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Living Trusts

This is a trust created while someone is alive. It is usually a revocable trust - the person who creates it can revoke it or alter it. For this reason all income is taxed to the person who creates it and it is in that person's taxable estate. The person creating it is usually the trustee and gets the income from the trust. When he or she dies the trust assets usually continue in trust with another named trustee for the benefit of the surviving spouse and children. Eventually the assets are paid out of the trust to the children at specified ages. These trusts are used ---

1. To avoid probate.

2. To avoid creditors who cannot file claims against the trust assets. They can file only against the probate estate. This is good for people in risky occupations. However, the protection against creditors exists only after death.

3. To disinherit a spouse and get around his or her right to a statutory share of the probate estate regardless of what a will says.

4. For privacy. The trust assets do not go through probate court where an estimate of the value of the assets is part of the record and where an inventory of the probate assets may be filed and is a public record.

5. To avoid probate of out of state real estate. If you own real estate in another state the probate of your estate in that state is often required in addition to the state where you live. By holding title to that real estate in trust you avoid the probate. If you are trustee the title passes to a successor trustee on your death by terms of the trust and not by virtue of your will or the probate act of the state in question.

Illinois Living Trust Attorney Donald M. Thompson * 55 W. Monroe #3950; Chicago, IL 60603
Ph: 312-782-0844 * Fax: 312-201-1436 * Email: donthompsonlaw@sbcglobal.net