What is the Purpose of Estate Planning and a Living Trust?

 Posted on December 05, 2022 in Estate Planning

Oswego and Yorkville Living Trust Lawyers

There are many different goals possible to be accomplished with an estate plan, depending on your situation. A good estate plan will ensure that your loved ones are in the best position possible from both a financial and personal perspective if you pass away or become mentally incompetent. When you start to plan your estate, you need to consider your assets, beneficiaries and goals. You should then consult an estate planning attorney who can advise you on ways to save money and taxes and ensure that your will or trust legally provides for your beneficiaries in the manner you direct. 

Call Peace of Mind Asset Protection, LLC at 630-780-1034, we are here to serve you and listen to your needs. If you have recently had an important life event—marriage, birth of a child or grandchild, divorce, death of a beneficiary, an inheritance, and/or purchase of a new asset—you will want to update your estate plan accordingly.

Common goals of a good estate plan include:

• Ensuring that probate is avoided when you pass away,

• Ensuring that the correct people oversee your assets if you pass away or become mentally incompetent,

• Ensuring that your assets are distributed according to your wishes when you pass,

• Naming a guardian for minor children,

• Making end of life decisions in advance, and

• Ensuring that a guardianship proceeding is not necessary if you become mentally incompetent. One way to achieve this goal is by having a power of attorney for finances and/or a power of attorney for healthcare in place.

Additional goals that are more focused include:

• Minimizing estate tax

• Protecting assets from creditors

• Planning for disabled adults and minor children

• Protecting one’s financial assets and planning for long-term care issues and opportunities

Plano, Plainfield, and Joliet Estate Planning Lawyers

Different Types of Trusts and Estate Planning:

Revocable Living Trust or otherwise known as a living trust or revocable living trust. Another alternative name for a Living Trust is inter vivo trust and/or a family trust. A Trust helps to maintain control and distribute one’s assets in a manner that protects an adult child or children from substantial wealth being transferred when an adult child is immature. Immaturity is critical to examine, and transfer maintain control of your assets while you are living and will determine who gets your property upon your death.          

What is the difference between will and a trust is the following:

A Will mandates probate, which means that your Will must be admitted into court and approved by a judge before your assets can be transferred. A Will is not kept private after your death, unlike a revocable trust. Both a will and a trust can be revised during your life if your priorities have changed. However, a trust will allow you to skip probate court and allocate one’s young children and their successor trustees. The successor trustee is a person or business entity that is responsible for administering a person’s trust. In administering a person’s trust is the ability to follow through on the specific wishes of the Trust Maker.

Irrevocable trust is as follows:

An irrevocable trust is a type of trust that you cannot amend or revoke during your lifetime. This means that an irrevocable trust is permanent and cannot be changed.

People have asked if a living trust a good option for a single person

A living trust is a good estate planning option to avoid probate and provide the most efficient transfer of assets to your beneficiaries upon your death.

Does anyone need to read my living trust?

No, the living trust is a private document, and you are not obligated to share it with anyone, even after your death. Families differ with consulting family attorneys and consultations regarding estate assets and rules. By consulting with and explaining to your beneficiaries the terms of your trust, you are minimizing disputes and misunderstandings from happening after your death.

Where should you store a living trust?

Your living trust is an especially important document and shall be kept in a safe place that will be easily accessible after your death. A safety deposit box is a good place to store your estate documents; however, access to a safety deposit box can be limited after your death, so please plan for this if you store your living trust in a safety deposit box. Your attorney will keep a copy of your trust and may store your original copy for you upon request. Lastly, it is important to let your successor trustee know where your trust can be found.

What parties are in the living trust?

There are three different parties in a living trust. The settlor(s) are the creator(s) of trust. The trustee(s) are the people who will manage the trust after your death. The beneficiaries are the parties who benefit from the trust’s income and assets.

Can changes be made to my living trust after death?

Once the settlor(s) of the trust has passed away, the trust becomes irrevocable. This means that any successor trustees of the living trust may not amend the trust.

Does a bank or trust company have to be involved in my living trust?

A bank or trust company will only have to be involved if you choose them to be. Many people will choose to designate individual trustees; however, you can name a bank or trust company to be a trustee and manage your financial affairs. A professional entity or trust company is a wise decision, but minimum asset levels must be contemplated.

What is a trustee?

A trustee is a person who will manage the Trust assets. The first trustee may be the creator of the living trust. Any following trustees will be named in the living trust and will be able to manage your affairs if you become disabled or die.

How does a living trust affect my income taxes?

A living trust will not affect your income taxes while you are living. You will continue to file your income tax as you normally do. However, after your death, your trust will have to pay taxes if it generates income. It is best to consult an attorney to find out how this applies to you and your living trust.

Does my living trust need to be updated?

Your living trust should be reviewed every 2 to 3 years to see if any changes need to be made to the document. Life circumstances can change, and it is important that your living will reflect the changes that have been made in your life.

Does a living trust protect me from a lawsuit?

Your living trust will not protect you from lawsuits. A living trust is like owning an asset in your personal name. A living trust must be revocable and amendable during your life.

Will my living trust protect me against creditors?

No, a living trust will not protect you from your creditors because it is fully revocable during your lifetime. If you are looking for creditor protection, consult with your attorney about a Legacy Trust or an Irrevocable Trust and which option is best for you.

Where do I file my living trust?

Living documents, unlike Wills, are private documents (even after death) and will never require registration or filing. If real property is sold in the name of the trust, the property’s deed will require a signature from the trustee and the deed will need to be recorded to show that the trustee had the power to sell the property. The title insurance company will review your trust agreement and determine what steps are required.

Can I revoke or cancel my living trust?

Yes, a living trust is revocable at any time before your death. Revocable means that you may make changes if you desire. After your death, the living trust becomes irrevocable.

Call Your Kendall County Living Trust and Estate Planning Attorneys Serving Aurora, Plainfield, Joliet, Oswego, Yorkville and Plano, Illinois

A living trust will and who to trust is a hard decision. Peace of Mind Asset Protection, LLC is here to ease your mind and make the transition an easy one. Please contact us for a free consultation with an attorney at 630-882-2467.