Matthew S. Payne is a Schaumburg-based attorney with a 20-year record of success in civil litigation, real estate law and estate planning.

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How revocable and irrevocable trusts affect estate plans

On Behalf of | Aug 9, 2022 | Estate Planning

There are many different ways that you can choose to establish your trust in Illinois. Two of the most common methods will be to establish a revocable or irrevocable trust. Both of these types of estate plans offer a distinct set of pros as well as cons. It may require some research on your part to come to a decision as to which is best for you.

Pros and cons of a revocable trust

The first major type of estate planning arrangement is a revocable trust. This type will allow you to retain full control of your assets. It also offers you protection in case you should become incapacitated. Perhaps the biggest advantage is that it allows you a high measure of privacy. Finally, it’s a good way to help you avoid going to probate.

However, there are also a number of drawbacks that do need to be mulled over. The first is that this type of trust doesn’t offer a great deal of protection against your potential creditors. A revocable trust is also not known for providing a high measure of useful benefits when it comes to tax matters.

Pros and cons of an irrevocable trust

An irrevocable trust can also offer a unique set of advantages. You can benefit from several built-in tax reduction plans while also enjoying a higher level of protection from your creditors. You also have the ability to gain protection in case you become incapacitated. This type of trust can also help you avoid probate.

The main problem with an irrevocable trust is that it requires you to relinquish control of assets. Your flexibility within this type of arrangement is also much lower. This type of arrangement can also prove to be very complex and difficult to maintain control of.