There are several reasons why Illinois residents may wish to consider using trusts in their estate plans. Trusts offer testators far more control over how and when their assets will be distributed, which can be an important consideration if their heirs are young, have acted irresponsibly with money in the past or are struggling with alcohol or drug problems. Trusts allow estates to avoid the public and sometimes protracted probate process because assets put into trusts are owned by the trust and not the estate, and they also offer protection should testators become incapacitated.
Trusts are either revocable or irrevocable. Revocable trusts are more flexible as they can be altered or revoked. This type of trust is created while individuals are still alive and is usually created to avoid probate. These trusts are often revoked following a divorce or when significant changes are desired and drafting a new trust would be easier.
Irrevocable trusts can be created while an individual is still alive or after they die, and revocable trusts may be drafted to become irrevocable after the trustor dies. This kind of trust is commonly used to provide asset protection against creditors and during divorces. Irrevocable trusts provide this protection because the assets they contain are no longer owned, or controlled by, the trustor.
Attorneys with estate administration and probate experience might advise their clients to think carefully before choosing trustees. Trustees protect the assets placed into a trust and often manage property and make investment decisions. While family members may better understand the needs of beneficiaries, they are also emotionally invested and their appointment could give rise to resentment or disputes. Trust companies are an alternative to using a family member or business associate, but the fees they charge could make them unsuitable for trusts that do not contain significant assets.