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Wills & Trusts

Probate Fees vs. Trust Setup Costs: What You Need to Know

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When planning your estate, one of the biggest questions is whether to rely on a will or create a living trust. Both options help direct how your assets are passed on, but the financial impact can be very different. Probate fees in Illinois often surprise families, while trust setup costs can feel like a bigger upfront investment. Understanding the difference can help you make a decision that protects both your legacy and your loved ones.

Like all content on this website, this article is informational in nature, and is not to be relied upon as legal advice.


What Are Probate Fees in Illinois?

Probate is the court process required to settle an estate after someone dies. Even with a valid will, most estates must pass through probate unless they qualify for Illinois’ small estate affidavit (for estates under $100,000 without real estate).

Typical probate fees may include:

  • Court filing fees
  • Executor compensation
  • Attorney’s fees (often billed hourly or as a percentage of the estate)
  • Appraisal and accounting fees

Because probate can take months or even over a year, these costs add up. For a modest estate, probate fees might range from several thousand dollars to tens of thousands, depending on complexity.


What Does It Cost to Set Up a Trust?

A revocable living trust avoids probate by transferring assets directly to beneficiaries under the trustee’s management. The main expense is upfront legal work.

Trust setup costs typically include:

  • Attorney’s fees to draft the trust and related documents
  • Recording fees if real estate deeds need to be transferred into the trust
  • Occasional updates if your circumstances change

For many Illinois families, the cost of establishing a trust ranges from $2,000–$5,000, depending on the size of the estate and complexity of the planning. Unlike probate, there is no ongoing court supervision, so costs after setup are minimal.


Probate Fees vs. Trust: A Cost Comparison

Here’s how the two options stack up:

FactorProbateTrust
Timing of CostAfter death, during estate administrationUpfront, while you are living
Total Cost Range$5,000–$15,000+ (varies widely)$2,000–$5,000 (mostly upfront)
Court InvolvementRequiredAvoided
Ongoing FeesPossible (attorney, court, executor)Minimal, usually none


Other Considerations Beyond Cost

While comparing probate fees vs. trust setup costs is important, money isn’t the only factor:

  • Time: Probate in Illinois often takes 9–12 months; trusts transfer assets much faster.
  • Privacy: Probate is a public court process; trusts keep your estate details private.
  • Control: Trusts allow more flexibility, such as planning for minors, blended families, or special needs.


Conclusion

Every family’s situation is unique, but one fact is clear: probate fees can be higher and less predictable than the upfront cost of creating a trust. Many Illinois families choose a trust because it not only avoids probate but also provides peace of mind, privacy, and smoother asset transfers.

If you’d like help comparing your options and understanding what makes sense for your family, contact Palley Law Office for a consultation.

The High Cost of Not Having an Estate Plan

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Many people assume that estate planning is something they can put off—or that it’s only necessary for the uber-wealthy. But the reality is that not having an estate plan carries significant costs, both financial and emotional. These costs can affect your family’s financial security, cause unnecessary stress, and in some cases, permanently damage relationships.

Let’s look at three Illinois case studies that illustrate the risks of leaving your legacy to chance.

As with all content on this website, this post is informational in nature, and is not to be relied upon as legal advice.

Case Study 1: Married Couple in Their Early 30s

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  • Husband and wife, ages 32 and 30
  • Two young children (ages 4 and 1)
  • Primary residence worth $400,000
  • $250,000 in combined 401(k) accounts

What happens without an estate plan?

If this couple dies without a will or trust, Illinois law decides who manages their estate and who raises their children. Since minors can’t inherit outright, the children’s share of the estate would likely be placed in a court-supervised guardianship. A judge—rather than the parents—would decide who manages those assets. The surviving spouse could face expensive court oversight to access funds for everyday expenses, and if both parents die, the court will also decide guardianship of the children.

The costs:

  • Financial: Guardianship proceedings are costly, with court fees, attorney involvement, and mandatory accountings. Money that could have gone to the children may be eaten up by administrative expenses.
  • Emotional: Perhaps the greatest risk here is intangible: if both parents pass away, the children’s guardians may be chosen by the court, not the parents. This can create painful disputes among relatives and may not reflect the couple’s wishes. The uncertainty adds stress to an already devastating situation.

With an estate plan, this couple could:

  • Name guardians for their children in advance, avoiding family conflict and court intervention.
  • Create trusts for children so funds are managed responsibly and released at appropriate ages.
  • Ensure the surviving spouse has uninterrupted access to assets without going through probate.

Case Study 2: Married Couple in Their Early 60s

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  • Husband and wife, age 62 and 61
  • Three adult children
  • Primary residence worth $750,000
  • $1 million in investment assets

What happens without an estate plan?

If this couple dies without a will or trust, Illinois intestacy laws dictate how assets pass. The surviving spouse does not automatically inherit everything. Instead, the spouse receives half the probate estate, and the three children split the other half.

That means the surviving spouse may suddenly find themselves sharing ownership of the family home with their children—something that can create conflict or even force a sale of the home. The investment accounts would likewise be split, potentially leaving the surviving spouse with less financial security during retirement.

The costs:

  • Financial: Legal fees for probate can easily run into tens of thousands of dollars, especially if disagreements arise. Assets remain tied up for months or years.
  • Emotional: The surviving spouse may feel betrayed or unsupported when assets they assumed were “theirs” are divided. Sibling disagreements may arise over whether to sell or keep the home. Family harmony can fray under the strain.

With even a simple estate plan—such as a will and revocable trust—this couple could avoid probate, ensure the surviving spouse is financially secure, and prevent unnecessary family conflict.

Case Study 3: Married Couple in Their Mid-70s

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  • Husband, 76, and wife, 74
  • Combined estate of $9 million (real estate, investments, retirement accounts)
  • Two adult children from the marriage
  • Husband has one adult child from a prior marriage

What happens without an estate plan?

Without proper planning, this couple risks both tax inefficiency and family conflict. Their estate exceeds the Illinois estate tax exemption (currently $4 million per person in 2024). Without strategies like credit shelter trusts or gifting, a substantial estate tax could apply.

Additionally, blended families face unique challenges. In Illinois, intestacy law could leave the husband’s child from his prior marriage entitled to a share of his estate at death—potentially straining relationships between the step-siblings. If the surviving spouse later changes her estate plan (or has none), the husband’s child could be unintentionally disinherited.

The costs:

  • Financial: A poorly planned estate of this size may pay hundreds of thousands in estate taxes that could have been minimized or avoided. Litigation between heirs is more likely, adding to costs.
  • Emotional: Stepchildren and biological children may clash over inheritance. A lack of clarity can cause long-lasting rifts among family members who may never reconcile.

Through a carefully designed estate plan—including trusts, marital deductions, and charitable strategies—this couple could preserve family wealth, minimize taxes, and ensure that all children are treated fairly.

The Bottom Line

The true cost of not having an estate plan isn’t just measured in dollars—it’s also measured in stress, delay, and damaged family relationships.

Whether you have a young family, are approaching retirement, or are managing significant wealth, planning now saves your loved ones later. By taking the time to create a will, trust, and related documents, you gain peace of mind knowing your family will be cared for and your legacy preserved.

Take the Next Step

At Palley Law, I help families throughout the Chicago area create estate plans that fit their lives and protect the people they love. No matter your stage in life, the best time to plan is now—before the unexpected happens.

Schedule a consultation to start building your plan and safeguarding your family’s future.

Estate Planning for Parents in Illinois: Protecting Minor Children

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As parents, we naturally spend a lot of time thinking about our children’s future — their health, education, and opportunities. But one area many families overlook is what happens if children are left without parents before they’re adults. Who would raise them? How would their inheritance be managed?

In Illinois, estate planning isn’t just about passing on property. It’s also about protecting your children in the event of the unexpected. This guide walks Illinois parents through the key considerations when planning for minor children, from financial management to naming a guardian.

The information in this post is educational in nature, and is not to be relied upon as legal advice. Engage an estate planning attorney for help with your particular circumstances.


Why Planning Ahead Matters

Under Illinois law, children under 18 cannot legally control money or property. Even at 18, many parents feel that’s too young for a child to handle a significant inheritance responsibly. If you don’t make a plan, the probate court will step in — and that can mean added cost, delay, and decisions made by a judge who doesn’t know your family.

By taking time now to write clear instructions into your will or trust, you ensure:

  • Your children are cared for by the people you trust most.
  • Their inheritance is used for their benefit, not wasted or mismanaged.
  • Court involvement is minimized, saving your family time and stress.


Managing Inheritances for Minors in Illinois

There are several tools under Illinois law for handling money or property left to children. Which one is right for you depends on your goals and the size of your estate.


1. Custodianship Under the Illinois Uniform Transfers to Minors Act (UTMA)

One of the simplest options is naming a custodian under the Illinois UTMA. This allows your executor to transfer your child’s inheritance into a custodianship account.

  • How it works: The custodian manages the funds until your child reaches 21. The money can be spent on education, health care, or general support. At 21, whatever remains goes directly to your child.
  • When it makes sense: This is a good option for smaller inheritances or when you trust the chosen custodian to make sound decisions.
  • Downside: At 21, your child gets full control — ready or not. For larger inheritances, some parents prefer a longer timeline.

Plain English translation of typical will language:

“If a child under 21 inherits from me, the executor can put that money in the hands of a responsible adult custodian, who will use it for the child’s needs. When the child turns 21, any remaining money will go to them directly.”


2. Creating a Children’s Trust

For parents who want more flexibility, a children’s trust is often the better choice. A trust lets you set the rules instead of relying on the default law.

  • You choose the trustee. This could be a family member, close friend, or professional trustee.
  • You control the terms. You can decide how funds are used (school tuition, medical care, first home purchase, etc.) and when they’re released.
  • You set the timeline. Instead of everything being turned over at 18 or 21, you can stagger distributions. For example: one-third at age 25, another at 30, and the balance at 35.
  • You can add conditions. Some parents tie distributions to milestones like completing college or maintaining employment.

Example: A parent leaves $200,000 in trust for her two children. The trustee can use the funds for their health, education, and general well-being while they’re growing up. Once each child turns 25, they receive one-third outright; another portion at 30; and the rest at 35. This way, they have support in early adulthood but don’t receive a lump sum at an age when it might be wasted.


Naming a Guardian in Illinois

Money isn’t everything — someone also has to raise your children if you and the other parent can’t. In Illinois, you can name a guardian of the person (who takes care of the child) and a guardian of the estate (who manages the child’s money) in your will.

  • If you don’t name a guardian: The probate court will appoint one. Judges do their best, but their decision may not reflect your wishes.
  • How to choose: Think about who shares your parenting values, who your child feels comfortable with, and who is financially and emotionally able to step in. Always talk with the person before naming them.
  • Naming a backup: It’s wise to list an alternate guardian in case your first choice cannot serve.

Plain English translation of typical will language:

“If my spouse is not living, I want my sister, Ann, to raise my children. If she can’t do it, then I want my brother-in-law, Joe, to take over. I don’t want them to have to buy an expensive insurance bond to serve as guardian.”


FAQs for Illinois Parents

Q: What happens if I don’t plan at all?

A: The probate court will decide both who raises your children and how their inheritance is managed. The money may be tied up until your child turns 18, at which point it’s handed over in full — regardless of their maturity.

Q: Can I name different people to raise my kids and manage their money?

A: Yes. Sometimes the person who’s best to care for your children isn’t the best with finances. Illinois law allows you to separate those roles.

Q: What if I want to provide for stepchildren or nieces/nephews?

A: Unless they’re legally adopted, they won’t inherit automatically under Illinois law. You need to include them specifically in your will or trust.

Q: What about life insurance?

A: Life insurance proceeds can be directed into a trust or custodianship, just like other estate assets. This is an important step if you expect insurance to be a major source of support for your children.


Taking the Next Step

Every family is different. Some parents are comfortable with a simple custodianship that hands money over at 21. Others want the control of a trust that stretches distributions into a child’s thirties. Either way, the most important thing is to put your wishes in writing.

In Illinois, a carefully drafted will or trust not only protects your children’s inheritance but also ensures they are cared for by the people you trust most. It’s one of the most meaningful gifts you can leave them.

If you have minor children, the best time to plan for their future is now. Palley Law helps Illinois families create wills and trusts that protect their children and provide peace of mind. Contact the office today to schedule a consultation and take the first step in safeguarding your family’s future.