The Benefits of a Living Trust
In 2 1/2 minutes, Attorney David Hoy explains some of the benefits of a living trust. Click here to watch the video.
"Without this [a revocable, living trust] you have a probate estate, but with this [revocable, living trust] you have a trust estate . . . .”
A Living Trust:
- is a private document, not open to public view
- saves your family time & money
- allows you complete control of your assets during your lifetime
- appoints a trusted person to manage your affairs
- requires no Court proceedings to oversee your affairs
- avoids probate/court proceedings for your loved ones
- reduces the risk of lawsuits & disputes after you pass away
- provides for your children’s welfare
- preserves your assets
- avoids death/estate taxes for your loved ones
- speeds up distribution of inheritance monies
- provides for your care if you become disabled
- allows your trusted, loved ones and not a Court to determine if you are disabled
- provides for your loved ones after you pass away
- highly useful if you have a special needs/disabled child
- highly useful if you own real estate in more than one State
Unlike a Will, a Living Trust is a Private Document. Illinois law requires a person’s last will be filed on public record with the County in which they died within 30 days after his/her death. In addition, probate files and court proceedings are open to the public. A living trust is not required to be filed on public record and generally avoids probate, avoiding the with any government entity upon the grantor’s death.
A Living Trust benefits you while you are alive, not merely after your death. A Will, however, does not benefit you while you are alive because it only takes effect and is carried out upon your death. Similar to a will, a testamentary trust (which is a trust created by a Will) does not take effect or get carried out until after your death.
Generally, a Living Trust allows your loved ones to avoid probate. Probate is a Court process which provides for the collection and distribution of a person’s assets after their death.
Why Avoid Probate?
Probate is time consuming. The minimum time period for probate in Illinois is 6 months. Depending on the circumstances, probate can last anywhere from 6 months to several years. A living trust can avoid probate and serve to speed up the time period for distribution of inheritance monies.
Your loved ones may have to wait 6 months+ for inheritance money. Your loved ones may not receive their inheritance monies for 6 months or more, until the legal time period has expired for any interested person to file a Will contest or for any unknown creditor to file a claim against the estate.
Probate can be costly. Court fees, attorney’s fees, publication fees, fees to the representative and other costs can quickly “eat up” thousands of dollars of inheritance monies. A living trust can allow your loved ones to avoid probate after you’ve passed away.
Probate can “invite” a dispute over the Will. Probate can “open the door,” so to speak, for someone to appear in Court and contest the Last Will. Illinois law requires that certain heirs be notified of the Probate Court proceedings and that they have a right to appear in Court and contest the will, even if they are not named in the will. With a living trust, there is no probate proceeding or other open forum for someone to simply appear and contest the Trust. Rather, they would have to spend money on Court fees and attorney fees to file a lawsuit of their own and contest the Trust. These costs don’t make it easy for someone to contest the trust, and serve to reduce the risk of a lawsuit.
Probate proceedings can “invite” a creditor to file a claim. Illinois law requires that a deceased person’s representative in probate notify all potential creditors and also publish in a newspaper a notice to any potential unknown creditor, allowing them 6 months to file a claim against the estate. This makes it easy for any potential creditor, legitimate or illegitimate, to file a claim against the estate. A creditor claim filed against an estate can “eat up” more time and money in Court. However, with a living trust, there is no probate proceeding and thus no open forum for someone to file a creditor claim. A creditor of a trust would have to start from scratch filing their own lawsuit against the trust estate. The costs involved generally discourages and reduce the risk of lawsuits being brought against a living trust.
A living trust can protect your assets from death & estate taxes and conserves inheritance monies for your loved ones. A properly funded Living Trust can protect your loved ones’ inheritance by shielding them from having to pay estate taxes (both State and Federal) upon your death.
A Living Trust appoints a trusted person to manage your affairs.
A Living Trust reduces the risk of a legal dispute after your death. There is a lower risk of a Court dispute over a Living Trust than a Last Will. It’s less likely that an interested party will contest a Trust because they would have to spend money filing a lawsuit against a Trust whereas a Will already has an open Court forum called Probate for any interested party to appear and dispute the Will. It’s generally considered more difficult for someone to sue and challenge the validity of a Living Trust than a Will, because Illinois law has more stringent requirements as to who is competent and what makes a Will valid in Illinois than it has for the competency of the grantor and the validity of a Living Trust. Unlike probate proceedings for a Will, there are no requirements for sending notice to unknown creditors about a the death of a grantor of a living trust. In addition, Illinois does not have any requirements about notifying heirs or other interested parties who are not named in the trust of the existence of the trust and their right to contest it.
A Living Trust can protect you in the event you become incapacitated.
A Living Trust can provide for the care of your minor children after your death.
A Living Trust can provide for a special needs/developmentally disabled child.
A Living Trust can protect your child(ren) from spending their inheritance all at once. It can provide a trusted person to manage your assets to provide for your children’s welfare until they reach adulthood. A living trust can also provide for your young adult children to receive their inheritance in increments as they mature. For example, a 1/3 distribution of the assets at age 21, another 1/3 at age 25, and the final 1/3 at age 30.
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If you have questions about the application of the law in a particular case, consult your lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.