It sounds like a scenario from a nightmare. Your children are ready to gain access to the assets in your trust after you die, only to discover that the trust is empty. That means the assets you intended to pass on to your children without a problem will instead go through probate. To avoid having this nightmare occur, Illinois residents should be aware of the steps they must take when they form their trusts.
A trust can be an excellent addition to your estate plan. You have two basic choices: revocable or irrevocable. The names pretty much explain what they are. You can change revocable trusts, but you cannot change irrevocable trusts. While revocable trusts are often the best choice, there are some situations, according to US News and World Report, where irrevocable trusts are the best choice.
If you're currently estate planning in Illinois, you probably know how important these documents are. While it's crucial you have an estate plan in place, it's also important that you take the proper steps to avoid common mistakes, which can render things like wills and trusts invalid. U.S. News & World Report offers the following advice in this case.
If you are a beneficiary of a trust in Illinois and you have questions about how the trustee is handling the assets, you might be wondering if you can, and should, have him or her removed. Your hope is that the grantor of the trust thought everything through and made the best choice possible, but there are some valid and legitimate reasons why a trustee should be removed. Since the assets are being managed over many years, and are often substantial, it is important to make the best decision for everyone involved.
If you have prepared a trust in Illinois, then you have also had to appoint a trustee. You may also have been asked to be a trustee for someone else. It is a big responsibility. It may help you to make a better choice if you are choosing a trustee or handle your duties better if you are a trustee if you understand and can explain what the role of a trustee is.
As part of your estate planning efforts in Illinois, you may decide to create a trust. There are two types of trusts that you can consider, which are irrevocable and revocable. They operate differently. You have different levels of control with each also. The name of them kind of gives you some insight into how they work, but U.S. News and World Reports explains a revocable trust can be rewritten or ended by you where as an irrevocable trust cannot.
The main purpose that many in Mokena have for setting up trusts is to help generate income for beneficiaries. That income typically comes through investments made using trust property and/or assets. The requirements placed on trustees by the Prudent Investor Rule have been detailed on this blog in the past. Yet what of the trustee managing the trust that you are a party to does have expertise in investing. Do you want him or her making decision that could potentially impact what could be your income?
Once you have put your assets into trust and assigned a trustee among your children, the expectation is that your trustee will be able to successfully handle succession of business affairs. Yet if your trustee is called away to active military service or chooses to enlist in the military, what happens to the trust you set up if you are not alive to administer changes to the trust and appointment of a new trustee?
Previous posts on this blog have detailed the duty that trustees in Mokena have to follow prudent investment strategies when managing trust assets. However, understanding exactly what such strategies may be can be difficult for some asked to assume the role of trustee (particularly if they are chosen from among a settlor's family or friends). They may not be familiar with managing an investment portfolio, and thus want to hand that portion of their duties off to more qualified parties. The question then becomes to what extent does the law allow them to do that?
When you begin to create your estate plan in Illinois, you may wonder about the differences between a trust and a will. At Zapolis and Associates, P.C., we understand that it is important to understand these differences so you can put together the best estate plan for you and your family.