Revocable trusts, which are sometimes referred to as revocable living trusts, offer many benefits with the primary one being the ability to control your assets during your lifetime. Of course, the other main benefit is the ability to dissolve the trust if and when necessary. There are, of course, other advantages as well as some disadvantages that you should consider.
At The Law Offices of Michael Rada, LLC., we want you to make the best decisions about your assets and estate planning. During a 30 minute free telephone consultation, our revocable trust lawyer will listen to your wants and expectations and will advise you accordingly. Contact us either online or at (224) 655-5200 to learn more about the opportunities trusts can offer you.
Understanding Revocable Trusts in Illinois
A revocable trust is a trust that allows the trustor to change its terms, or even revoke it in full, while the trustor is alive. Once the trustor passes away, the trust is distributed by a trustee according to its terms. It is a way for a person to manage and control their assets while they are living and have those assets pass to their loved ones when they die.
The types of that can be transferred to a trust include but are not limited to:
- Real property (e.g., homes, farms, vacation homes)
- Deposit accounts
- Investments (e.g., stocks, bonds, money market accounts)
- Business interests
- Collectables, art, antiques
- Life insurance policies
Pros of Illinois Revocable Trusts
There are distinct advantages to using a revocable trust as an estate planning tool, including:
The ability to avoid probate is the main reason people consider placing assets in a revocable trust. Probate is the process where a decedent's estate is administered through the court system. It can be a tedious and time-consuming procedure. Assets placed in a revocable trust typically do not have to go through this court-supervised process.
While there are other types of trusts, the revocable trust remains a popular choice due to its flexibility. The creator of the trust is able to make changes to the trust up until the time of their death.
A trust provides protection in case of testator incapacity. In other words, if the person that creates the trust later becomes incapacitated (develops dementia, for example), a new or successor trustee can take over the management of the trust. They will also be required to administer the trust according to its terms.
If maintaining privacy over your assets is important to you, a revocable trust is an option worth considering. Assets placed in the trust are administered to beneficiaries privately, unlike assets administered through the probate process, which is public.
Cons of Illinois Revocable Trusts
There are some disadvantages to revocable trusts, including:
Time and Money
Going through the process of setting up a revocable trust can take significantly more time and money than simply executing a Will. It requires that the trust be funded by changing deeds, titles, and other documents to transfer into the fund.
Lack of Asset Protection
Some trust types shield assets from the reach of creditors and judgments. A revocable trust, however, does not provide this protection, and assets are still within the reach of creditors.
Terminating a Revocable Trust in Illinois
The good news, and the reason most people choose to use a revocable trust, is that the trustor retains the right to terminate it when they choose to do so. The steps you need to take to terminate the trust vary by jurisdiction and the terms of the trust.
Typically, you will need to execute a trust revocation document and “defund” the trust, which means removing the assets placed into it. This may involve re-issuing titles, deeds, and other documents out of the name of the trust.
Contact a Revocable Trust Lawyer in Illinois
A revocable trust can offer many benefits. They can be used as a way to protect your assets and help family members or other individuals or organizations for which you care a lot. To find out if a revocable trust is right for you, and if so, which type of revocable trust best aligns with your interests, contact our estate planning attorney by using the online form or calling us directly at (224) 655-5200 to schedule a 30 minute free telephone consultation. We will listen to what your wishes and concerns are and develop a customized estate plan that works for you.