Illinois Estate Planning Attorney
You may have heard some things about trusts that have piqued your interest. Trusts can be invaluable in the estate planning process. A trust can protect an inheritance for a minor child. A trust can provide support for a special needs loved one without jeopardizing the receipt of government benefits. A trust can even provide support for a beloved pet. Contact M&A Law Firm to see what type of trust or trusts might fit your unique needs and circumstances.
What is a Trust?
A person, referred to as the “settlor,” transfers property into a trust to be held for the benefit of the trust beneficiaries. There are two main types of trusts: living and testamentary. A living trust, also referred to as an “inter vivos” trust is established and functions during the lifetime of the settlor. A living trust can be revocable or irrevocable. An irrevocable trust cannot be modified or revoked by the trust settlor at any time. It cannot be modified or revoked by the trust settlor for any reason. Once the trust is active, that’s it. A testamentary trust usually becomes active upon the death of the settlor. Generally, there will be a provision in the settlor’s will providing for the activation of the trust. Because testamentary trusts become active upon the death of the settlor, they are considered to be irrevocable. This is because, as the settlor has passed away, the settlor cannot revoke or modify the trust once it has become active. When establishing a trust, a trustee is appointed and is charged with managing the trust and the trust property. A trustee is ethically bound to administer the trust according to the terms of the trust and must follow the terms of the trust unless they are somehow illegal, impossible, or unconscionable. Other duties of a trust include:
- Investing trust property according to the “prudent investor standard”
- Monitoring trust fund investments
- Preparing taxes for the trust
- Paying taxes for the trust
- Maintaining thorough trust records
- Communicating with trust beneficiaries about trust updates and disbursements
- Disbursing trust funds to the beneficiaries
- Approving or denying trust distributions (if empowered with this discretionary authority)
The job of trustee is an important one. A trustee is entrusted with the welfare and overall functioning of the trust. Always take great care in your selection of trustee. A trust must have at least one beneficiary. However, there is no limit as to the number of beneficiaries a trust can have. Some beneficiaries may be current beneficiaries. Other beneficiaries may be future trust beneficiaries. A trust beneficiary may be:
- An individual
- A charity
- A political organization
- Another type of entity
- A pet
Designing a Trust and Estate Plan to Meet the Unique Needs of You and Your Loved Ones
Estate planning is a complex area of the law with many options to consider. Get informed on the estate planning tools that can protect you and your family’s future. Contact M&A Law Firm, P.C. today. We proudly serve Cook County and Schaumburg, Illinois.