Living Trusts

Will and Trust Attorney Serving Naperville and Aurora, Illinois

A Living Trust is otherwise named a “Revocable Living Trust” or a “Family Trust,” among other names. A Living Trust is a legal document that describes who shall receive your inheritance and property upon your death. Unlike a Will, a Living Trust can also be used to plan for an incapacity. Planning for an incapacity for older adults is similar to retirement planning. Most adults are more concerned about their own lifestyle and standard of living than who shall receive their property or assets upon a death. A Living Trust is called “Living” because it is designed for life and death, unlike a Last Will. A Last Will and Testament is a document for distributing property at death and cannot plan for an incapacity.

Incapacity planning is important because it protects your assets and creates an emergency plan in case of unexpected healthcare issues. Such issues increase in likelihood the older a person becomes. An unplanned incapacity can result in financial chaos. In addition to a Living Trust, a Durable Power of Attorney for Property, otherwise known as a Financial Power of Attorney, is also important.

A Durable Power of Attorney for Property allows a person to appoint an agent to manage their financial needs when they lack the ability to make financial decisions. Most Financial Powers of Attorneys have a springing provision, which means that the agent assumes responsibility only if the creator of the power of attorney is unable to make financial decisions for themselves. Most agents are spouses that can act immediately upon an incapacity or cognitive diminishment issues such as dementia or a stroke.

Incapacity Planning in Aurora

Generally, a Durable Power of Attorney for Property and Living Trust work in combination with one another. A Living Trust appoints a Trustee, which is typically the Maker of the Trust. Upon an incapacity, the Successor Trustee or Contingent Trustee assumes responsibility for managing the Living Trust. Most Durable Powers of Attorney enable the agent to transfer assets and property to the Living Trust. The Living Trust is the mechanism for protecting one’s assets upon an incapacity.

A Successor Trustee serves as an intermediary between the Maker of the Trust, or “Trustor,” and the beneficiaries of the Trust. A Successor Trustee manages the assets that are titled in the Trust’s name for the Maker of the Trust and its’ beneficiaries under the terms of the Trust Agreement. The duties and responsibilities of the Successor Trustee may vary depending on the circumstances and wishes of the Trustor or Grantor. A Successor Trustee can be held personally liable to the Grantor or Trustor and the beneficiaries for failing to reasonably perform their duties. In Illinois, the duties of a trustee are outlined in the Trust Agreement and by the Trusts and Trustees Act, 760 ILCS 5.

Trust Agreements outline the powers of the Trustee or Successor Trustee, which often include the authority to:

  • Make Investments;
  • Purchase Investments;
  • Manage investment portfolios;
  • Register securities in the name of the Trust or their own name on behalf of the Trust;
  • Vote, in person or by proxy, on issues related securities held by the Trust;
  • Repair, improve, or lease property or real estate;
  • Sell property such as real estate;
  • Refinance real estate, borrow funds, or mortgage or pledge any property;
  • Settle and compromise lawsuits including any estate claims or litigation issues;
  • Distribute income or assets; and
  • Employ agents such as attorneys and accountants.

The Trust Agreement should have a disability provision in case the Successor Trustee also develops an incapacity. A Living Trust can be revoked, amended, or changed for as long as the Grantor is alive and mentally competent to do so. Trustor or Grantor may revoke or amend a Trust in whole or in parts.

Naperville Attorney for Living Trusts

A Living Trust is governed by the Trust Agreement, otherwise known as the Declaration of Trust, which is the outline of the Maker’s wishes upon an incapacity or death. Generally, the Trust Agreement highlights how the Trustor’s property should be distributed upon the Maker’s death. In most cases, a Trustor or Grantor’s spouse will be the primary beneficiary of the Trustor’s estate. A well-drafted Living Trust should also explain how property should be distributed in case the primary beneficiary is deceased or disabled.

Trust Agreements created by Sean Robertson and Robertson Legal Group automatically give the primary beneficiary the ability to set up a Supplemental Needs Trust to protect their inheritance from creditors or the government in case of a disability. Creation of a Supplemental Benefits Trust for disabled beneficiaries is important to protect and qualify for Supplemental Security Income, Medicaid, and other “need-based” government programs. The Supplemental Needs Trust protects the beneficiary’s government benefits while providing funds for expenses not covered by government programs.

There are several benefits of a Living Trust in comparison to a Last Will and Testament. First, a Living Trust is a private document and does not have to be filed at the local courthouse like a Last Will and Testament. Second, a Living Trust does not have to be administered through Probate court, which requires a Probate attorney and an often-lengthy process. Third, a Living Trust is easily administered and generally creates few headaches, whereas a Will is more likely to involve a Will Contest because court proceedings invite estate litigation. With a Will, the heirs and legatees (beneficiaries of the Will) must be notified of the court proceedings. A Living Trust does not require beneficiaries or heirs to be notified about any proceedings. Finally, a Living Trust can include a spendthrift provision, which protects the beneficiary’s inheritance from creditor’s claims and divorcing spouses.

Contact Our Office

Sean Robertson is an experienced estate planning attorney who is passionate about assisting people with their wealth management and estate planning legal needs. Contact our office by calling 630-882-9117 for a free consultation. Sean Robertson and Robertson Legal Group, LLC concentrate in the areas of Wills and Trusts, Living Trusts, Powers of Attorney for Property and Health Care, and asset protection in and around Naperville and Aurora, Illinois.