A Trust Protects Your Assets
Last updated on August 9, 2024
A trust is a unique tool in estate planning. It sets your assets aside to protect them. Many people know trusts for homes or “trust funds” for children. But trusts serve many purposes. They provide flexibility in your estate plan, and they keep your assets together without risk of confiscation or overtaxing.
At North Shore Estate Planning, our team of highly skilled estate planning lawyers can help you set up a trust that meets your needs. Schedule a free consultation with us today.
What is a Trust?
A trust is a legal arrangement in which one person transfers assets to a separate legal entity. A trustee then manages those assets for the benefit of another person, distributing them according to the rules set out in the trust document.
Trusts are estate planning tools that people typically use in conjunction with a will. In estate planning, people use trusts to protect assets, avoid probate and control distributions, even after they are gone.
Some key terms to understand include:
- Grantor: The person who creates the trust
- Trustee: The person or entity that manages the trust
- Beneficiary: The person who receives the assets
- Revocable trust: A trust that can be changed or canceled by the grantor
- Irrevocable trust: A trust that cannot be changed once it is set up
It is crucial to set up a trust with great care to maximize the benefits and reduce the risk of conflicts. Our estate planning attorneys ensure every detail is handled meticulously.
Choosing Between a Revocable and Irrevocable Trust
There are many specific trusts people can set up, but a primary difference between them is whether they are irrevocable or revocable trusts. Here is a more detailed comparison of the trusts and assets:
| Revocable Trust | Irrevocable Trust |
| Can be changed | Cannot be changed |
| Often includes homes, investments and personal property | Often includes life insurance, business interests and large assets |
| Provides flexibility for changes in your life | Offers more protection from creditors |
| Allows you to manage and control assets during your lifetime | Can reduce estate taxes |
| Suitable for managing assets during incapacity | Often used for Medicaid planning |
The type of trust you choose can also affect things like tax obligations and whether your house can be taken by nursing homes. As such, it is very important to talk to an experienced attorney about your specific needs and circumstances.
Trust Your Estate Planning to Chicago’s Experienced Team
Let our seasoned, compassionate and confident team guide you through the process of creating a trust. We have experience in handling everything from simple to highly complicated estates. Contact us today at 847-464-9825 or send us a message for a free consultation.