When planning for the future, you know nothing is set in stone. While you may wish to establish a trust that ensures your business will be appropriately handled by your family upon your retirement or passing, changing conditions may mean what you wish for your Illinois business and assets today may not reflect your desires five, ten or twenty years in the future. So how can you make use of a testamentary trust to give you more control over your business?
First, you should understand what a testamentary trust is. The Illinois Department of Revenue defines a testamentary trust as a trust you can create, amend, refine and revoke throughout your lifespan. While you live, you remain the sole or primary beneficiary of the trust, keeping complete control over your business – and complete control over the disposition of your business and assets upon your death. A testamentary trust remains flexible until your passing; only on your passing is the trust deemed irrevocable and final.
This means that while today you may intend to bequeath your business to your eldest child to keep everything in the family, ten years down the road you may realize your eldest child’s interests lie elsewhere while your middle child has a sound head for the family business. Even if you initially established the trust to leave the business to your eldest, later you may adjust the trust to instead grant your business to your middle child upon passing.
This blog post is intended as an information reference, and should not be considered actionable legal counsel.