FAQs on Living Trust in Illinois
FAQs on Living Trust in Illinois
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Living Trust is also known as "inter vivos", Latin for "among the living". It is a trust arrangement you create while you are still alive.
What is a Living Trust?
A Living Trust is an arrangement where a trustee is assigned to hold legal title over the property of another person or beneficiary. You can be the trustee of your own living trust to ensure full control of all the properties indicated in the document.
There are different types of living trust that can help avoid legal processes of proving the validity of a will, reduce estate tax, and create a long-term property management.
Why Make a Living Trust?
A living trust can avoid an expensive legal process to prove the legality of a will. Properties that are left through the trust are protected from probate. The process usually takes months before the beneficiary gets anything. After the proceedings, some of the value of what has been left would have been already consumed by attorney's fees and other legal charges.
Does a Living Trust Prevent Probate?
Yes, the appointed trustee would handle the transfer the ownership of the property to the beneficiaries outlined in the trust, without needing to go through probate. This process only takes weeks and may completely avoid all lawyer and court fees. When all the trust assets have been completely transferred to the beneficiaries, the living trust simply ceases to exist.
Is it expensive to create a living trust?
No, creating a living trust at 12Law is fast easy and very affordable.
Is it difficult to hold property in a Living Trust?
No, holding property, and transferring property into and out of a trust are not particularly difficult to administer.
Is there a possibility that a living trust will be made public like a will?
No, unlike a will, a living trust does not need to be made public.
Will a living trust protect you from creditors?
No, creditors who win a lawsuit against you can go after your property even if it is placed in a trust. All your properties held in trust are subject to your lawful debts. This is true even after you pass away, but the confidentiality of a living trust may make it difficult for creditors to identify beneficiaries.
If I have a Living Trust, do I still need a will?
Yes, you need a will to cover any assets that have not been transferred into your living trust. Your will can stipulate the beneficiaries of your entire estate, whereas the living trust only addresses assets that were placed into the trust.
The distribution of your of your assets if you die without a will would depend on the law of the state in which you reside. Typically, it goes to the closest relatives. It is up to the state court to decide, so if you want a say in the distribution of your residual estate, it is important to make a will alongside your living trust.
Can a living trust reduce estate taxes?
A living trust has no effect on the state or federal tax, all the trust assets will be added to your personal estate. However, only estates that are worth more than $5.34 million in 2014 (indexed for inflation) will owe federal estate tax.