Illinois living trust is one simple way to avoid probate on your property. It is a legal arrangement by which an individual can direct how the property will pass over to the survivors.
Living trusts allow one individual to hold the legal title to the property for another individual, who has been named as the beneficiary to the trust. The one who holds the title according to the statutory trust agreement is termed as the ‘trustee’. An individual can name himself as the trustee for his own trust and can thereby have full authority over the property preserved in the trust.
Unlike the trusts created after an individual’s demise (according to the terms of the will), this form of trusts is formed while he or she is still alive. For this reason, this form of trusts is termed as ‘living trusts’.
Usually, there are three parties involved in a trust deed, as explained below –
The state laws in Illinois allow a trustor to act as both trustee and beneficiary. However, if the same person acts as the trustee and the beneficiary, the trust deed will be considered void.
Illinois doesn’t follow the Uniform Probate Code. So, undergoing the probate process can be a bit complex and time-consuming for the survivors of the deceased. If you want your survivors or the beneficiary to receive your property easily, and spare them from the undue costs and delay of the probate process, opting for a living trust would seem a good choice.
In spite of having a living trust, an individual would still need a will. Any property that is not included in a trust can be included in the will. A will thus acts like a back-up plan in addition to the trust and is necessary, especially if any new property is acquired after the trust is made. You can name a person in the will to ensure that he or she receives the property, which hasn’t been left to him in the trust.
In the absence of a will, the Illinois state laws will decide the fate of any property that doesn’t make into the trust.
Every form of living trust cannot bring a reduction in your federal estate tax. A simple probate-avoidance one won’t serve the purpose. However, individuals having a lot of valuable assets can opt for an AB trust, which can be a bit complicated though. However, since the federal estate taxes are applicable only on estates worth more than $5 million, most people don't need to worry about that.
Creating a living trust in the state of Illinois is not much difficult. You’ll just need to follow the simple steps as elucidated below: