What Is A Revocable Trust And What Is It Used For?

In estate planning, a revocable trust is a versatile tool for managing assets during life and facilitating their transfer to beneficiaries after death. This legal entity, also known as a living trust or inter vivos trust, is established during the grantor’s lifetime to hold and manage assets. Its flexibility sets it apart—grantors can change or revoke its terms if they’re mentally competent.

The Critical Advantages of Revocable Trusts

One important and key advantage of using a revocable trust is bypassing probate. Probate, the legal process for distributing deceased individuals’ assets, can be time-consuming and costly. By transferring assets to a revocable trust, they’re not part of the probate estate, expediting distribution and maintaining privacy.

Revocable trusts offer flexibility in asset transfer without court involvement, which is helpful for beneficiaries like minors or those with disabilities. Specific instructions in the trust ensure long-term financial security for them. Moreover, revocable trusts protect in case of incapacity. If the grantor can’t manage their affairs, the successor trustee steps in, avoiding the need for a court-appointed guardian or conservator.

Assets Typically Held in a Revocable Trust

When establishing a revocable trust in Illinois, individuals often wonder what types of assets are suitable for inclusion. A revocable trust can hold various assets, offering flexibility and control over one’s estate. Here’s a breakdown of the types of assets commonly placed within a revocable trust in Illinois:

• Real Estate – Residential properties, vacation homes, rental properties, and vacant land can all be transferred to a revocable trust. By holding real estate in a trust, individuals can ensure a smooth transfer to beneficiaries and avoid probate delays.
• Financial Accounts – Bank accounts, certificates of deposit (CDs), savings accounts, and brokerage accounts can be titled in the trust’s name. This allows for the centralized management and distribution of financial assets according to the trust’s terms.
• Investments – Stocks, bonds, mutual funds, and other investment assets can be transferred to a revocable trust. This transfer allows for ongoing management and potential growth of investment portfolios within the trust structure.
• Business Interests – Ownership interests in closely held businesses or partnerships can be kept in a revocable trust. This ensures the continuity of business operations and a smooth ownership transition in the event of the grantor’s incapacity or death.
• Personal Property – Tangible assets such as vehicles, artwork, jewelry, furniture, and collectibles can be transferred to a revocable trust. This provides clarity and organization regarding the distribution of personal property to beneficiaries.
• Life Insurance Policies – While life insurance proceeds typically pass directly to named beneficiaries, individuals may designate their revocable trust as the beneficiary. This allows for added control over the distribution of life insurance proceeds and can be helpful in estate planning strategies.
• Intellectual Property – Intellectual property rights, including patents, copyrights, trademarks, and royalties, can be placed in a revocable trust. This ensures proper management and protection of valuable intellectual assets for the benefit of heirs.

A revocable trust in Illinois can hold a wide range of assets, providing individuals with flexibility, control, and efficient estate planning solutions. By transferring various types of assets into a revocable trust, individuals can avoid probate, maintain privacy, and ensure the smooth transfer of assets to their chosen beneficiaries. 

Whether it’s real estate, financial accounts, investments, business interests, personal property, life insurance policies, or intellectual property, a revocable trust offers a comprehensive solution for managing and distributing assets according to one’s wishes. Consulting with one of our knowledgeable estate planning attorneys in Illinois can help individuals determine the most suitable assets for their revocable trusts based on their unique circumstances and goals.

Call Our DuPage County Asset Protection Attorney to Safeguard Your Assets!

Those considering a revocable trust can benefit from guidance from our estate planning attorneys, who have years of experience in Illinois trust law. Our firm can also provide valuable assistance in drafting trust agreements, selecting trustees, and help guide you through Illinois’ complex legal requirements. Contact our DuPage County asset protection attorney at 630-868-3093 for a free consultation. Keller Law Group assists individuals throughout DuPage, Kane & Will Counties.