In general, people establish a trust for their own financial purposes or to financially protect their family members. Many different types of trusts exist that can accommodate the different reasons people have. At AJP Law Firm, our trust attorney in Illinois helps you figure out which trust will work best for you and your needs and then guide you through the entire process, which––depending on the amount and extent of assets and the instructions accompanying them––can be either a relatively quick or enduring one.
To learn more about trusts and if you will need an estate planning lawyer in Illinois to help you with it, contact our office today either using the online form or calling us directly at (847) 998-9920 to schedule a free consultation.
Trusts as Part of an Estate Plan in Illinois
A trust is a way for a property owner to pass their assets to someone else to protect the assets and to avoid the probate process, if applicable. The trustor, also referred to as the settlor or trust maker, is the owner of the property and transfers it to the trustee. The trustee is the one who manages the property for the benefit of someone else, known as the beneficiary. The beneficiary is a person or entity whom the trust was established.
Trusts can have multiple trustors, trustees, and beneficiaries. Typically, a different person or entity serves each of these unique roles. Sometimes, though, the trustor can act as both the trustor and trustee. Likewise, in limited situations, the trustee can act as both the trustee and the beneficiary.
As part of an estate plan, a trust can be used to minimize estate taxes (for someone with high assets). But they offer other benefits, too, if well-crafted. A trust can keep your assets private even when you die because a trust does not need to go through probate, and probate is a matter of public record. Also, a trust can protect assets from creditors or help beneficiaries who cannot manage money well.
Whatever your need is for a trust, our estate planning lawyer can help make sure your trust is drafted in a way that benefits you and the intended beneficiaries.
Types of Trusts in Illinois
Specific types of trusts that people can use to protect their assets or pass their property on to someone else come in many forms. However, all of these trusts are either revocable or irrevocable.
Revocable trusts, also known as living trusts, allow the trustor to continue to alter the property in the trust. They can even revoke the trust entirely. This gives the trustor far more control over their property. With that control, though, comes a downside: because the trustor still has access to the property in the trust they created, their creditors can often reach into the trust to satisfy debts owed to them.
Irrevocable trusts, on the other hand, cannot be changed or revoked once the trustor creates one. The trustor relinquishes control over the assets in the trust. Creditors cannot touch those assets once they are removed from your estate. Often, the trustor gains in terms of tax and probate avoidance.
Examples of Different Types of Trusts
Just to give you an idea of what types of trusts there are to address your specific needs, here's a list of some of the most common.
- Asset protection trust
- Charitable trust
- Constructive trust
- Special needs trust
- Spendthrift trust
- Tax by-pass trust
- Totten trust
You can also create a trust specifically for your pets, farmland, and even your gun collection.
Benefits of a Trust in Illinois
As mentioned, trusts are beneficial to avoid probate and taxes. By using a trust (in addition to a will or in lieu of a will), assets of a trust pass directly to the trust's beneficiary when the trustor dies. This process means the assets do not go into the trustor's estate – they are transferred inter vivos, or between living people. As a result, certain estate taxes do not apply to trusts. Using a trust to pass property to your heirs can have tax advantages and can avoid the potential legal complications of dividing your estate or a contested will.
A trust also gives you the ability to create instructions and conditions for asset distribution upon your death–giving you control over your assets even when you are not here. So, if you have a beneficiary whom you want to finish college before disbursement of funds or if you want only a certain amount of funds disbursed at different times in the beneficiary's life, you get to decide those things. Further, you can identify a successor trustee––someone you know who can manage the trust according to the terms and conditions.
Contact a Trusts Attorney in Cook County Today
Whether you have some or a lot of assets, a trust may be just the thing you need to manage those assets and to decide what's done with them upon your death. Our trusts lawyer in Cook County will consider what you want the trust to do for you, review the assets you want to transfer to the trust, and guide you through the entire process, providing solid legal advice as you need it or the situation demands it.