A "trust" is a legal arrangement that may be created to split the legal rights to property. A basic trust is a relationship between three people: a grantor, a beneficiary, and a trustee. The grantor gives property to the trustee to manage for the benefit of the beneficiary, according to certain rules written in the trust document.
These three roles can be held by the same person. In fact, a person can give property to themselves to manage for their own benefit. The only way that this legal relationship avoids probate is if subsequent beneficiaries are named in the trust document, who will receive the property after the original beneficiary passes.
There are two types of trusts in Illinois. A revocable living trust is a trust set up by an individual during his or her lifetime that can be completely changed or cancelled (revoked) at any time. An irrevocable living trust is the second type and is not subject to revision or revocation.
Creating a Trust
You can create a trust by drafting a trust document which sets out what property is to be put in to the trust, who the trustee and beneficiaries are, and instructions on how to deal with the property in the trust. As with preparing a will, you should consult with a lawyer and possibly other professionals in drafting a trust.
You may decide to create a trust for many reasons. Many individuals choose to create a trust simply to avoid having their estate go through probate. However, contrary to popular belief, avoiding probate does not avoid estate taxes, and estate taxes must be paid just as they would when someone has a will.
The following table highlights the main provisions of Illinois Trust Laws. See FindLaw's Estate Planning section for more general information on those topics.
|Statute||(760 ILCS 5/) Trusts and Trustees Act, et. seq.|
|Definition of a Trust||
A trust is created by will, deed, agreement, declaration or other written instrument. A "Trust" is a legal arrangement you create in which you split the legal rights to property.
|Definition of Trustee||
A Trustee is the fiduciary put in charge of overseeing the day to day management of property owned by a trust. A Trustee can be an individual, an institution, such as a bank or trust company, or a combination of both.
|Definition of Beneficiary||
A person or institution for whose benefit the trust was created. A beneficiary is frequently a close relative of the settlor but need not be. Other typical beneficiaries include charities, friends of the settlor and others whom the settlor wishes to benefit in some way.
Note: If you would like to know more about revocable living trusts, and whether they are the best option for you, there are many estate planning attorneys throughout Illinois who may be able to help.
Research the Law:
Illinois Trust Laws: Related Resources
Contact a qualified attorney.