What is a Trust?
A trust is a legal document which appoints a person or legal entity (“trustee”) to hold legal title to property for the benefit of another (“legatee”). The trustee administers the property in accordance with the instructions in the trust document. The person who creates a trust is called a “grantor”, “trustor”, or “settlor”.
What is a living trust?
A living trust, also called an “inter vivos” trust, is a trust created during one’s lifetime and takes effect during the grantors lifetime.
A “revocable” living trust allows the grantor to change, amend, or terminate it at any time.
An “irrevocable” living trust cannot be changed, amended, or terminated after it takes effect.
Who controls the assets in a trust?
The trustee controls the assets in a trust. In a living trust, the grantor typically acts as the trustee. This allows the grantor to retain broad power to control and use the assets of the trust. A successor should be appointed to manage the trust when the grantor acting as a trustee dies or becomes incapacitated.
The grantor may elect another person to act as trustee. The trust sets forth specific instructions for the investment and use of the trust assets the trustee is required to follow.
Will placing property into a living trust shield it from creditors?
An irrevocable trust may provide some asset protection. A revocable trust will not.
What is the difference between a living trust and a will?
The main difference between a living trust and a will is that assets held in trust avoid the probate process. When a grantor creates a living trust, he transfers assets into the trust. The trust is then considered the owner of the assets. When the grantor dies, the trust is considered the owner of the assets; therefore, the property avoids the probate process and is distributed according to the instruction in the trust.
If I have a trust do I still need a will?
A will provides a backup plan for any property that is not included in a trust. For example, if you acquire assets and don’t add them to your trust, those assets will pass through state intestacy laws, which may not be in accordance with your wishes.
Is a trust private?
Probate files are accessible by the public at the court house. Probate files include value of probate assets, decedent’s place of residence, and the names and place of residences of grantor’s legal heirs.
In Illinois, a trust remains private. It does not need to be filed or recorded.