A trust is a legal arrangement in which a trustee holds and manages property for the benefit of the beneficiary. With a living trust you are both the trustee and beneficiary during your lifetime.
This tool offers flexibility, privacy, and the potential to simplify the management and distribution of your assets — but it’s not the right fit for everyone.
Like all content on this website, this article is informational in nature, and is not to be relied upon as legal advice. Retain an attorney for counsel specific to your situation.
Palley Law provides prospective clients an initial consultation at no charge.
What Is a Living Trust?
You create a living trust (also known as a revocable trust) during your lifetime and can change or revoke it at any time while you’re still alive and mentally competent. Any assets you place in the trust will be distributed according to the instructions in the trust and will not be subject to probate. You typically serve as your own trustee and beneficiary during your life, which means you maintain full control over the assets you place in the trust.
What Is a Living Trust Used For?
You can use living trusts to:
- Avoid probate at death
- Plan for incapacity by naming a successor trustee
- Maintain privacy, since trusts are not public like wills
- Provide for minor or dependent beneficiaries
- Simplify management of assets, especially if they are held in multiple states
How Is a Living Trust Set Up?
To create a revocable living trust in Illinois:
- An attorney drafts the trust document, naming you as trustee and setting out your instructions.
- You name a successor trustee to manage your assets if you become incapacitated and distribute assets without having to go through probate.
- You fund the trust by retitling your assets (e.g., real estate, bank accounts, investment accounts) in the name of the trust.
This last step — funding the trust, i.e. retitling your assets to the trust — is crucial. A trust that isn’t properly funded won’t avoid probate.
What Happens to Trust Assets During Life and at Death?
Think of a living trust as a container that you put assets into.
During your lifetime, you can buy, sell, and use the assets in the trust just as you normally would.
At your death, the successor trustee takes over and follows the instructions in the trust. Unlike a will, there’s no court involvement (probate) for trust assets. The trustee can distribute assets quickly and privately without the delay and expense of probate court.
Pros and Cons of a Living Trust
✅ Pros
- Avoids probate, saving time and costs
- Maintains privacy, since it’s not a public court record
- Provides continuity if you become incapacitated
- Flexible — can be changed or revoked any time
- Can reduce the risk of family disputes or delays in asset distribution
⚠️ Cons
- Upfront cost is higher than a simple will
- Requires ongoing attention to ensure assets are properly titled
- Doesn’t protect assets from creditors or nursing home costs (unlike certain irrevocable trusts)
- Still requires a pour-over will to catch any unfunded assets
Palley Law Invites You to Consult
A revocable living trust can be a powerful tool in an estate plan, especially for those who want to avoid probate, keep their affairs private, or plan for incapacity. However, it’s not a one-size-fits-all solution. Palley Law provides prospective clients an initial consultation at no charge
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