Estate Planning and Your Digital Assets

Over the past twenty years, as access to the internet has increased, our digital footprint has exponentially expanded.  Whereas previously we may have had an email account and a few logins to online retailers, we now have multiple email and social media accounts, our banking and utility bills are almost all paperless, and we have subscriptions to websites for shopping, news and much more.

The question is how do we access these various assets to stop auto-billing, obtain important information and correspondence if the user is disabled or deceased?  This has become a larger and larger problem for administrators of estates as they attempt to collect assets and information.  

One option is to keep a spreadsheet with the logins and passwords of all of your accounts.  This can be quite tedious with passwords always changing, and a challenge keeping this information private.  The other option is the ability to authorize a fiduciary to access these records through your estate planning documents.  

In 2015, Illinois passed the Revised Uniform Fiduciary Access to Digital Assets Act 755 ILCS 70.  That allows an individual with digital assets to authorize a designated recipient to access the user's digital assets, or instruct the entity to not disclose some or all of the digital assets.  

This law now provides a guardian, executor or trustee the right to request access to online accounts, files, transactions, social media, email and more with a direction specified under a power of attorney, will or trust document.  With this access, the fiduciary may access information, close accounts and obtain information that may be helpful in administration. 

Depending on when you prepared your estate planning documents, you may want to update your documents to provide for this authorization.  As we become more of a digital world, having access to these digital assets and accounts can make the role of fiduciary be less cumbersome.

If you have any questions about this or other tax and estate planning matters, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.

Who Determines What Happens to Me After I Die?

Death is not a subject that many people like to think about.  This one of the biggest hurdles many have in preparing an estate plan, just thinking of the fact that we are mortal can cause us to delay the discussion.  Once the planning begins, one topic seems to come up beside where all of your assets go.  What happens to me?

As there can be disputes regarding cremation or where the final resting place may be for a loved one, having some direction is helpful for the family.  In Illinois, there is a statute named the "Disposition of Remains Act" 755 ILCS 65.  This act provides that an individual can direct the control of their remains via written directions as long as they satisfy the requirements of the Act.  If a person does not designate an individual, the Act provides for an order of who would have the right to control and make decisions regarding the remains:

1. The person designated in a written instrument pursuant to the Act;
2. Any person serving as executor or legal representative of the decedent's estate and acting according to the decedent's written instructions contained in the decedent's will; 
3. The individual who was the spouse of the decedent at the time of the decedent's death;
4. The sole surviving competent adult child fo the decedent; or if there is more than one surviving competent adult children of the decedent, the majority of the surviving competent adult children;
5. The surviving competent parents of the decedent;
6. The surviving competent adult person or persons respectively in the next degree s of kindred or, if there is more than one surviving competent adult person of the same degree of kindred, the majority of those persons;
7. Any recognized religious, civic, community, or fraternal organization willing to assume legal and financial responsibility;
8. In the case of individuals who have donated their bodies to science, or whose death occurred in a nursing home or other private institution and the institution is charged with making arrangements for the final disposition of the decedent, a representative of the institution;
9. Any other person or organization that is willing to assume legal and financial responsibility.

As you can see, the decision may be different from what you intended depending on your circumstances and if you haven't taken steps to declare your wishes in a written document.  One option is to utilize the statutory form known as the Disposition of Remains Form that is cited under Section 10 of the Act or include your wishes in your Will.

Another option is to preplan and/or prepay your funeral and enter into an agreement with a funeral home.  This can help ensure your wishes are followed for your funeral and also alleviate any concern regarding funeral costs that may be placed on loved ones. 

If you have questions regarding your estate plan, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.

Property Tax Bills Are Out, Check to Make Sure You Have the Homeowners Exemption

If you are a homeowner in Cook County, you will soon be receiving the 2nd installment of your property tax bill. Like many other residents, you would like to see that tax amount reduced if possible.  One simple way to get a nice reduction is to ensure you are receiving the homeowner's exemption (also known as Homestead Exemption) if you own your residence.  This exemption is given to property owners on their property tax bill. Taxpayers whose single-family home, townhouse, condominium, co-op or apartment building (up to six units) is their primary residence can save $250 to $2,000 per year, depending on local tax rates and assessment increases. 

If you are over 65 years of age, you may also be entitled to a Senior Exemption or Senior Freeze on your property taxes.

First, check to see if you have a homeowner's exemption by searching your property by PIN or address on the Cook County Treasurer's website.

You can also review the most recent 2nd installment of your property tax bill, it will list the exemptions at the lower portion of the bill and whether you received any exemptions for that tax period. 

Next, if you believe you are entitled to an exemption, you can obtain the exemption forms on the Cook County Assessor's website.  If you have lived in the property for a number of years and have not claimed the exemption, you can file Certificate of Error forms to request a refund for the Homeowners and/or Senior Exemption for the years that you qualify.

Finally, if you are a new homeowner, you may not qualify for this year's homeowner exemption but put a reminder to file for the exemption next year.  This is also important for anyone soon to obtain the age of 65 so that they file to obtain the Senior Exemption.  

This exemption is not limited to Cook County or the State of Illinois.  Contact your local Property Tax Assessor or Treasurer to confirm that you are receiving all credits for being a homeowner in your state.

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.

Why You Should Review Your Estate Plan

If you already have an estate plan in place, congratulations as you are in the minority of the population.  When was the last time you reviewed that estate plan?  For many individuals, they created an estate plan when they had children or at a certain time in their life that caused them to want to have a plan put in place such as a death in the family.  While it is great that you at one time created the estate plan, changes in your life since you created that estate plan could cause that once well-thought-out plan to have different consequences from what your current intentions are. 

First, many life events warrant a review of your estate plan.  This could be a death, divorce, marriage, the birth of a child(ren), grandchildren or changes to the contents of your estate.  Any of these items could cause you to want to name different individuals from those you may have named as beneficiaries, guardian, executor, trustee or power of attorney.  

Second, changes to state and federal laws.  The most obvious change is the increase in the federal estate-tax exemption.  Whereas 20 years ago, the estate tax exemption was around $600,000 before an estate was taxed, today, the estate tax exemption is $11.4 million.  Therefore, you may have made certain provisions in your estate planning documents to avoid estate taxes but those provisions may no longer be necessary.  For some, state estate tax limits might be more of a concern than the federal exemption.  The power of attorney forms are also usually updated by each state every few years to incorporate changes in the statutes.  It is best to update your property and health care power of attorney every 3 to 5 years to utilize the newest forms.

Finally, do you know where your documents are?  Depending on the time that has passed since you originally executed your estate plan, the attorney who assisted you with your estate plan may have retired, changed firms or passed away.  Many times the original documents are held by the attorney and if you are not able to track the attorney down, those documents might be lost. 

The good news is that many changes people make to their estate plans can be done with simple amendments or updated statutory forms.  If you have already gone through the heavy lifting of preparing an estate plan, the updates can be a lot less time-consuming. 

If you have questions regarding your estate plan, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.

Shocked That You Owe Taxes This Year? Why and Now What?

As we begin to enter the middle of tax season, it is becoming pretty apparent that a lot of taxpayers are beginning to see the effects of the new tax law as they file their tax returns. 

It has been widely reported that the average refund for taxpayers has decreased. The IRS has reported a 8% reduction in average refunds in comparison to 2017.  What that also means is that a larger number of taxpayers who may have previously had refunds, now find themselves having to write the Department of Treasury a check before April 15th. 

The questions many taxpayers have is how did this happen, what if I can't pay my tax bill, and what should I do to fix this for next year?

First, Why did this happen? What many individuals will find as they review their tax returns is that they may no longer be itemizing their deductions as the standard deduction doubled for 2018 and the state and local tax deduction was capped at $10,000. It is estimated that almost 90% of taxpayers will take the standard deduction going forward rather than itemizing. 

The second reason you may owe is that the IRS changed the federal tax withholding tables with the new tax law.  The withholding tables are guidelines that your employer follows in order to deduct the appropriate amount of income taxes from your paycheck.  The new tables reduced the anticipated tax rate for most individuals.  Therefore, even though your taxes for the year may have stayed the same or gone down, with less withheld from your paycheck, you now owe at the end of the year.

What if you can't pay the tax you ower?  The IRS does allow for installment plans if you contact them and enter into an agreement that would allow you to pay off your debt over a period of time.  If you avoid working with the IRS to pay off your taxes, you may find the IRS issuing a lien on you or worse, levying your assets.  It is best to try and avoid these situations as penalties and interest begin to accumulate on outstanding tax liabilities making these debts even more difficult to manage in the long run.

Even if you can't pay your tax, be sure to file your return on time!  Filing a return late without an extension will result in much larger penalties when a tax balance is due.

So, What should you do going forward?  If you find yourself owing taxes, discuss the reasons why with your tax preparer.  By reviewing your tax return and discussing what your income will likely be in 2019, you can then adjust your withholdings with your employer.  This might be reducing the exemptions you are currently claiming on your W-4 or simply adding an additional amount to your withholding each pay period. 

As always, major life events such as having a child, getting married or divorced may warrant a closer look at your tax withholding as well.

Hopefully, with some planning, you won't be shocked again when you file your 2019 taxes next year. 

If you have questions regarding tax or estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.

Tax Season is Scam Season

As the tax season begins and you start receiving your tax documents in the mail, scammers also start to call or send emails and letters to unsuspecting individuals attempting to obtain banking and personal information.

The IRS has provided information about what to be aware of if you receive a call from someone purporting to be from the IRS.  Many times these "scammers" state that you owe taxes and demand immediate payment.  

The IRS will never:

• Call demanding immediate payment. The IRS won't call taxpayers if they owe taxes without first sending a bill in the mail.
• Demand payment without allowing taxpayers to question or appeal the amount owed.
• Demand that taxpayers pay their taxes in a specific way, such as with a prepaid debit or gift card.
• Ask for credit or debit card numbers over the phone.
• Threaten to contact local police or similar agencies to arrest taxpayers for non-payment of taxes.
• Threaten legal action, such as a lawsuit.

Also be aware of phishing scams that come via email.  Many emails may have links that look like official IRS websites but they instead are created to capture your personal information. 

You can forward suspicious emails to the IRS or contact the Treasury Inspector General if you suspect you have been scammed. 

If you have questions regarding tax or estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.

Illinois Tax Break on Certain Dividends

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 had a number of clients with stock ownership who received dividends from companies that qualify for the 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 company.

I am currently aware of the following 4 companies that have published letters to their shareholders notifying them of the potential dividend subtraction for Illinois that have current letters online for 2018.

Abbott Laboratories (Tax year 2018 letter)

AbbVie Inc. (Tax year 2018 letter)

Caterpillar Inc (Tax year 2018 letter)

Walgreens Boots Alliance, Inc. (Tax year 2018 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 Glick and Trostin, LLC at 312-346-8258.

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.

Does Your Company have a Roth 401k Option?

Over the past decade, more and more employers are offering a Roth option with their employee 401k plan.  This might not be publicized as many individuals tend to look at the tax deduction of contributing to a Traditional 401k plan.  But with tax rates at historical lows, it might be beneficial to contribute a portion of your 401k contribution to a Roth 401k and pay the tax on that contribution now.

The difference between a Traditional 401k and a Roth 401k is similar to the differences between an IRA and a Roth IRA, it comes down to when the tax is paid.  

A Traditional 401k allows you to take a portion of your income and contribute to your retirement plan, this contribution is tax-free and reduces your taxable income that is reported at the end of the year.   The Traditional 401k funds then grow tax-free over the course of time and when you withdraw funds during retirement, you then pay tax on those distributions. 

The Roth 401k is taxable income during the year that you contribute to a retirement plan.  Once in the Roth 401k, the funds grow tax-free and when you reach retirement you can withdraw the funds without any tax consequence. 

If your company has a 401k match program, that matching contribution would go into the Traditional 401k even if you contribute 100% into a Roth 401k.  What is nice is you can decide what percentage you wish to contribute to each as many opt for a 50/50 split between the Roth and Traditional 401k contribution.

Nobody has a crystal ball as to what tax rates will be in 5 years much less when you retire, although rates will likely increase and depending on your income level, you may pay a higher tax in retirement than you do now.  Having a mixture of Roth and Traditional 401k funds in your retirement nest can also be beneficial as you can withdraw funds from a Roth without triggering a large tax for purchases in retirement such as a vehicle or vacation.

If you have questions regarding tax or estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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.