Revocable and Irrevocable Living Trusts

At Bolingbrook Promenade Estate Planning in Bolingbrook, Burr Ridge, and Glencoe, IL, we want you to make the best decisions about your assets and estate planning; that's why we assist with Living trusts. A living trust is a valuable tool that can benefit you during your lifetime and your beneficiaries after your death. One of the primary reasons for establishing a living trust is to avoid the probate process, which can be costly and time-consuming. While most people create living trusts to benefit their families, anyone can be named as a beneficiary, including yourself. For example, you can name yourself as a beneficiary of an investment account that brings in income. After your death, the income can go to your spouse, children, or other beneficiaries without the need for probate. When creating a living trust, it is crucial to transfer assets into the trust after signing the trust document, such as executing a new deed for a house or transferring the title of a car to the trust.

The Difference Between Revocable and Irrevocable Living Trust

Revocable Living Trust

A revocable living trust is a legal document that allows you to place your assets into a trust during your lifetime and have them managed by a trustee of your choosing. You can be the trustee of your own trust, or you can appoint someone else to be the trustee. One of the main benefits of a revocable living trust is that it allows you to avoid probate, which is the legal process of distributing your assets after your death. This means that your beneficiaries can receive their inheritance more quickly and without the need for court intervention. Additionally, because the trust is revocable, you can make changes to it or even revoke it altogether if your circumstances change.

Benefits of Revocable Living Trusts

Avoiding Probate

One of the biggest benefits of a revocable living trust is that it can help you avoid the costly and time-consuming probate process. Since the trust owns the assets, they don't have to go through probate before being distributed to your beneficiaries.

Privacy

Another advantage of a revocable living trust is that it allows you to keep your affairs private. Unlike a will, which becomes a matter of public record when it's proposed, a trust is a private document that doesn't have to be filed with the court.

Flexibility

A revocable living trust is a flexible estate planning tool that can be changed or revoked anytime during your lifetime. This means that if your circumstances change or you change your mind about how you want your assets distributed, you can make changes to the trust.

Asset Protection

A revocable living trust can provide asset protection for your beneficiaries. By setting up a trust, you can ensure that your assets are protected from creditors or lawsuits.

Disability Planning

A revocable living trust can also be used for disability planning. If you become incapacitated, the successor trustee you named in the trust can step in and manage your assets on your behalf, avoiding the need for a court-appointed conservatorship.

Irrevocable Living Trust

An irrevocable living trust is a legal document that is created during a person's lifetime, similar to a revocable living trust. However, once the trust is established, it cannot be altered or revoked by the person who created it. Once the assets are transferred into the trust, the person giving the property away loses all control over the assets. The trustee, who is appointed to manage the trust, has complete control over the assets and how they are distributed. The primary benefit of an irrevocable living trust is that it can help protect assets from creditors and can reduce estate taxes. However, because it is an irrevocable trust, it is important to carefully consider the terms of the trust and the assets that will be transferred into it.

Benefits of Irrevocable Living Trusts

Asset Protection

By placing assets in an irrevocable living trust, they are protected from creditors and potential lawsuits.

Estate Tax Reduction

An irrevocable living trust can help reduce estate taxes by removing assets from your estate, which can decrease the overall value of your estate.

Probate Avoidance

Assets placed in an irrevocable living trust are not subject to probate, meaning your beneficiaries can receive their inheritance faster and without the need for court involvement.

Medicaid Planning

An irrevocable living trust can be a valuable tool for Medicaid planning, as assets placed in the trust are not counted towards your eligibility for Medicaid benefits.

Control

Even though the trust is irrevocable, the trustee still has control over the assets and can manage them in accordance with your wish.

Secure your assets and protect your family's future with an irrevocable living trust. Contact us today to schedule a free consultation.

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