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.

Estate planning is typically focused on passing assets after you die. But planning may include both wills and trusts to help preserve your income when you are still alive. There are some general features you should know about trusts.

General description

A trust is a legal agreement with at least three people who can serve different roles. More than one person can serve in these roles at the same time.

A trust agreement contains terms governing the trust. A trust cannot fully operate until it is funded through the transfer of property.

People in Geneva facing financial difficulties in these uncertain times may wonder if filing for bankruptcy is right for them. One fear they may have regarding bankruptcy, though is that they will lose everything in the process and be destitute. However, this fear is unfounded as there are a variety of exemptions that allow people filing for Chapter 7 bankruptcy to keep certain assets so they can move forward on solid financial footing.

What are some unlimited Chapter 7 bankruptcy exemptions?

In a Chapter 7 bankruptcy, your assets will be sold, and the proceeds used to pay you're your creditors. This is why it is referred to as “liquidation bankruptcy.” However, when you file for Chapter 7 bankruptcy, you are allowed to keep any property that is “exempt” under state or federal law. Some examples of exempt assets in which a person can keep no matter what the value of the asset include:

• Family photographs
• Necessary clothing
• Qualified retirement plans
• IRAs
• Life insurance policies

What are some limited Chapter 7 bankruptcy exemptions?

Chapter 7 bankruptcy also allows for some assets to be exempt up to a fixed dollar amount. Some examples of this include:

Americans are facing a lot of hardship right now. The pandemic spurred a recession which may hamper the U.S. economy for years. If you've lost a job, seen a reduction in hours, accrued steep medical bills or suffered any other pandemic-related misfortune, you may be wondering if bankruptcy is something you can even consider, much less take advantage of.

Before you decide, though, why not discuss your case with an experienced bankruptcy attorney? You may be surprised by what you learn when you hear the facts and receive case-specific advice.

Are you making decisions based on facts of fiction?

Unless you've really done your research, chances are good that what you know about bankruptcy was probably pieced together by things you've heard or overheard throughout your lifetime. As such, the assumptions you make about bankruptcy may be partially or completely false. That's not a very effective way to make such an important decision. Here are some of the myths about bankruptcy you may have heard or may assume are true:

We are in a historic time of uncertainty and death. Every day, we are faced with news reports of the national crises and accompanying death toll that seems to never stop increasing. Naturally, as a result, many of us are now looking to create or update our estate plans to ensure that, if the unthinkable happens, our families are protected. This may be one of the only bright sides of 2020, though, we must be mindful of the estate planning process to ensure that we do not cause more harm than good.

Tip 1: retitle trust assets immediately

Estate plans often include revocable living trusts. These are used because they avoid probate and some taxes, which ensures that one's beneficiaries have less burdens after one's death and the estate value is maximized. However, this also means that title to one's assets must be put into the name of trust. If one forgets to do this, and they subsequently die or become incapacitated, all the assets not in the trust (i.e., all the assets not retitled into the trust's name) will likely need to go through probate. This, of course, defeated the entire point of the estate plan.

Tip 2: pay attention to who is named as an owner on bank accounts

Another common error is bank accounts. If one plans to split their assets equally among their children, be sure that none of those children are named on joint bank accounts. This is what is called joint with right of survivorship. Essentially, when one passes away, regardless of what one's will states, the surviving owner on a joint account owns all the assets in that account. If one's will states otherwise, this will definitely cause familial strife and, of course, probate litigation, which again, will likely nullify one's estate plan wishes.