What Can’t Be Included In An Illinois Trust?

We all know that a will allows you to assign beneficiaries to your assets after you die, but not everyone understands a trust. Establishing a trust can enable you to protect your assets during your lifetime and an easier way to pass your assets to your heirs. An estate plan brings together a will or trust – plus finances that can’t be included in an Illinois trust.

Benefits Of A Trust

A living trust is a legal document that allows you to assign someone (or yourself) to manage your assets while alive and how to distribute them upon your death. One of the main benefits of a trust is that your heirs will avoid probate court. The probate process can take months or years to close an estate completely. Plus, it can be costly for your beneficiaries. Placing your assets in a trust usually ensures a smooth transition of your assets from your estate to your loved ones.

Someone contesting your will can draw out the probate process for even longer. There are usually 3 main reasons why someone would contest a will:

1. The will was not executed properly
2. The person was under undue stress or pressure
3. The person was not mentally sound

With a trust, you avoid having the probate court supervise the distribution of trust assets. This is why most people elect to establish and fund a trust. do not need to worry about the probate process or someone fighting your final wishes. But know this: there are certain restrictions on what you can include in your trust.

What Shouldn’t Be Included In An Illinois Trust?

Certain items cannot be included in your trust.

• Retirement accounts.
  In general you cannot name a trust as the beneficiary of a retirement account. Instead of naming a beneficiary of your retirement accounts only in your trust documents, you may choose to name them directly in the retirement account documents. This saves the beneficiary tax money and probate time. However, you may also choose to name the trustee in their capacity as the trustee of your trust in order to have the funds deposited into the trust. This is valuable should you choose to limit or control the disbursement of the trust assets. This is ideal for families with small children.
• Health savings or medical savings accounts.
  These accounts already allow you to use the money tax-free. Therefore, you cannot use a trust to pass the accounts to your loved ones.
• Vehicles.
  Your automobiles or other vehicles usually do not go through probate anyway, so there is no need to put them in your trust.
• Clauses that discourage marriage or family planning.
  You generally cannot include a clause that goes against public policy, such as marriage and family.
• Anything that encourages mismanagement of assets.
  The purpose of a trust is to manage your assets while alive and disperse them when you’re gone. Therefore, you cannot put any clause in that would disrupt this.

There may be other items that you cannot include in a trust. This is why working with an experienced estate and probate attorney is important. They can help you establish a financially sound trust that will help you while alive and help your assets avoid probate after your death.

Oak Brook Estate Planning Attorney

Don’t put your loved ones through a hard fight or the probate process. Our estate planning lawyers can advise you on the best options to help you develop a solid estate plan and a trust that will be difficult to challenge. To talk to a qualified attorney in Chicago, contact the Estate & Probate Legal Group at 630-864-5835.

Areas We Serve: Cook, DuPage, Kane, Lake and Will counties.