Many people believe that trusts are only for very wealthy people, in part because of the term “Trust Fund Baby.” But actually, a trust can be a useful estate-planning tool for lots of people. To know if a trust should be part of your plan and if so, what type, you will want to discuss this with your estate planning attorney.
A trust can help protect assets and facilitate the quick distribution of those assets to chosen beneficiaries. A trust that’s well-created can save time, reduce paperwork, and eliminate delays when it’s time to settle your estate. You can have the peace of mind knowing your chosen beneficiaries will receive your assets as you intended.
According to Chicago-based estate planning attorney James Provenza, “From a simple will to more complex estate plans, including trusts, I can help keep assets in the family and ensure that your intentions will be carried out faithfully.”
What is a Living Trust?
A living trust is a basic written property agreement where a “grantor” transfers property to a “trustee” for the benefit of specifically named “beneficiaries.” For a living trust, the “grantor,” who is also the creator of the trust, also serves as the trustee while he/she is still alive. To be clear, you are the grantor, the creator of the trust. A Living Trust is a popular type of trust.
There are several reasons why you might want to create this type of trust, including:
• Protecting against disability or incapacitation
• Avoid probate, or having your assets go through the probate process
• Save on estate taxes
• Protect assets from creditor claims or lawsuits
• Privacy – A living trust is completely private from public view. It is not filed anywhere and notices are only sent out to the people named to inherit under the trust.
• Specify how the assets may be used after your death to prevent misuse by beneficiaries
Types Of Trusts
There are two basic types of trusts: living, in which the grantor is still alive, and testamentary, which is established and in accordance with the grantor’s will and initiated at their death.
Of the living trust, there are two types:
• Revocable, which can be updated at any time and allows the grantor to retain control of the assets
• Irrevocable, in which the grantor relinquishes control and cannot update the trust without the agreement of the beneficiary or beneficiaries.
You can further add a variety of trusts tailored to your specific wishes, such as an Educational Trust, Charitable Trust, Grantor Retained Annuity Trusts (GRAT), Minor’s Trust, and Irrevocable Life Insurance Trust.
Assets To Put Into A Trust
You can put many types of assets into a trust, including:
• Bank accounts
• Cryptocurrency
• Financial investments (stocks, bonds, mutual funds)
• Insurance policies
• Limited liability companies
• Personal property
• Real estate
Any asset that may hold financial value can be added to a trust. A deciding factor may be the tax implications of each asset. It is best to work with an experienced estate planning attorney who can answer questions about assets and help you decide what assets to put into your trust.
Let James C. Provenza Help You with Trusts
Trusts are estate planning tools that can provide you with many benefits including minimizing estate taxes, avoiding probate, and ensuring your beneficiaries receive the assets quickly and privately. At a time when loved ones are mourning your passing, sparing your family from having to endure the expenses and the delays posed by probate courts and litigation is an advantage.
There are three main players in a trust: the grantor (the creator of the trust), the trustee, and the beneficiary(ies). The trustee is the person or entity you will select to financially manage and oversee accounts within a trust, and who has a fiduciary responsibility to the trust beneficiaries and must make decisions in their best interests.
The law firm of James C. Provenza and Associates has long served the good folks in Illinois. Attorney Provenza is an attorney and CPA and has more than 25 years of estate planning experience. He has dedicated his practice in Glenview, IL to helping individuals and non-profit organizations realize their plans and achieve their goals. Call our firm today at (847) 729-3939, or use our online contact form.
