Planning for a $1 Million Estate in Illinois

How Should You Plan a $1 Million Estate in Illinois?

A million-dollar estate sounds like a lot of money. But for many Illinois families, reaching $1 million happens without ever feeling “wealthy.”

Add up a $500,000 home, retirement accounts, savings, investments and life insurance, and suddenly a family that considers itself comfortably middle or upper-middle class may have an estate worth $1 million or more. And that family still needs an estate plan.

Meet Mike and Sarah

Imagine Mike and Sarah are in their 40s and live in the Frankfort.

They have two children, a home worth $550,000, approximately $350,000 in retirement accounts and another $100,000 between savings and investments. Their net worth is approximately $1 million. They don’t think of themselves as wealthy. So estate planning keeps getting pushed down the list.

Then Sarah asks a simple question:

“What actually happens if something happens to both of us?”

That’s when estate planning becomes much less about money—and much more about their children.

At $1 Million, Estate Planning Is Usually Not About Estate Taxes

Under current Illinois law, the Illinois estate tax exclusion is $4 million. At approximately $1 million, Mike and Sarah’s primary concern generally isn’t estate tax.

Their bigger concerns are practical: Who would raise their children? Who would manage the children’s inheritance? Would the children receive an inheritance outright when they turn 18?

Would their family have to go through probate? Who could manage their finances if one of them became incapacitated? Who could make healthcare decisions? And would anyone know what assets they owned and where to find them? We don’t want to leave our kids with a mess. A good estate plan answers those questions before a crisis occurs.

A Will May Be Important but It May Not Be the Entire Plan

For parents of minor children, one of the most important functions of a Will is nominating guardians. But a Will doesn’t necessarily keep your family out of public probate court.

That’s one reason many Illinois families choose to use a revocable living trust as the centerpiece of their estate plan. Assets properly titled to a trust can generally be administered according to the trust’s instructions avoiding probate court for your family.

The trust can also say much more than simply, “Give everything to my children.”

For example, parents might provide that the trustee can use money for a child’s health, education and support while the child is young, with distributions occurring later at ages the parents select. That can be very different from leaving a large inheritance outright to an 18-year-old.

Your Estate Plan Is Also for You

Estate planning isn’t only about death. If Mike becomes seriously ill or injured, who can access financial accounts, deal with insurance, sign documents or handle other financial matters?

If Sarah cannot make medical decisions, who has legal authority to speak for her? That’s why a comprehensive estate plan often includes powers of attorney for property and healthcare and other incapacity-planning documents in addition to a Will or trust.

The $1 Million Planning Question

At this level, the question usually isn’t:

“How do I avoid estate tax?”

It’s:

“If something happens to me, will the people I love know exactly what to do or will they be left with a stressful, expensive mess?”

For a family with a home, retirement savings and children, a thoughtful estate plan can make things so much easier on your loved ones. You don’t need to consider yourself wealthy to need one. You simply need people and property worth protecting. Click here to schedule your private consultation today and get this checked off your list: https://markettilawfirm.cliogrow.com/book/251f4271d78bb0d2a5995810a5877e0f

This article is for general educational purposes and is not legal or tax advice. Estate planning depends on your particular assets, family circumstances and goals.