If you're currently involved in the estate planning process in Illinois, you've most likely considered establishing a trust. While this estate planning tool can be highly useful, it helps to understand the different types of trusts to ensure you make the right decision. CNN.com offers the following guidance on the difference types of trusts available and why they might be right for you.
Much like the name implies, revocable trusts allow you to withdraw your assets at any point before your death. That means you can cancel the trust altogether, or even remove and add items as you see fit. This provides greater control, especially if you'd like to change the terms and conditions of your trust as your financial situation changes.
With irrevocable trusts, changes can't be made unless the beneficiary (the person who will receive the assets within a trust upon your death) agrees with the decision. Accordingly, you relinquish control of your assets once they are placed in this type of trust (althought it does exempt you from being subject to estate taxes).
You can also opt to withhold your assets until two generations have past. This is known as a dynasty or generation-skipping trust, and it's typically used when a person has a great number of assets and is looking to mitigate associated taxes.
Qualified Terminable Interest Property Trusts
In mixed families where lots of divorces and remarriages have occurred, dispersing assets can be a challenge. A qualified terminable interest property trusts allows current spouses to receive assets until their death, as which point the remainder will be distributed to family members you name specifically. This is particularly beneficial to aware children from first marriages assets.