Trusts

What Are The Advantages Of A Living Trust?

The two primary advantages of a living trust, to the extent you transfer your assets to the living trust during your life, are the avoidance of probate and the avoidance of guardianship proceedings.

As stated above, the first advantage of having a trust is that assets held in trust at your death are allowed to bypass the probate process. The trust is considered the owner of your assets when you set up and transfer your assets to a living trust. When you die, there is no probate because the trust already owns your assets, not you, and trust assets are then distributed according to the instructions in the trust.

First, a living trust is especially useful if you own real estate in more than one state. Generally, real estate is probated where it is located. However, you can bypass ancillary administration by transferring your out-of-state real estate to a living trust as probate administration is not required for property held in a trust.

A second advantage of a living trust is that it provides for comprehensive disability planning. If you become incapacitated, a living trust provides for a successor trustee to take over the control of the trust. The successor trustee would then invest the trust funds and use them for your benefit, according to the instructions in the trust. The successor trustee cannot use the assets for his or her own benefit, but he or she can receive compensation, if allowed under the terms of the trust. Additionally, the trust avoids the necessity of having a family member or other person named as a guardian by the probate court to manage your assets.

Moreover, there are other advantages to a living trust such as privacy. Most county court probate files including testate, if you die with a Will, or intestate, if you die without a will, that are open to the public. Unlike a Will, the contents of a living trust are not a matter of public record. Moreover, creating and amending a trust is usually easier than creating and amending a will. Unlike a Will, a living trust does not generally require a formal signing ceremony with at least two attesting witnesses. Only the grantor’s signature is required to create a valid trust instrument.

Who Controls The Assets Of A Trust?

The trustee named under the trust controls the assets of the trust. In a living trust, the individual who creates the trust in most cases acts as trustee. If you choose to act as your own trustee, you retain broad powers to control and use the assets you put into trust. When someone other than you is the trustee, the trust sets forth specific instructions for the investment and use of the trust assets during your lifetime. Typically, even if someone else is acting as trustee, you will be the beneficiary of the trust and can amend or revoke the trust during your lifetime. As long as you are acting as trustee of a living trust that you created, no income tax returns, nor accountings are required. You also may appoint someone other than yourself to act as trustee if you feel you want your assets professionally managed, or if you want them in the hands of an independent party, although this may lead to additional work such as the filing of a separate income tax return for the trust.

Why You May Need A Lawyer for Your Trust?

In Illinois, only attorneys are allowed to assist in this process. Contact Pinkston Law Group so our attorney can prepare a beneficial trust for you.

Talk To A Will, Cook, DuPage, And Kane County Trust Attorney Today

Pinkston Law Group knows that it is important to make sure that you receive the advantages of creating and funding a trust and we will listen to your needs. Pinkston Law Group handles a wide variety of clients who need estate planning instruments.