It is certainly better to have an executed living will and medical power of attorney than to have none. While you can get these documents for free or at a modest cost, it is not a substitute for prudent estate planning with trusts and estates attorney.

Posted in Estate Planning | Comments Off

Tenant in The Cold

Posted on January 19, 2012 by admin

In accordance with Illinois public policy, no person should be denied essential utility service during the winter months due to financial inability to pay. Under Illinois law, public utility companies and residential heating customers must deal with each other in good faith and fair manner.

Gas or electric service providing the primary source of heat may not be shut off on any day that the National Weather Service forecasts that the temperature will be 32 degrees or below, or on any day preceding a weekend or holiday, where the weather Service forecasts 32 degrees or below during the holiday or weekend.

From December 1 through March 31, gas or electric service providing the primary source of heat may not be disconnected at any residence for non-payment of a bill or deposit unless the utility enters a certain type of agreement with a customer subject to several requirements.

A customer may demonstrate to the utility that she does not have the financial ability to pay 1/3 of the amount past due and the deposit and may be reinstated upon a payment of a “reasonable amount.” (typically 20% of the amount past due and 20% of the deposit).

Prior to October 1 of the year, utilities that provide the primary heating service to a residence must notify customers whose service has been disconnected due to nonpayment of a bill from the previous December until September 15, how they can have service restored.

The Illinois Commerce Commission adopted a resolution, urging local utilities to impose a moratorium on disconnections during the winter for certain eligible persons, and proposed more favorable winter reconnection rules for certain eligible persons. If you are a tenant in need of legal assistance in these or any tenant issues, please call or email our office.

Posted in Landlorad/Tenant, Uncategorized | Comments Off

Differences Between Revocable or Irrevocable

Posted on November 19, 2010 by admin

The primary difference between a Revocable and Irrevocable Trust is flexibility. Revocable means you can make changes to your trust. Irrevocable means that once it is created the terms are final and you cannot alter fiduciaries or beneficiaries.

What Revocable Does

A Revocable Living Trust is a common estate planning document that can help property to easily pass from a decedent to his or her beneficiaries. Because a Revocable Living Trust allows you to make changes as you need, you can alter your Trust throughout your life. You can fund new property or assets into it, change your beneficiaries or even name a new successor trustee.

There are three common reasons to use a Trust. First, a well executed and fully funded Trust can help your estate avoid probate. Second, you can use your Living Trust as part of a disability plan. If you should become mentally incapacitated, your successor trustee would step forward and manage your Trust assets for you. Many people also use a Trust for privacy. A Last Will and Testament is a public legal document. After your death, anyone can obtain a record of your holdings. With a Trust, your estate assets and beneficiaries are kept private.

One problem with a Revocable Trust is that you cannot use it for asset protection. The assets within are still considered yours.

What Irrevocable Does

An Irrevocable Trust is one you cannot change after it is created.  This type of trust is common for asset protection. Once you transfer items into the Trust, they no longer belong to you and cannot be used to settle a debt or lawsuit. Irrevocable trusts are also a great way to minimize estate and income taxes. Because the assets in such a trust do not belong to you, they will not be included in your estate’s tax liability. A charitable irrevocable trust allows you to donate to a cause of your choice upon your death and receive an income tax deduction for the year that you place funds within the Trust.

When Revocable Becomes Irrevocable

If you have a Revocable Living Trust, it will become Irrevocable upon your death. Your living trust can break apart into several irrevocable lifetime trusts for the benefit of your spouse, children and grandchildren or other beneficiaries.

Posted in Estate Planning | Leave a comment

When You Should Change Your Estate Plan

Posted on November 17, 2010 by admin

When life changes, it is time to change your Last Will and Testament. If you don’t change your Will at the proper time, some loved ones may not receive an inheritance, your Will may become invalid, or your estate may be affected by taxes.

You should review your estate plan every one or two years and you should make changes anytime any of the following situations arise:

Marriage or Divorce

When you get married, it is important to include your spouse in your Will. If you have a Will and don’t include your spouse, then he or she may be disinherited. Also, if you get divorced, updating your will and estate plan allows you to reposition your bequests to your intended beneficiaries.

Moving

Are you planning an out-of-state move, or have you just arrived in this state? If so, it is time to review your estate plan and find out how your new state’s laws will affect your Will. If you pass away with a Last Will and Testament that does not meet state laws, your Will may be deemed invalid and your estate could be settled based upon intestacy laws rather than your final wishes.

New or Deceased Beneficiaries

When you bring a new loved one into your family, don’t forget to include him or her in your Will. You should also update your Will anytime a beneficiary passes away. If you don’t, there could be confusion during probate.

Buying or Selling Property

Any change in property should be noted in your Will. Every time you sell a piece of property, you should remove it from your Will and reallocate bequests among your beneficiaries. You should also make certain to include new property in your Will as soon as possible. If you pass away without a piece of property listed, your loved ones may face issues in probate as the heir of that property is determined by the probate court.

As your assets fluctuate throughout your life, your net worth may also. Every time you review your Will, estimate your Net Worth. Once your estate holdings reach the estate tax exemption level it may be time for a more in-depth version of planning that allows for estate tax relief and asset protection.

Posted in Estate Planning | Leave a comment

Incapacity Arrangements

Posted on November 15, 2010 by admin

If you have not included an incapacity arrangement in your estate plan you should do so immediately. Every person needs an incapacity plan to care for their financial assets and medical needs in the event of a mental disability or major physical ailment.

Advance Health Care Directive

An Advance Health Care Directive allows you to plan for your medical needs if you become disabled. This document allows you to name the person(s) you wish to make medical decisions for you if you can’t make them for yourself.  It also allows you to state your wishes regarding life support and organ donations.

Financial Power of Attorney

If you should become disabled, someone must be available to manage your finances. A financial power of attorney (POA) allows you to name an agent to sign documents on your behalf, use your funds and income to pay bills, manage your personal and retirement accounts, and invest your accounts for extra income. With the help of your attorney, you can tailor your POA to fit your financial needs.

When you create a POA, you can choose between an Immediate and a Springing POA. An Immediate POA allows your financial attorney-in-fact to assist with your assets immediately. With a Springing POA, your attorney- in-fact can only manage your affairs after you become incapacitated.

Revocable Living Trust

A Revocable Living Trust has many benefits including the fact that it can be used for incapacity planning. Every asset that you fund into your Trust can be handled by your successor trustee during your time of disability.

Posted in Estate Planning | Leave a comment

Estate tax to resume with new year

Posted on November 15, 2010 by admin

Efforts under way to prevent 55 percent jump

November 13, 2010 6:16 PM

Without Congress’ intervention, the federal estate tax will return in full force next year with a top rate of 55 percent on taxable estates valued at more than $1 million.

In 2001, President George W. Bush signed major reform legislation that reduced estate taxes over eight years, until by 2009 estates worth more than $3.5 million ($7 million for married couples) were taxed at 45 percent. Then in 2010, the law repealed the tax entirely. But the legislation expires in 2011, sending estate taxes back to their 2001 levels.

U.S. Rep. John Shimkus, R-Collinsville, sees the estate tax as triple taxation on his constituents, some who have family farms or small businesses.

“The taxpayer paid tax when the income was earned, paid tax again on dividends or interest when that after-tax income was later invested and then the estate has to pay tax on the assets purchased with that previously taxed income before those assets can be passed on to the taxpayer’s heirs,” Shimkus said.

Attorney Todd Sivia, who owns Sivia Business & Legal Services, P.C., and does considerable estate planning, views the possible change in estate tax in the coming year as the biggest tax increase in U.S. history.

“Right now, there is no estate tax. In 2001, when they created what were called the Bush tax cuts, the intention was to eliminate the estate tax,” he said. “If you look at estate tax, every time it is created it is to create revenue for the government. If Congress doesn’t do anything by the end of the year, it goes up automatically.”

Sivia said $1 million in an estate today is much different than it was in 2001. He said people who would feel the estate tax increase the most are small business owners and farmers.

“In a hypothetical situation, let’s say a farmer bought land in the 1960s for $20,000 or $30,000 and now the property is worth $3 to $5 million. If it is $3 million, that is over $1 million in taxes the heirs have to come up with upon the death. They would either have to sell or something would happen to the farm.”

Sivia recommended that people consider a revocable living trust where you can put land into a corporation and work with asset allocations to get in the best position for paying taxes.

“We want to leave money for our children and for charities,” he said. “We all have where we want to leave our money, but if the IRS (Internal Revenue Service) is taking half our money, that is huge. My passion is to protect people’s assets and look at any way of keeping the assets with my clients, whether it is a small business owner or individual.”

Sivia said about 25 percent of his law practice is estate planning.

“I don’t believe the estate tax changes that will happen are fair,” he said. “Those who have worked for their money should not have to pay at a rate of 55 percent. The $1 million figure impacts most Americans. You hear a lot about taxing the top 1 percent or 10 percent of the American population, but with this, you are taxing Main Street. You are taxing the individuals who have businesses, small businesses and have worked hard to build up their businesses.”

One point Sivia made is that every time there is a war, the estate tax comes back with a vengeance.

“In 1797 when we first established the estate tax, we used it to arm our Navy and the second time we established it was in 1862 during the Civil War. It was abolished in 1870 and in 1898 it funded the Spanish-American War and was abolished in 1902. It came back in 1916 during World War I and has continued since then.”

If Americans are lucky, Congress will do something to prevent the estate tax from going back to the pre-2001 date, Sivia said.

“It’s very serious,” he said. “If nothing is done by January, I’m not optimistic about an estate tax reversal until at least 2012.”

Shimkus said he thinks people are starting to wake up on their view of government and how it should operate.

“I am hopeful for a one-year extension of the Bush tax cuts,” he said. “How many times do we tax the same income? If the death tax goes through back to the pre-Bush tax levels, it would be devastating.”

U.S. Rep. Jerry Costello, D-Belleville, said he prefers a specific approach to the tax situation.

“I continue to support extending the tax cuts targeted at the middle class and permanently repealing the estate tax,” he said in an e-mail response to a question from The Telegraph. “Discussing how to proceed on these issues will be our first order of business as Congress reconvenes next week.”

dbrannan@thetelegraph.com

Posted in Estate Planning, Taxes | Leave a comment

Subletting Restrictions on Leases

Posted on November 12, 2010 by admin

When a tenant decides to move before a lease has expired, he or she may find subletting a feasible option to conserve as much rent money as possible. How should a landlord respond to a tenant’s request to sublet?
The first place to look for the answer is the lease document. The lease may be silent on the issue and prevent subletting without the landlord’s consent. Or, it might require consent but provide that the landlord’s consent may not be unreasonably withheld. It might even say that the landlord’s consent may not be “unreasonably withheld, delayed or conditioned.”
In the absence of an express restriction in a lease prohibiting an assignment, a tenant has the right to freely sublease or assign and may even assign or sublease without notifying the landlord. Consequently, at a minimum, landlords should always include a provision in the form lease requiring tenants to notify them of an assignment or sublease so they know the identities of their new tenants.
Under Illinois law, when a lease requires consent to allow the tenant to sublease, the landlord cannot unreasonably withhold it. Many landlords mistakenly believe that the absence of the phrase “not to be unreasonably withheld” from the assignment / sublease provision gives them the right to withhold consent in their sole discretion. Under Illinois law, that is not the case because the standard of reasonableness is required without an explicit statement of the requirement in the lease.
If a landlord acts unreasonably and doesn’t consent to an assignment or sublease when it should, the landlord risks a judgment for damages in favor of the tenant.
Landlords should understand that the reasonableness requirement exists under Illinois law and act accordingly when faced with requests for subletting consent. For assistance with landlord-tenant matters or lease concerns, please call or email our office today.

Posted in Landlorad/Tenant, Your Business | Leave a comment

Saving Money on Estate Taxes

Posted on November 12, 2010 by admin

Passing on the wealth you’ve accumulated over the years to your heirs isn’t always as easy as it seems. With the $1,000,000 estate tax exemption scheduled to come back in 2011, a much larger group of people will be paying inheritance taxes in the coming years. Fortunately, smart estate planning can help at least minimize those taxes so that the bulk of your estate goes to your heirs and not Uncle Sam.

  • The Gift Tax exclusion is an important exemption that you don’t want to overlook. This allows you to gift money up to a certain amount each year, without any tax consequences. The important thing to remember is that you cannot carry it over to the next year so it is necessary to use it within the same year, or you will lose it. Under the law, you can gift up to $13,000 to the same individual each year in addition to a lifetime exclusion of $1,000,000.  This $1,000,000 lifetime gift  reduces the amount you can leave at death;  the $13,000 annual gifts are in addition to this. In addition, gifts to spouses (if a US citizen) and those made directly to a  medical provider or school are exempt as well. So, unless you have a very large estate, you could theoretically pass the majority of your estate to your heirs tax free.
  • Because funeral expenses can be used as a tax deduction for the estate, this can lower the total amount of taxes that your loved ones will have to pay. So will a gift to charity.
  • The portion of an estate that is left to a surviving spouse is also exempt from taxes, as long as the spouse is a citizen of the United States, and no other party has an interest in the property or assets being inherited by the spouse.

The bottom line – consulting with an estate planning attorney can ultimately save you and your loved ones money in the long run.

Posted in Uncategorized | Leave a comment