Illinois Estate Planning Revocable Living Trust

Revocable living trusts are an estate planning tool that helps manage assets before death. A trust transfers the administration of a person's property to another person or institution, known as the trustee, who manages and distributes the assets for the benefit of or to a beneficiary. With revocable living trusts, the client usually is the beneficiary and sometimes is the trustee.

Revocable living trusts can avoid probate and improve Medicaid eligibility. Trusts also can permit a designated family member, not the court, to determine if a person is incapacitated and to act as trustee if the client cannot manage the trust.

Carol Nolan has significant experience creating revocable living trusts that meet clients' objectives.

The Revocable Living Trust offers an attractive asset management solution in many situations.  Typically, a client (grantor) creates a living trust naming his or herself as the trustee and lifetime beneficiary of the trust.  Assets are then transferred out of the client's name individually and into the name of the trust.  The trust agreement specifies successor trustees to manage trust assets in the event of the grantor/trustee's death or disability.  Disability of the grantor is carefully defined in the trust instrument.

Living trusts can avoid guardianship proceedings.  Living trusts can include language that defines when a grantor is deemed incompetent. For example, if a grantor's spouse or his children unanimously certify with the written concurrence of a physician that the grantor is incompetent, the designated successor trustee becomes empowered to manage the grantor's property.  This places control of the incompetency determination with the client's family and not with the courts. 

A guardianship is not necessary when disability occurs because the client's assets have been placed in the trust.  A living trust can also provide continuity of asset management and probate avoidance upon the grantor's death.  Financial accounts, business interest and real estate must be marshaled when a guardian or power of attorney agent assumes control.  A living trust provides for a change of trustees without the need to retitle a disabled person's property.  Typically, assets are consolidated and organized during the funding of a living trust, which saves a guardian or agent from having to search for missing deeds, bank accounts or stock certificates. 

Living trusts can be revoked and leave the grantor without a successor to manage his or her assets.  However, the trust instrument can prevent the grantor from revoking or amending the trust if the grantor is deemed incompetent. 

Living trusts provide for a smooth transition to pass assets to the beneficiaries when the grantor dies.  There are no probate costs for legal fees, filing fees and notice.  There is no requirement to publish for creditors.  The beneficiaries do not need to wait the Illinois requirement of six months before receiving their inheritance.  While it is advisable for the successor trustee to contact an attorney when they assume their duties as successor trustee, the involvement of the attorney is typically minimal thus avoiding costly legal fees.

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