If you’re asking yourself how to set up a trust, then you understand the importance of protecting your assets. What is a trust? A trust is a legal document that designates assets to be protected and controlled by the trustee. With a trust, a grantor, the person who sets up the trust, reallocates assets to a trust. The trust is controlled by a trustee, who is responsible for distributing the assets as mandated by the arrangement of the trust. Assets are not just limited to liquid monetary funds but can encompass other types of property and businesses as well.
Many people who are proactive with their estate plans choose for a trust over will. This is because a trust has several advantages over a will, such as, the ability to bypass the probate process, the protection of private financial information, and a smooth transition of assets in the event that the grantor becomes incapacitated and is unable to control their assets.
How to Set Up A Trust
If you are married, the first choice that you must make early in the estate planning process is to determine if you want a joint trust or a single trust. Most spouses who own joint property opt for a single trust, however, they have either option.
Hiring An Attorney
Once you have decided which type of trust is in your best interest, then it is highly advised to contact a reputable estate planning attorney who has ample experience in creating trusts. Although there are online platforms that can assist you with this process on your own, an estate planning attorney is highly recommended. The paperwork must be meticulously created to ensure that your assets are protected as you intended and having a reliable attorney can ensure it is done correctly.
Assets & Financial Documents
When you are creating a trust it is important to determine which assets to allocate to the trust and which assets to leave out. Unlike a will, a trust does not automatically include all assets owned by the grantor. Instead assets allocated to the trust must be specifically designated. It is important to gather pertinent financial documents related to each type of property. This includes bank account numbers, passwords to accounts, deeds, and all other paperwork that is pertinent to designate ownership of the property.
Choosing A Trustee
The next step in creating a trust is to designate a trustee. This person should be someone that you trust as they will be responsible for distributing your assets according to the legal trust document. As this task is a large responsibility, it is highly recommended that the trustee is also a beneficiary of the assets. You may designate yourself as a trustee, however, you must designate a subsequent trustee in the event of your passing.
When you establish a trust, you have the choice to either pass on property upon your death or the event that you are unable to manage it, or to create a system that distributes property assets within your lifetime. Many business owners create a trust so that they can ensure that their business is protected in the events of the unfortunate circumstance in which the person is no longer able to manage it.
Due to the intricate nature of trusts, there are many advantages in addition to the ones mentioned above. If you have any additional questions about how a trust can help protect your assets, then please don’t hesitate to contact our offices to schedule a free 30-minute appointment.
During the consultation, we will discuss how to set up a trust, your assets, and your vision, and create your recommended plan of action. You can set your free consultation up here. Schottler Law of Chicago, Illinois is a reputable law firm serving the greater Chicagoland area. We have decades of experience in the nuances of Illinois estate planning and will help you understand answer questions such as “what is a trust?” and explain how a trust can protect your assets.