Do I Need a Living Trust?

Do I Need a Living Trust?

Provided By Alan G. Orlowsky

Most individuals are familiar with the basic concept of a will: it is a legal document that, if properly executed and admitted into probate, informs the court what you would like to happen to your property and affairs once you die. A will is probably the most basic estate planning document that can be created. In recent years, many people have been drawn to “living trusts” as an “alternative” to executing a will. But what exactly is a living trust, and do you need to create one for your estate plan?

What is a Living Trust?

A living trust is a legal fiction in that it is considered its own legal entity and thus can obtain and divest itself of property. The trust is created through a trust document that is created and executed while you are alive (hence the term “living trust”). The trust can be rescinded or its terms changed during the lifetime of the creator; upon the creator’s death, the terms of the trust become final.

The affairs of the trust are overseen by a trustee. This person is responsible for managing the trust’s assets and ensuring the terms of the trust, as created by the grantor (the creator of the trust), are carried out. Most grantors are the trustees of their own living trusts until they die; then, their spouse, another family member, or a professional trustee may take over management of the trust.

Do I Need a Living Trust?

A living trust is a popular way to pass property onto family members and friends without having your estate pass through probate and without the assessment of certain estate/death taxes. Because property is transferred into the trust during your lifetime and used according to the terms of the trust, the property being held by the trust does not need to pass through probate. This can save you and your heirs and beneficiaries time and money following your death.

However, creating a living trust can be expensive and is not for everyone. You may not need a living trust if:

  • You have a relatively small estate (less than $100,000 in assets), as there is a simplified probate process available and a trust would be expensive to create; and/or
  • You have assets that would not pass through probate anyway such as life insurance policies and retirement benefits. In this case, a trust would accomplish no real purpose as these items do not generally pass through probate but are paid to the beneficiary upon your death.

Seek Help from a Knowledgeable Trusts and Estates Attorney

Consult with an experienced Illinois trusts and estates attorney to learn if you need a living will and, if so, how one can be created for you. At Orlowsky & Wilson, Ltd., we help residents throughout Illinois, including Northbrook, Evanston, Skokie, Glenview, Glencoe, and Highland Park, create estate plans that capture their final wishes and accomplish their estate planning goals. Call us at (847) 325-5559 and learn if a living trust is appropriate for your situation.

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