After years of focusing my legal career on estate planning and meeting with hundreds of estate planning clients, I have broken down Six different Levels of Estate Planning. Four out of the Six Levels of estate planning will most likely fail -- I explain why below:
Level 1 – You Have No Estate Planning Done.
A basic Estate Plan will consist of 1) a Will; 2) Power of Attorney for Property; and 3) Power of Attorney for Healthcare. In addition to those documents some people will also have a Trust as part of their Estate Plan. For those that have not signed their own estate planning documents they are relying on the “Illinois Estate Plan”. Illinois has laws in place that says who inherits your Assets when you die. Sometimes this is OK – but many times it is not. The Illinois court system will also have to decide who will make medical decisions for you, who will take care of your assets, and who will take care of your minor children if you become mentally incapacitated.
Level 2 – You Have Outdated Estate Planning (“EP”) Documents.
You signed a Will and possibly a Trust 5,10, or 20+ years ago years ago. You haven’t looked at these documents since they were signed and you don’t remember who you named as your Executors, Trustees or Power of Attorney Agents. Those people might be dead or you wouldn’t want them making those decisions for you anymore. Your assets have grown substantially in the last 20 years. Major life events such as getting married, divorced, having children or someone passing away has made your old plan obsolete. Many times old/outdated Estate Plan Documents are just as bad (if not worse) than having no EP documents at all.
Level 3 – You Have Recent EP Documents . . . But You Don’t Understand What Those Documents Say.
You have signed your Estate Plan Documents recently but you don’t really understand how estate planning works or how those documents help you. You are blindly trusting the attorney that prepared your Will for you or you filled in the blanks of a form that you found online and signed it just so you can say you “Have a Will”. You honestly don’t know if this estate plan will work for you or not.
Level 4 – You Have Updated EP Documents That You Understand . . . . But Your Assets are Disorganized.
You have a Will or Trust that is not outdated. You (think) you understand what your EP Documents say and how your Assets will be distributed upon your death; however, no inventory of your Assets (including whether beneficiary designations are correctly completed) was ever done. You happen to have a perfectly drafted Will or Trust – but what you don’t realize is that most of the assets of your estate have beneficiary designations that will supersede your Will or Trust and direct where the majority of your estate assets will go. You don't understand that if you have a Trust - you must take the extra step to transfer assets into your Trust for your Plan to work.
Level 5 – You Have Updated EP Documents that you Understand AND your Assets Are Organized.
You have a Will or Trust that is not outdated. You actually understand what your EP Documents say and how your Assets will be distributed. Your assets have been reviewed, analyzed, organized and updated so that beneficiary designations are working WITH and not AGAINST your Estate Plan. You review your Estate Plan and Assets on an annual basis to make sure it remains updated. Estate Planning Success
Level 6 – You Have Updated EP Documents that you Understand AND Your Assets Are Organized AND You Have Told Your Legacy Story.
You have achieved Level 5 Estate Planning Status. Your assets are set to benefit your family, friends and causes that you care about in the best possible way. Your POA agents, Executors, Trustees and Children's Guardians are updated and in place. No matter how large are small your estate – many times the most important thing you can pass on to your loved ones are your life stories, your values and your family history. With a Level Six Estate Plan you not only have properly planned for the Assets of your Estate but you have also preserved your Legacy Stories– which is priceless. Estate Planning Success
At the Ritchie Law Office, Ltd. we only work with clients that want Level 5 and Level 6 Estate plans
At RLO we recognize the fact that an estate plan is not just documents you that sign. We recognize the pitfalls of estate planning that you see in Levels 1-4. At RLO we have developed a process that involves educating our clients, properly evaluating their Estate Assets and Family needs and continuing a relationship with them to make sure their Plans stay up to date. We know what it takes for our clients to have a Level 5 or Level 6 Estate Plan. We are constantly improving our Estate Planning Process and Systems. Here are two new features we are implementing in 2020 to help our clients achieve Level 5 and Level 6 Estate Plans:
New IN 2020 – RLO CLIENT CARE PROGRAM:
We have designed an Estate Planning Client Maintenance Program that we call “RLO CARE”. All RLO Estate Planning Clients will be eligible to join and become members of this program. More information coming soon!
New In 2020 – RLO Legacy:
RLO Clients will now have the opportunity to record their life stories, values and family histories as part of our estate planning
process. More information coming soon!
This article is a service of Attorney Chad A. Ritchie and the Ritchie Law Office, Ltd. Click Here or call (309) 662-7000 to learn more about what it’s like to meet with the Ritchie Law Office, Ltd. for your initial estate planning meeting. We call this initial Estate Planning meeting a “Ritchie Legacy Planning Session”.
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