Chicago Living Trusts Attorney
A living trust is an estate planning tool that can help to protect your assets and provide an easier transition of wealth between generations. In this blog, Chicago living trusts attorney James Provenza will review living trusts and answer some common questions about them.
Knowing if a living trust is right for your situation, you should consult an estate planning lawyer. Illinois estate planning law firm, James C. Provenza & Associates, led by Attorney Provenza, has provided guidance about trusts, creation of a variety of trusts, and all aspects of estate planning to many clients throughout the greater Chicago area. He has developed countless living trusts for his clients in the greater Chicago area.
What is a Living Trust?
A living trust is an estate planning tool that allows individuals to transfer assets to beneficiaries upon their death with minimal, if any, court’s intervention. A living trust is a common and popular estate planning tool that individuals set up to avoid probate. Probate is a court supervised process to distribute assets according to a person’s last will and testament and settle the final details of their estate.
The grantor, also known as the “trustor” or “settlor,” creates the document outlining their wishes for how their assets should be distributed upon their passing. A revocable living trust allows the grantor (that would be you, the creator of the trust), while alive, to manage their assets, update or change beneficiaries, and add or remove assets in the trust. It also allows you to revoke or end/cancel the trust. It also provides for the management of the grantor’s assets in the event of the grantor’s mental incompetence.
An irrevocable living trust removes control or management of the assets from the creator of the trust (the grantor) but does allow you to remove assets from your estate for the purpose of estate taxes, meaning assets owned by an irrevocable trust may not be subject to estate tax when the grantor passes away. As the name implies, once created, you do not have the power to revoke or end/cancel the trust.
As a Chicago living trusts attorney, James Provenza can help you explore if a living trust is right for you.
When is a Living Trust Effective?
The effectiveness of a living trust generally depends on when it is funded with assets. Assets must be transferred into the name of the trust before they can be managed according to its terms. This process is called “funding” and occurs after all necessary documents have been signed by both parties, the grantor and the trustee, involved in establishing the trust. After you pass, the trustee named will manage the trust according to your instructions and the terms of the trust. While you are alive, you are usually named the trustee of a revocable living trust.
A living trust may allow for distributions to beneficiaries to begin upon your death but require additional documentation before becoming fully effective (such as transferring real estate titles). Therefore, it’s important to consult with your estate planning attorney.
What Are Tax Considerations for Living Trusts?
A living trust can also be important from a tax perspective. Depending on when you create and fund your trust, it could potentially save you money on taxes during your lifetime or upon your death. For instance, you can put up to $17,000 a year in a trust as a gift to avoid certain taxes.
It’s also worth noting that certain types of trusts are not subject to state or federal income tax while they are active – such as irrevocable trusts – so understanding which type of trust best suits your needs is key for taking advantage of any potential tax implications. James Provenza is a CPA as well as an estate planning lawyer so he is able to provide exceptionally informed assistance in areas where tax planning and law intersect. Consulting with a Chicago living trusts attorney like James Provenza can help ensure you make sound decisions around creating and funding a living trust that meets both your financial goals and personal objectives.
Contact Chicago Living Trusts Attorney James Provenza
Learning about how a living trust may be a benefit to you is an essential part of making or updating your estate plan. Since everyone’s situation is unique talking with attorney James Provenza is a good place to start. He can answer your questions about living trusts as well as trusts in general and all aspects of a comprehensive estate plan.
He is well versed in wills, asset protection, and healthcare directives including a living will which should not be confused with a living trust or a last will and testament. Attorney Provenza, his associates, and staff look forward to helping you with estate plans and your future.