A memorial trust is a special kind of trust in Illinois created to remember and honor a loved one who has passed away. This type of trust can be beneficial in preserving the legacy of someone who has died and can also provide financial security for their loved ones.
Understanding memorial trust
By definition, a memorial trust is a fund set up in someone’s name, usually by their family or friends, which is used to support a cause or charity that was important to them. The funds for a memorial trust can come from many different sources, such as life insurance policies, retirement accounts, investments or even donations from loved ones.
The named trustee will manage the money and make sure that it is used according to the wishes of the person who created it. This can include making sure that the money is donated to a certain charity regularly, educating the deceased children, paying for funeral expenses or anything else specified in the trust agreement.
Creating a memorial trust
As with all other types of trusts, the first thing you will need to do if interested in creating a memorial trust is to choose a trustee who will be responsible for managing the fund. It is important to choose someone you have every confidence in and have experience with financial matters. You will also need to create a document called a “trust agreement,” which outlines how the money in the trust is to be used.
Next, you will need to fund the trust by transferring money or assets into it. You can do this by writing a check, transferring stocks or mutual funds, or even designating the trust as the beneficiary of a life insurance policy.
Before creating a memorial trust, it is important to understand the legalities and tax requirements involved. For instance, for the trust to be valid, it must be registered with the state of Illinois. Additionally, there are certain tax implications to consider when setting up this type of trust. Like you will need to complete an information return, otherwise known as 990-PF, annually.