Creating an estate plan in Illinois can seem like a daunting process. Many people do not like to think about or discuss the issues around estate planning, so one big hurdle is that they may not know the difference in estate planning, writing a will and creating a trust.
Estate planning is the overall process of taking steps to make sure your assets go to the people you intend them to, providing for dependents and making plans for someone to take over your legal, financial and health care decision making in case you are incapacitated. There may be a number of different estate planning documents, including a will, a trust, beneficiary designations, and powers of attorney.
A will is the estate planning document that people tend to be the most familiar with and is the one document nearly everyone needs. You can use your will to appoint a guardian for your children and identify an executor, the person who is responsible for distributing assets and completing any paperwork related to your estate. Wills usually have to pass through a legal process called probate.
Trusts are complex documents that can be used in a number of different ways. They can protect assets from creditors and pass them directly to loved ones without going through probate among other functions. You can use a trust to help family members who have special needs or to provide for both your family and a charity. A trustee may manage a trust and make distributions to beneficiaries based on your instructions.
Knowing the basics of estate planning can help you start on the process of creating documents that will protect you and your loved ones. Your relationships, the nature of your assets and tax law will all affect how you approach it.