There are many difficulties and stressed which will be experienced by your loved ones upon your death. Probate does not need to be added to the list. It is a common fallacy that signing a will avoids the need for a probate proceeding. Yet, even with a will, an executor must begin a court proceeding following the decedent's death in order to properly distribute all of the decedent's property. In the state of Illinois, probate lasts at least six months and is required if the decedent had at least $100,000 in assets or owns any real estate in his or her own name alone.
While probate requires a court proceeding to ensure that the estate is properly distributed, the existence of a living trust can allow a decedent's survivors to avoid the courtroom altogether. This is because a living trust exists as a separate legal entity from the person who creates it. A living trust is similar to a box into which a person puts his or her property. Once that person puts his or her property into the box, he or she no longer legally owns the property. The box, or trust, does. Still, as the trustee of the trust, the creator can control the property in the trust and choose what property goes into the trust. Upon death, assuming the trust has been properly funded, the decedent does not directly own any property in his own name which requires distribution via the probate process as the property is legally owned by the trust. After death, a successor trustee named in the trust takes over the role of trustees.
While a living trust may simplify the process of property distribution following death, the creation of a living trust can require some effort. The title of all assets and/or beneficiary designations must be transferred to the trust. If the trust is not properly funded, any property left out of the trust may trigger the need for probate.
For example, real estate is typically transferred to a living trust whereby the individual or couple sign and properly file a deed. A new signature card for bank accounts and certificates of deposit are executed with the bank which show the living trust as the owner. Ownership of investment accounts are transferred into the name of the trust and the trust can be named as beneficiary of life insurance policies. Your attorney should review tax protected assets such as IRAs and annuities to determine the proper way that the beneficiaries on such instruments should be designated.
A living trust is revocable, meaning that it can be amended or revoked at any time before you die. Usually the costs of creating and funding a living trust are many times less than the cost of a court-ordered probate proceeding. Consult with your attorney if you have any questions regarding use of a living trust to avoid probate.
This article is intended to present general information for educational purposes, is not legal advice and should not be relied upon in connection with any particular matter. The reader is advised to immediately retain their own separate legal counsel with respect to any specific legal issue. Rights to bring a claim will expire through the passage of time by the applicable statute of limitations.
While probate requires a court proceeding to ensure that the estate is properly distributed, the existence of a living trust can allow a decedent's survivors to avoid the courtroom altogether. This is because a living trust exists as a separate legal entity from the person who creates it. A living trust is similar to a box into which a person puts his or her property. Once that person puts his or her property into the box, he or she no longer legally owns the property. The box, or trust, does. Still, as the trustee of the trust, the creator can control the property in the trust and choose what property goes into the trust. Upon death, assuming the trust has been properly funded, the decedent does not directly own any property in his own name which requires distribution via the probate process as the property is legally owned by the trust. After death, a successor trustee named in the trust takes over the role of trustees.
While a living trust may simplify the process of property distribution following death, the creation of a living trust can require some effort. The title of all assets and/or beneficiary designations must be transferred to the trust. If the trust is not properly funded, any property left out of the trust may trigger the need for probate.
For example, real estate is typically transferred to a living trust whereby the individual or couple sign and properly file a deed. A new signature card for bank accounts and certificates of deposit are executed with the bank which show the living trust as the owner. Ownership of investment accounts are transferred into the name of the trust and the trust can be named as beneficiary of life insurance policies. Your attorney should review tax protected assets such as IRAs and annuities to determine the proper way that the beneficiaries on such instruments should be designated.
A living trust is revocable, meaning that it can be amended or revoked at any time before you die. Usually the costs of creating and funding a living trust are many times less than the cost of a court-ordered probate proceeding. Consult with your attorney if you have any questions regarding use of a living trust to avoid probate.
This article is intended to present general information for educational purposes, is not legal advice and should not be relied upon in connection with any particular matter. The reader is advised to immediately retain their own separate legal counsel with respect to any specific legal issue. Rights to bring a claim will expire through the passage of time by the applicable statute of limitations.
Ralph E. Elliott practices law at Law Offices of Ralph E. Elliott, A Professional Corporation which is comprised of Attorneys Freeport Illinois who have over 34 years of experience including an Estate Planning, Elder Law, Business and Personal Injury Law practice.
The firm is situated at 1005 W. Loras Drive, Freeport, IL 61032 which serves business, individuals and the agriculture community in Northwest Illinois.
©Law Offices of Ralph E. Elliott, A Professional Corporation 2011.
The firm is situated at 1005 W. Loras Drive, Freeport, IL 61032 which serves business, individuals and the agriculture community in Northwest Illinois.
©Law Offices of Ralph E. Elliott, A Professional Corporation 2011.
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