A trust is an arrangement under which one person, called a trustee, holds and manages property for another person, called a beneficiary. If you create a trust in your will, it is called a testamentary trust. A “living trust,” also called an “inter vivos” trust, is simply a trust you create while you are alive, rather than one that is created at your death. There are many different types of trusts that can be used in many different circumstances, whether it is a revocable trust, irrevocable trust or a special needs trust, and the attorneys at the Law Office of James C. Siebert & Associates, PC / Elder Law & Estate Planning Attorneys of Illinois, PC would be happy to assist you determine which would be an appropriate part of your estate plan.
Different kinds of living trusts can help you avoid probate, reduce estate taxes, or set up long-term property management. You can be the trustee of your own living trust, keeping full control over all property held in trust. A living trust allows you to arrange how you want your property managed while you are alive, and how your assets should be distributed after your death. Call the Law Office of James C. Siebert & Associates, P.C. /Elder Law & Estate Planning Attorneys of Illinois, P.C. at (847)253-7500 today to schedule an appointment with an experienced Estate Planning Attorney.
Living trusts are a popular Estate Planning tool because they are one way your property can pass to your heirs without going through probate. Like a will, a revocable living trust lets you direct how and to whom your property will be distributed after your death. You appoint a trustee to manage your trust, just as an executor would manage your will. The trustee holds your assets and distributes them according to the instructions you specify.
Through the use of living trusts, a married couple may effectively double the amount of the Federal Estate tax exemption. Accordingly, by using living trusts effectively, a married couple could pass twice as much money to their heirs without payment of federal estate tax based upon current tax rates. A trust can also be used to specify how your property will be managed during your lifetime, in case you become incapacitated. A trustee, such as your spouse, would then be authorized to step in and pay your household bills, medical expenses, insurance, taxes, and keep your financial affairs in good order as long as necessary. Used in conjunction with Durable Powers of Attorney, any need for a guardianship would be eliminated.
With a living trust, estate settlement cost and expenses often can be substantially reduced. In essence, the trust would avoid the unnecessary costs of probating your estate through the probate courts upon your death. Further, your living trust agreement is not filed in court like a will, and so it does not become public record. Accordingly, the use of a living trust affords much more privacy to the family. If you have real property in multiple states, the real property in the non-domiciliary state would have to be probated in the state where the property is located. This secondary probate, known as “ancillary” probate administration, can be expensive. With a living trust, you eliminate the need for an ancillary probate. A living trust provides a means for the administration of assets during one’s lifetime and for the disposition of those assets at death, without probate and frequently at considerable savings in time and money.