Everyone should have an estate plan, no matter how healthy, young, or old they are. Planning what will happen to assets after death can help people ensure that their property is distributed according to their wishes. There are many options in the state of Illinois to legally bind what happens to property after death.
Types of trusts
There are two types of trusts in Illinois: revocable and irrevocable. A revocable living trust is a trust account that is set up by a person while he or she is still alive that can be changed or completely revoked (cancelled) at any time. An irrevocable living trust cannot be modified or revoked after its creation.
Creating a trust
Creating a trust is done by drafting a trust document that states the property to be put into the trust, who the trustee is (the person put in charge of day to day management of property in a trust – can be an individual or a bank, or both) and who the beneficiaries are. The trust document also spells out how to distribute the property that has been placed in the trust.
Funding a trust
To fund a trust, one may transfer title of an asset to the name of the trustee. These might include: automobiles, real estate, accounts, stocks, retirement, or investment accounts. People also often transfer rights to personal property that does not carry title such as clothes and furniture.
Deciding on a trust can help individuals avoid probate court. Probate refers to the legal process of transferring property after a person’s death, the legal issues and procedures related to distribution of an estate. Avoiding probate does not avoid estate taxes, however.
Consulting with an attorney experienced in estate planning and trusts can help ensure that property is distributed to one’s heirs or other close individuals in the way they imagined. Speaking with a lawyer can also help people’s beneficiaries avoid the hassle of probate court.