If you’re an Illinois resident looking to protect your assets or secure them for your beneficiaries, you may want to consider creating a trust. A trust is an arrangement that helps you direct the use of your assets after your death or incapacity and has many other functions, as well. You might not know what type of trust you need and what to look out for when choosing one. Following are the different types of trusts that you may consider.
Revocable living trusts
A revocable living trust is a type of trust that can be created during your lifetime. It allows you to control how your assets will be distributed after your death and can be revoked or changed at any time. This type of trust is often used to avoid probate, an often lengthy and expensive process.
Spending or discretionary trusts
A spending or discretionary trust gives the trustee discretion over how to spend the trust’s money. This can be helpful if you want to make sure your loved ones are taken care of, but you don’t want to micromanage how they spend the money.
A children’s trust is a type of trust that is set up for the benefit of minor children. The trustee manages the assets in the trust for the benefit of the children until they reach adulthood. Children’s trusts can do things like fund education and provide for health and medical expenses.
An irrevocable trust is a type of trust that cannot be modified or terminated by the grantor without the permission of the beneficiaries. People usually set up this type of trust to both help protect their assets from creditors and minimize estate taxes.