subject: Utilize Living Trusts For Your Estate Plan [print this page] A living trust is an estate planning tool which has experienced increasing popularity in recent years. A living trust provides how you want your assets to be administered both during your life and after your death. The living trust owns your property, but the trustee has control of the property during your life. An individual can name him/herself as trustee during life and while legally competent. After it is created, the living trust has to be funded. In other words, the title to your property and possibly, beneficiary designations are transferred to the living trust. While you are alive and legally competent, you can have control over your trust and the property owned by the trust. Upon your death or legal incompetence, you can provide for a successor trustee to succeed you. The living trust and revocable and amendable, meaining that it can be changed or terminated at any time.
Proper use of living trusts can facilitate probate avoidance. A probate proceeding is utilized after death to administer a descendant's estate. Where one dies in Illinois owning any real estate in his/her own name or assets with a value which exceeds $100,000, probate is required by statute. These parameters cover a lot of people! The probate process takes at least six months and is often significantly longer. An important consideration is that a probate case is on the public record. Probate can also be quite costly, especially if it involves contested matters. Under a living trust, the trust has title to your assets, but you, as trustee can retain control over your assets. Since the trust (not you) owns the property, probate can often be avoided. It is crucial to have the assistance of a qualified attorney when establishing a living trust. It can cause significant problems for one to try to create their own living trust. A trust that is not carefully tailored to your specific situation can result in your estate being probated anyway, despite your efforts to avoid it.
Estate planning is intended to assist in organizing and preserving your assets for your family members. It can be emotionally and financially damaging for the heirs of people who worked hard to build up their assets for the benefit of their families to have those assets significantly depleted at death by federal and state estate tax obligations. The remainder of this article will discuss the current status of the Illinois and federal estate tax, planning techniques to take advantage of the current and possible future estate tax exemption levels, and what the future may hold.
Recent changes in estate planning laws have caused uncertainty. The current federal estate tax exclusion level is $5 million for the years 2011 and 2012. The Illinois estate tax exclusion level was recently increased to $4 million, which presents some planning difficulties when considered with the federal exemption level. Without further action by Congress, the federal estate tax exclusion will revert back to $1 million. You should retain an attorney to assist you with your estate plan.
