Creating a living trust in Illinois can be a valuable estate planning tool giving you control over your assets, avoidance of probate, and a useful estate planning tool. A revocable living trust Illinois may be right for you.
Living Trusts in Illinois
An Illinois living trust is created during the grantor’s life. Assets are transferred into the ownership of the trust and usually the goal is to transfer as many as possible (special accounts like IRAs, 401(k)s, and Keoughs do not qualify). A trustee is chosen to manage the assets with the direction that they are to be used for the benefit of the grantor in his lifetime. It is common for a grantor to name himself as trustee, with a successor trustee in place who then distributes the assets to the beneficiaries named in the trust after the death of the grantor. Revocable trusts can be changed by the grantor at any time and can even be eliminated entirely during life. After death the terms become permanent. This is in contrast to an irrevocable living trust which cannot be altered once signed.
An Illinois living trust allows assets to be passed outside out of a probate proceeding. Because Illinois does not employ the Uniform Probate Code, its procedures are not streamlined. Probate can take many months (and in fact an estate must remain open a minimum of six months) and incur the expenses of an executor and attorney. Illinois offers a simplified probate proceeding for estates less than $100,000 and in those instances probate may be less costly than a trust.
In Illinois a copy of a trust document is as valid as the original, however only an original will is valid. This ensures that a trust can be enforced even if the original is lost. Additionally a trust is more difficult to contest than a will.
Do I Need a Living Trust in Illinois?
A living trust in Illinois provides a variety of benefits that can’t be obtained from a will. Trusts are private documents and are not public record or reviewed by any court. No one will know who your beneficiaries are, what your assets are, and what the terms of your trust are. This is very appealing to many people.
A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary for you to have your financial life managed for your benefit.
A trust offers complete control over assets in life and in death. During your lifetime, your trusts are technically owned by the trust but you continue to use them as you normally would. After your death, assets are distributed according to the terms of the trust which you determine. When a will is probated, assets are distributed immediately. A trust can set certain dates or events for disbursement, providing financial protection for your family for many years.
Living Trusts and Estate Taxes in Illinois
Living trusts generally do not shield assets from estate tax. There is a $4 million Illinois estate tax exemption and a federal exemption of more than $5 million. Only estates that exceed these totals are taxed. It is possible to reduce and avoid estate tax using a marital trust (also called a QTIP or AB trust) that passes assets from one spouse to the survivor spouse without tax. A revocable trust is not a vehicle to avoid or reduce Medicaid spend down.
How to Create a Living Trust in Illinois
To create a living trust in Illinois, the trust document is created and then it is signed in front of a notary public. To fund the trust, assets must be correctly transferred to the ownership of the trust.
Living trusts are a popular estate planning option. The flexibility, control, and privacy they offer may be right for you.
Create a living trust in Illinois online with LegalZoom. The process begins with answering a few questions online. We review your answers, create your living trust package and send it to you by mail.