Naperville Estate Planning Lawyer Offers Guidance on Wills & Trusts

Wills and trusts are extremely effective tools for managing your assets both while you are alive and after your death. However, setting up a trust is more complicated than it appears on the surface. Just as there are a myriad of reasons for wanting to set up a trust, there are many different kinds of trusts, each offering specific advantages over the other types. Denice Gierach, a Naperville estate planning lawyer, can help you sort through these differences and set up a trust that helps you achieve your goals.

Common Types of Trusts

Our estate planning attorney in Naperville works with three primary types of trusts. The primary differences between these types of trusts are:
1. The tax consequences for the donor and
2. The degree of control the donor has over the assets held in trust.

  • Revocable or Living Trusts. Living trusts are created during your lifetime to help manage assets or protect you if you become ill, disabled, or unable to make financial decisions. They are “revocable” because they allow you to revoke or amend them whenever you desire. They do not help avoid estate taxes, but they do help avoid probate.
  • Irrevocable Trusts. The opposite of a revocable trust, irrevocable trusts cannot be modified or terminated without permission of the beneficiary. By transferring your assets to the trust, you essentially remove all of your rights to those assets and to the trust itself. Irrevocable trusts do offer estate and tax planning advantages which is why they remain popular.
  • Dynasty Trusts. Dynasty trusts are similar to irrevocable trusts in that they transfer assets to beneficiaries and offer estate and tax-planning advantages. Unlike irrevocable trusts, though, dynasty trusts may cover multiple generations. Assets are held in the trust and distributed to each generation. In this way, the entirety of the trust is not subject to estate taxes with the passing of every generation.

Both revocable and irrevocable trusts can have positive tax consequences, minimizing or deferring taxes on your assets. A revocable trust gives you, the donor, more control over your assets in the trust, but in exchange it offers less favorable tax treatment. An irrevocable trust gives control to trustees in exchange for more favorable tax considerations.

Trusts Can Help You Achieve Your Financial Goals

Among the goals that a trust can accomplish:

  • Minimizing personal taxes while you are alive and estate taxes for your heirs
  • Avoiding Illinois probate
  • Funding an education
  • Caring for an elder or disabled family member
  • Protecting family assets
  • Controlling the timing of distribution of assets
  • Leaving a charitable legacy

If you are considering a trust as part of your estate plan or tax plan, contact Naperville estate planning lawyer Denice Gierach at the Gierach Law Firm in Naperville, Illinois. Ms. Gierach will be able to explain how each type of trust works, and which trust is right for you.

Examples of What You Can Do With Trusts

  • Maximizing assets: Irrevocable life insurance trusts (ILIT) are an excellent option for funding a trust for family members or dynasty planning
  • Providing for vulnerable adults: Supplemental needs trusts (special needs) or Miller trusts can be used to provide for the needs of elders entering a nursing home and concerned with Medicaid eligibility
  • Transferring assets to family: Almost any type of testamentary trust will work for this purpose. Allow us to explain the benefits of a Qualified terminable interest property (QTIP) trust, a Qualified Personal Residence Trusts (QPRT), or a dynasty Trust
  • Charitable trusts: A trust can allow you to have a lasting impact on the community with family foundations, charitable family limited partnerships, charitable trusts
  • Trusts as part of business succession planning: Consider a family limited partnership (to minimize taxes) or a discount family limited partnership

Obtain Skillful Legal Advice for Sensitive Family Matters from Our Estate Planning Attorney in Naperville

The immediate distribution of significant assets is not always in the best interest of beneficiaries, particularly those who are quite young or those with physical or emotional impairments. Ms. Gierach can help you determine if a trust is right for you and which type will benefit you and your beneficiaries the most.

To learn more about how a trust may work to meet your goals, contact Denice Gierach, an estate planning attorney in Naperville, at the Gierach Law Firm for skilled legal help. Call (630) 756-1160 to discuss your situation.