What is the Function of a Trust, and What Types of Trusts Exist in Illinois?

trust fund, wills and trusts, Illinois estate planning lawyer, Illinois estate planning attorneyWhen you and your spouse decide to begin planning your estate and determining property or assets to pass on to your children, there are a few options available to you. One of these options is a trust, which can shield said assets from taxation and probate. They also enable you to protect your family and control wealth. However, there are a variety of types of trusts, so it is critical that you understand what options exist to see what works best for you.

Trusts provide many advantages, some of which include the following:

  • You can put conditions on how and when your assets are distributed;
  • A trust allows you to reduce estate and gift taxes;
  • Assets can be distributed without the cost, delay, and publicity of probate court;
  • A trust allows you to protect your assets from creditors and lawsuits.

When looking at the different types of trusts, there are generally two main categories: living and testamentary. Living trusts, also referred to as an “intervivo” trust, are set up and established during a person’s lifetime.  On the other hand, a testamentary trust is created in a will and only becomes relevant once the will goes into effect.

Living trusts can be revocable or irrevocable. If a trust is revocable, the owner of the assets can keep control of the assets in the trust and is free to change the terms of the trust at any time. An irrevocable trust, however, implies that the assets no longer belong to the original owner. It is also generally not allowed to make changes to the trust without the consent of the beneficiary.

Trusts can be very beneficial to you and your legacy, but there are certain requirements you must meet in order to establish one. If you and your spouse are considering choosing the trust option when planning your estate, do not hesitate to contact an experienced Illinois estate planning attorney to assist you with the process.