Your estate plan is an affair of the heart. It is the act of giving your final gifts to the people that you love the most. This is a profound endeavor, and you should go about it in a fully informed manner.
Many people think that trusts are only useful for multimillionaires, but this is really not the case. When you know all the facts, you will make the right decisions, and your loved ones will reap the rewards.
Simple Will Inconveniences & Limitations
If you use a will to serve as the centerpiece of your estate plan, you would name an executor in the document. This is the person that would take care of the hands-on administrative tasks that must be completed after your passing.
The executor is not allowed to act independently. Under the laws of the state of Illinois, the will would be admitted to probate, and the court would probate the estate. No inheritances would be distributed while the probate process is underway.
An extremely simple and straightforward estate can be probated in about six months, but that is the exception rather than the rule. In addition to the time consumption, there are expenses that pile up during the process, and this red ink cuts into the inheritances that will eventually be distributed.
Another drawback of probate is the loss of privacy. Interested parties can access probate records to get all the details, and sensitive financial decisions should be kept away from prying eyes.
Aside from the probate pitfalls, there are limitations when you use a last will. Generally speaking, you would be allowing for lump sum inheritances. This can be a source of concern if you have someone in the family that is not ready to handle a significant sum of money.
Revocable Living Trusts
If the scenario we described above does not sound very enticing, there is another option available. The revocable living trust is an estate planning tool that is widely used because it offers so many benefits.
First and perhaps foremost, the assets can be distributed to the beneficiaries outside of probate. You do not have to worry about losing control of the assets while you are alive and well, because you can act as the trustee and the beneficiary.
When you establish the trust agreement, you would name your heirs as the final beneficiaries, and you would also empower a successor trustee to assume the role when the time comes.
If you have concerns about the money management capabilities of an heir, you can instruct the trustee to distribute limited assets over an extended period of time. A spendthrift provision could be included to protect the principal from the beneficiary’s creditors.
Other Types of Trusts
The revocable living trust is ideal for the widest range of people, but there are other trusts that can satisfy various specific objectives. For example, a supplemental needs trust can be used to provide for someone a disability without impacting government benefit eligibility.
Take Action Today!
As you can see, there are different ways to proceed, and we have just scratched the surface here.
If you decide to go forward, we can create a tailor-made estate plan that is ideal for you and your family. As time goes on, we will be well-positioned to adjust your existing plan if things change, and this is very common.
Many people are reluctant to discuss personal matters with an attorney they have just met, and this is totally understandable. When you choose our firm, you can rest assured that you will feel completely comfortable from the first moment that you walk through our doors.