Lean on the Knowledge and Experience of Schaumburg Trusts Attorneys
While most people are familiar with the purpose of a will, many do not understand what a trust does or how to make one. In general, a trust creates an arrangement where a third party holds some asset on behalf of a beneficiary. It creates a fiduciary duty where the trustee must act in the best interest of the beneficiary in regards to the assets. Work with an experienced probate attorney to create a trust to protect your assets.
Types of Trusts
There are numerous types of trusts. Each serves a specific purpose and may be utilized depending on your specific assets and desires for your estate.
- Inter Vivos Trusts (Revocable Living Trusts). An increasing number of individuals are using this option in place of a last will and testament. It transfers assets and property to a trustee for distribution to a named beneficiary at a later date. Unlike a will, which takes effect after death, a revocable living trust takes effect immediately during the grantor’s lifetime. The correct creation of the trust can prove challenging, so it is best to secure the assistance of an experienced attorney. Once created, the grantor must fund the trust by re-titling assets in the trust’s name. If properly funded, the trust can help your beneficiaries avoid the probate court process.
While revocable during the life of the grantor, this trust becomes irrevocable upon his or her death. At that time, the trustee must complete several tasks, including:
- Obtaining a tax identification number and paying all necessary taxes;
- Notifying third parties with an interest in the estate;
- Paying any debts of the grantor; and
- Creating any subordinate trusts included in the direction of the trust and funding each of them.
- Irrevocable Trusts. These trusts are meant to be permanent. They generally cannot be changed, modified or revoked. Once completed, the grantor gives up any right to ownership over any assets or property in the trust. The benefit of this type of trust is that it removes the trust assets from the grantor’s personal estate. This protects the assets from tax liability.
- Charitable Trusts. These arrangements leave all or part of an estate’s assets to an organization as a charitable donation. A charitable remainder trust provides lifetime income for the duration of the grantor’s life. Then, at the death of the grantor, a gift from the remaining trust fund is donated to a charity. This type of trust allows the grantor to avoid capital gains tax liability and claim an income tax deduction. Trust assets are also protected from the taxable state, which keeps more money for the beneficiaries instead of it going to the government.
Work with an Illinois Probate Attorney
Creating a trust is a challenging process that requires adherence to Illinois state laws and regulations, secure the assistance of an experienced probate attorney to ensure that your trust can adequately protect your interests. The SAM LAW OFFICE, LLC can provide you with the guidance you need in Rolling Meadows, Schaumburg or other areas of Cook County, Illinois. Call today for a free consultation.