Should I Use a Revocable Living Trust or an Irrevocable Living Trust?

IL estate planning lawyer, Illinois trust attorneyAlthough many people assume that a last will and testament is the only estate planning tool that they need, a will is not always the best way to accomplish all of your estate planning goals. Other estate tools such as living trusts are often overlooked due to confusion or misunderstandings about the purpose of these tools. A trust is a legally binding agreement involving an individual or entity called a trustee who holds property for the benefit of a beneficiary. A living trust is an advantageous tool for managing your assets during your lifetime and then passing those assets to beneficiaries upon your death. If you are interested in using a living trust to manage your assets, you may question whether you should use a revocable living trust or an irrevocable living trust.

Revocable Trusts

As the name implies, a revocable trust is one that is able to be revoked or canceled. If you place assets in a revocable trust, you remain in control of those assets. You are also considered to be the owner of those assets in the eyes of the Internal Revenue Service and other governmental agencies. Because the property is yours, you can choose to remove the property from the trust and use it for other purposes at any time. A revocable living trust covers you while you are alive, in the event that you are incapacitated by illness or injury, and after you pass away. One of the greatest benefits of a revocable living trust is that it avoids probate– the public legal process during which a will is validated in court. Because you remain the owner of the property placed in a revocable trust, transferring property to a revocable trust does not affect your federal income taxes or estate income.

Irrevocable Trusts

An irrevocable trust is not able to be withdrawn. When you transfer assets to an irrevocable trust, you no longer own the assets or have control over them. The trust itself becomes the owner of the property. This means that you cannot take the assets out of the trust. Because you are not the owner of the assets in an irrevocable trust, you cannot be taxed on them. However, you can continue to gain revenue on investments from the trust. Depending on your net worth and overall estate planning goals, there may be enormous tax benefits to placing assets in an irrevocable trust. Using an irrevocable trust may also help shield your assets from any future creditors.

Contact a Wheaton Trust Lawyer

Assets placed within a revocable trust may be withdrawn at any time while assets in an irrevocable trust are no longer considered your property. There are advantages and disadvantages to both irrevocable and revocable trusts. If you want to learn more about which type of trust will best suit your unique needs, contact Stock, Carlson & Duff LLC. Call our office today at 630-665-2500 and schedule a personalized consultation with a knowledgeable DuPage County estate planning attorney.

Sources:

https://www.isba.org/sites/default/files/publications/pamphlets/Estate%20Planning.pdf
https://www.washingtonpost.com/business/2020/06/17/purposes-revocable-vs-irrevocable-trusts/
https://www.thebalance.com/living-vs-revocable-trust-3505393

 

What Is the Purpose of a Living Will?

living will, Wheaton estate planning lawyerYou may have already considered how you want your assets distributed to heirs after you pass away, but this is not the only issue that estate plans can address. Have you ever wondered what types of medical treatment you would want if you became incapacitated through a serious illness or injury? For example, if you were involved in a car accident and left comatose, would you want doctors to do everything possible to extend your life? Would you want a feeding tube, mechanical ventilation, or other death-delaying procedures? Would you want to let nature take its course?

Through a living will, you can make these types of decisions in advance. This saves your loved ones from being forced to make these decisions for you and also gives you the peace of mind knowing that your medical wishes will be followed.

The Terri Schiavo Case Emphasized the Need for a Living Will

Although it was over 20 years ago, many people still remember the media frenzy surrounding Terri Schiavo. The young woman fell into an irreversible persistent vegetative state after suffering a cardiac arrest at age 26. Her husband believed that Terri would not want to be kept alive via long-term life support and elected to have her feeding tube removed. The woman’s parents strongly disagreed and wanted their daughter to continue receiving artificial hydration and nutrition. The case resulted in a seven-year legal battle.

Even if you do not have strong feelings about the types of death-delaying procedures you do and do not want to undergo if you become incapacitated, making a decision now saves your family from the possible burden of making these decisions on your behalf. You can do so by preparing a living will.

What Types of Procedures Can Be Addressed in a Living Will?

Everyone has their own beliefs about life and death. Some people want every procedure possible used to keep them alive for as long as possible. Others do not want to be kept alive artificially if they have no awareness or quality of life. Through a living will, you can choose the specific medical procedures you do and do not want used in certain circumstances. You can make decisions about procedures including but not limited to:

  • Organ donations
  • Mechanical ventilation
  • Cardiopulmonary resuscitation (CPR)
  • Tube feeding
  • Antibiotics or antiviral medications
  • Dialysis
  • Palliative care

A living will puts you in control of your future medical care. It may also save your family members from the burdensome task of guessing what types of end-of-life care you would want. To learn more about creating a living will, speak with an experienced estate planning lawyer.

Contact a DuPage County Estate Planning Lawyer

To get started on your living will or for other estate planning needs, contact Stock, Carlson & Duff LLC. Call our office at 630-665-2500 and schedule a confidential consultation with a skilled Wheaton estate planning attorney. We can help find the tools that best fit your unique circumstances.

 

Sources:

https://www.nbcnews.com/health/health-news/bioethicist-tk-n333536

https://www.mayoclinic.org/healthy-lifestyle/consumer-health/in-depth/living-wills/art-20046303

Should I Include a No-Contest Clause in My Will?

no-contest, Wheaton estate planning attorneysThere are a number of reasons that a will or other estate planning document may be invalid. If the testator was not of sound mind due to dementia or another health condition when he or she created the will, for example, the will may not represent the testator’s true wishes. If a testator was coerced or tricked into the provisions contained in his or her will, it is also invalid. If a loved one has reason to believe that the directions contained in a deceased person’s will should not be followed, they may contest the will in court. Unfortunately, some beneficiaries may contest a will simply because they do not like the instructions contained within the will. If you are concerned that someone may challenge the validity of your will after you pass away, you may want to consider adding a “no-contest” clause.

Basics of No-Contest Clauses

There is no way to completely prevent your will from being challenged after your death. However, you can discourage beneficiaries from challenging it. A no-contest clause is a provision in a will or trust that establishes certain “penalties” if a beneficiary challenges the validity of the will or trust. For example, perhaps you are worried that one of your children will be unhappy with his or her share of your estate. You worry that he or she will contest the validity of your will in an attempt to have the will thrown out. You could include a no-contest clause that states that if a beneficiary disputes the validity of your will and loses, he or she will lose part or all of the inheritance assigned to him or her. The possibility of losing a significant inheritance can make a beneficiary think twice before challenging your will.

Limitations of an Illinois No-Contest Clause

It is important to note that a no-contest clause cannot guarantee that your will may not be contested. A beneficiary may still choose to challenge the will even at the risk of losing his or her inheritance. If the will is found to be invalid, the directions contained within the will may be disregarded and your estate may instead be distributed according to intestate law. A no-contest clause also does not discourage people who are not named as beneficiaries from challenging the will. The best way to prevent your will from being successfully challenged is to work with an experienced estate planning attorney who can ensure the validity of your will.

Contact a DuPage County Estate Planning Lawyer

To learn more about no-contest clauses as well as other estate planning options, contact Stock, Carlson & Duff LLC. Call us at today at 630-665-2500 to schedule a confidential consultation with and experienced Wheaton estate planning attorney.

 

Source:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075500050HArt%2E+VIII&ActID=2104&ChapterID=0&SeqStart=10100000&SeqEnd=10400000