A trust may be a useful estate-planning tool for your family. Trusts are flexible, varied and complex legal agreements that spell out the rules to follow for property held in trust. There are many types of trusts, however, and a skilled trust lawyer can help explain how each type has advantages and disadvantages.
If you’d like to discuss a trust with a a professional attorney, contact our office at (815) 391-0089 to schedule your free consultation. You can also use the form on this page to receive a response within 24 hours.
FAQs Regarding Trusts
What is a trust?
Generally, a trust is a right in property (real or personal) that is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. A trust is a form of property ownership. The person who sets up a trust is called the “grantor” or “settlor.” The trustee is the “legal” owner of the trust property, and his or her name is on any document of title. The beneficiary is the person who receives the benefits of ownership, such as the right to receive the income from the trust’s investments. A “living” or “inter vivos” trust is one that is set up and funded while the grantor is alive. Usually, the grantor names himself as both trustee and beneficiary. In contrast, a trust that comes into being under the terms of a will, after the grantor’s death, is called a “testamentary” trust.
How does a trust avoid probate?
When an estate is conveyed through a will, the probate court must validate the will before its provisions can be executed. The probate process can require up to two years. Assets held in a living trust, however, are not subject to probate. There are several advantages of avoiding probate:
- Expedited distribution: A living trust allows assets to be distributed to your heirs as quickly as your trust agreement instructs and the taxing authorities allow, without the additional delays of probate. Your spouse, for instance, could receive income to provide for living expenses immediately.
- Expense reduction: The expenses of probate are completely avoided for all assets held in your living trust.
- Privacy and confidentiality: When a will is entered into probate, all of its provisions become a matter of public record. Since a living trust is a private arrangement, its terms are not made public at your death. Your assets and intentions are known only to your trustee and beneficiaries.