Chicago is home to some of the most prosperous estates in Illinois; and rightfully, many of its inhabitants are interested in making sure their wealth is passed on how and to whom they desire. Streamlining this process and making it as clear and indisputable as possible is the role of estate planning—and one of the most useful estate planning tools is a living trust.
But what is Chicago’s definition of a living trust and how is it different than creating a will or other probate instrument?
Living Trust vs. Will
According to Illinois Law, a “trust” may be created by a “will, deed, agreement, declaration, or other written instrument.” (760 ILCS 5/2). A living trust is a specific type of written instrument that is both changeable and effective during your lifetime.
It is similar to a will in that it spells out exactly who should inherit what upon your death; but unlike a will it involves three parties instead of two: you (the grantor); an intermediary who runs your estate (the trustee); and the eventual recipient (the beneficiary).
Also unlike a will, a living trust does not pass into probate after your death because it goes into effect immediately upon receiving your signature. According to the Illinois Probate Act, an estate must remain open for a minimum of six months if it passes into probate (755 ILCS 5/18-3).
A living will avoids this long delay and all the expenses associated with retaining an attorney and executor during this timeframe. Although it does not take the place of a will, it does streamline the probate process by disposing of most of your property outside the bounds of the will. It is generally also more difficult to dispute a trust because both the original and its copies are considered valid and legally binding, whereas only the original will is legally binding.
When Is It Useful?
A living trust is most useful for large estates (greater than $100,000) that would otherwise pass into probate. Although wills and trusts can address the same issues, a trust is generally more effective and less disputable than a will if:
- your estate is large or complex
- you have a blended family or another complex beneficiary system
- you have properties in multiple states
- you need or want to distribute your property privately
It’s important to note that, unlike wills, living trusts are private documents and how you dispose of your property will not be part of the public record. You may also change most living trusts at any time, including the assets, the beneficiaries, the trustee – you may even cancel it entirely. You may also act as your own trustee and appoint a successor trustee to take over for you when you become incapacitated.
Call Provenza Law to Set Up Your Living Trust Today
If your estate hangs in the balance, a living trust can give you peace of mind and allow you to focus on enjoying what you’ve earned instead of dividing it. Call Provenza Law today to learn more at (847) 729-3939.