A Discussion on Living Trusts by a Naperville Estate Planning Lawyer

living trust, Naperville estate planning attorneyAs an estate planning attorney, I recognize that many people have questions about the various documents and tools that can be used to secure their family’s financial future. It can difficult to know which instrument or instruments are right for a particular situation. One common source of a confusion is a tool known as a living trust, which if used properly, can save a great deal of time, money, and stress for the creator and his or her family.

A living trust is a legal document somewhat similar to a will in some regards. Like a will, a living trust spells out your desires regarding asset distribution, but unlike a will, a living trust becomes effective immediately. This type of trust allows you as the grantor to place your assets in a trust which will benefit you during your lifetime. After your death, the assets controlled by the trust are transferred to the beneficiaries you have designated in the trust document. Those with a living trust choose a representative called a successor trustee to distribute assets to the designated heirs.

A Living Trust Avoids Probate

One of the greatest benefits of a living trust is that it avoids probate—the court proceeding through which your assets are distributed. Wills, on the other hand, must be examined in a court and accepted as a valid public document through probate. Probate can sometimes be a lengthy process. Skipping this legal process means that beneficiaries can receive their inheritance much faster. Wills, especially those created by an unqualified person, are also vulnerable to being contested or challenged. Revocable living trusts are often less likely to be deemed invalid after being contested than a will.

Another benefit of a living trust is that it provides the grantor and the grantor’s family much more privacy. Because wills must go through probate, the contents of a person’s will become public record while living trusts generally do not.

A Living Trust Puts the Grantor in Control

The trustee named in a living trust is able to manage the grantor’s financial affairs if the grantor becomes incapacitated by injury or illness. If a person becomes incapacitated and only has a will, the court may be required to appoint a conservator for him or her. The court would then supervise the control of the incapacitated person’s assets through a conservatorship proceeding.

With a living trust, more power is placed in the grantor’s hands. He or she is allowed to choose a successor trustee who can then manage their affairs without court intervention. Living trusts can either be revocable or irrevocable. A major difference between the two is that assets remain in the grantor’s estate in a revocable trust but move out of the estate in an irrevocable trust. Some people choose to use an irrevocable trust in order to protect their assets from creditors or lawsuits or to avoid taxes. The benefit of a revocable trust is that the grantor has the authority to modify the terms of the trust or cancel it entirely if he or she sees fit.

Contact a Naperville Estate Planning Lawyer

Estate planning can be quite complex. Our experienced Naperville estate planning lawyers have the knowledge and skill to help you understand your choices and choose the best estate planning options for your unique circumstances. Contact The Gierach Law Firm today to schedule a confidential consultation.

 

Sources:

Forbes

AARP