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Lincolnshire Review Features Hedeker & Perrelli on Why Trust Funds Aren't Just for the Rich
Posted On 8/6/2009
The Lincolnshire Review (part of the Sun-Times News Group) featured Hedeker & Perrelli partners Dean R. Hedeker and Anthony R. Perrelli in two separate articles this week about trust funds.
Trust funds not just for the rich: Lincolnshire attorneys specialize in estate planning
(By ERICA BERINGER)
Attorneys Dean Hedeker and Tony Perrelli have noticed a growing trend in their Lincolnshire law firm, Hedeker & Perrelli, Ltd.
The summer months are those when families begin to discuss organizing trust funds.
The carefree, relaxing environments of family reunions and barbecues give families an incentive to approach their parents about the sensitive topic of formulating trust funds and wills, according to Hedeker and Perrelli.
Hedeker & Perrelli Ltd., 1 Overlook Point, Lincolnshire, helps families preserve their wealth for future generations, minimizing estate taxes, and avoiding the painstaking involvement in probate courts. Attorney Dean Hedeker assures families that trust funds shouldn't be directly associated with the wealthy.
"Our typical client is someone who has worked, saved, and wants to pass their wealth on," Hedeker said. "We want people to know that you don't need to be among the rich to have our services."
To establish a trust fund a person must have $100,000 in cash and own a piece of real estate. According to Hedeker, people begin setting up trusts when a disability occurs. A person is three times more likely to become disabled than to die, Hedeker said.
In the case of disability, family members may begin managing an estate and organizing what is distributed to the rightful recipients, in a process called probate. Attorney Tony Perrelli advises families to avoid this if possible.
"Probate can get very costly for families because it can take several months to complete," Perrelli explained. "Fees will be taken directly from the estate, which will decrease the amount each recipient receives in the end."
To avoid a difficult probate process, family members are encouraged to set up a trust fund as soon as possible, the attorneys said. Living trusts, or inter-vivos, make this possible, especially revocable living trusts. These allow the trustee to make changes to the trust's structure during his or her lifetime. The beneficiaries of the trust may not, however, be protected by the bombardment of estate taxes. Because the current federal state tax exemption is $3.5 million per person, the estates of fewer than three out of every 1,000 people who die owe any estate tax.
"Estate tax exemptions will change this year," Hedeker said, "and we will be ready for it."
The firm emphasizes the deep financial benefits of trust funds. Any business owner that has a minimum of $100,000 in assets will save tens of thousands of dollars in taxes and court fees by avoiding a will and going with a trust, the attorneys said.
The lawyers at Hedeker & Perrelli Ltd. understand that people are essentially just trying to protect what they have. They said the firm is devoted to building ongoing relationships with all of its clients and welcomes future patrons to utilize the attorneys' expertise.
"You will have peace of mind," Hedeker said. "Your family will be protected, and your wishes will be carried out." For more information about trust funds and Hedeker & Perrelli Ltd., visit www.cutyourtax.com.
Hedeker & Perrelli Ltd. offers the following equation to understand why some people pursue a trust fund.
A couple has $4 million in business assets, a home, personal property, savings and retirement funds.
With a will, their children will get only $3.4 million because $400,000 will go to estate taxes and $200,000 will go to probate court fees. The total taxes and expenses are $600,000.
If a family business owner puts $4 million in assets in a trust, the children will receive nearly all the money that is passed to them. They pay no estate taxes. They pay $40,000 to $80,000 to administer the trust. Their total expenses are just $80,000. The children save a half-million dollars.
By also avoiding probate court, families may circumvent their financial information falling into the hands of creditors and predators.
While families are better off writing a will than doing nothing at all, a trust holds more legitimacy, according to a Lincolnshire attorney.
"Financial institutions require that the beneficiary of a will go through the court system," Dean Hedeker said. "With a trust, the financial institutions will follow the terms of the trust without court involvement."
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