Oak Brook, Illinois Trusts Attorney
Dedicated Estate Planning Lawyer in DuPage and Cook Counties
A trust is an estate planning vehicle created as a means to hold property/assets in the name of the trust for the benefit of a third party. In a trust arrangement, the trustee holds property for the beneficiary. The trustee may be you, your spouse, your child, relative, or close friend (and sometimes even an institution such as a bank) that is designated to manage the assets within the trust. Creating trusts helps better manage your property during your lifetime while ensuring a smooth transfer of your property at the time of your death.
Trusts are complicated estate planning vehicles that require the assistance of a professional to set up correctly. Michael V. LoCicero, Attorney at Law, has over three decades of experience in probate and estate law serving clients in Cook and DuPage Counties. Our DuPage County, IL estate planning lawyer has helped numerous clients in the Chicagoland area set up trusts as part of an effective estate planning strategy.
Understanding Trusts in Illinois
One of the primary purposes for setting up a trust is to enable you to control the distribution of your property to your loved one(s) after your death with no probate and minimal tax liability. Trusts can also provide lifetime benefits, such as naming and appointing a successor trustee to manage your trust assets for your benefit if you become incapacitated. In general, a trust consists of four parts:
- The Grantor/Settlor/Creator: The person who creates the trust.
- The Trustee: The person responsible to manage and hold the property for the beneficiary pursuant to the terms of the trust agreement.
- The Beneficiary: The person who receives the benefits from the management of the trust property.
- Principal or Subject Matter: The property or assets that are titled and held by the trust.
Under Illinois law, it is possible for a single individual or entity to hold all three roles; settlor, trustee, and beneficiary. In these instances, the vehicle is known as a “grantor trust.” Each trust has its own set of rules (as designated by the settlor and in keeping with Illinois law) pertaining to the rights and duties of the parties involved.
The most common type of trust, a living trust also known as a Revocable Trust or Grantor Trust, is set up during the lifetime of the individual. While alive, the grantor can name themselves as Trustee and thereby retain control of the assets within the trust for their own benefit. During the lifetime of the grantor, the trust can be revised or revoked in part, thereby being a flexible method of property management. Upon death of the beneficiary, the trust assets are immediately distributed to the beneficiaries or held pursuant to the instructions of the settlor, without probate.
Unlike a living trust, a testamentary trust is contained within the will and only goes into effect upon the grantor’s death. Testamentary trusts are often used in estates with minor children as a means of protecting their assets until they are old enough to assume control. It is not uncommon to set up multiple testamentary trusts to address different assets within the estate and multiple beneficiaries. Establishing a Children’s Trust for minor children allows one to establish controls over assets left at death so they may be used for important purposes, such as the education of the minor child.
Special Needs Trusts
A special needs trust is created to ensure that a disabled family member will not be cut off from government benefits such as Social Security Disability and Medicaid in the event of the settlor’s death. Bequeathing assets to a family member with special needs without using this type of trust can render them ineligible for these critical benefits and quickly deplete their assets.
To learn more about trusts and to find out if they are the right estate planning tool for you and your family, contact Michael V. LoCicero, Attorney at Law today at 630-932-7007 for a free consultation. Our DuPage County, IL estate planning lawyer represents clients for wills, trusts, probate, and other estate planning issues in Cook County and DuPage County, including the Chicago suburbs of Oak Brook, Itasca, Hillside, Darien, Lemont, Naperville, Wheaton, Maywood, and surrounding Illinois communities.