Planning for the future well-being of your loved ones is important. Part of that process is creating a comprehensive estate plan. A testamentary trust can be a great tool for most estate plans but not necessarily all estate plans. It depends in part on your purpose.
At The Law Offices of Michael Rada, LLC., we will make sure your estate plan encompasses all the right tools for your specific needs and purposes. To find out if a testamentary trust is right for you and what other estate planning tools can be used to complement it, contact us by using the online form or calling us directly at (224) 655-5200 to schedule a 30 minute free telephone consultation.
Understanding Illinois Testamentary Trusts
A testamentary trust is created by and contained in the terms of a person's Will. The trust is not actually created until the person that created the Will dies. Upon their death, the trust is created and funded.
Generally speaking, testamentary trusts are typically created for loved ones with special needs, minor children, and anyone else who inherits a large sum of money when the trust funds.
Pros of a Testamentary Trust in Illinois
There are advantages to creating a testamentary trust, including:
Unlike living trusts, which are created while the trustor is still alive, a testamentary trust can be less costly and more simple to create.
Ease of Funding
It is possible to create the testamentary trust in a Will and have it funded by a life insurance policy that pays when the creator of the Will dies. This makes funding the trust a relatively simple matter.
A testamentary trust allows its creator to retain control of their assets while they are alive. Until they die, the creator may change the terms or altogether revoke a testamentary trust.
A testamentary trust must be administered according to its terms. This means that it can last for as long as the creator wishes, and it allows for the protection of assets that are passed from one generation to the next.
Cons of a Testamentary Trust in Illinois
There are disadvantages to testamentary trusts that you should consider. Some of these disadvantages are described below.
When the trust is created, a trustee is named. The trustee is responsible for administering the trust according to its terms and on behalf of the beneficiaries. There is a lot of responsibility placed on a trustee, and it can be for an extended period of time. It is important that the person chosen is trustworthy, dependable, and willing to perform the duties required of them. Also, should they fail to properly carry out their responsibilities, it can be difficult to have a trustee removed or replaced.
Unlike some other types of trusts, a testamentary trust must pass through probate. Probate is the process of going through the courts to administer a deceased person's estate. In most cases, the probate process to open a testamentary trust is quite simple and not very expensive.
Testamentary trusts are public after your death (because your will must be filed with the court in Illinois upon your death), unlike some trusts that are administered privately. If it is important to you that the terms of your estate be kept private, a testamentary trust may not be the best fit for you.
Testamentary Trust Revocation in Illinois
While alive, the trustor is able to change the terms of the testamentary trust whenever they choose to do so. However, because a testamentary trust is not actually established until its creator dies, once it is established after death, it is typically irrevocable, and the trust must be administered by the trustee in the way the trust requires.
Contact a Testamentary Trust Attorney in Illinois Today
Will a testamentary trust work well in your estate plan? They offer many benefits but you still want to consider any potential disadvantages. Contact us online or at (224) 655-5200 for a 30 minute free telephone consultation to get the legal advice you need to create a solid estate plan that benefits you today and protects your family tomorrow.