HRBK provides high quality legal services to businesses and individuals real estate investment trust advantages and disadvantages central Illinois. This Memorandum summarizes many basic estate planning concepts and ideas.
A review of this information should help you to better understand our future estate planning discussions. If you do not create a Revocable Trust, all the provisions for the administration and disposition of your assets will be in your Will. Like the Revocable Trust, your Will can be changed as often as you like prior to your death. REVOCABLE TRUST: A Revocable Trust is a trust to which you transfer all or part of your assets during your life, while retaining for life the right to income from the trust, the right to withdraw or add assets, and the right to revoke or amend the trust. You may be named as a Trustee or Co-Trustee of the trust, but this is not required. Because of the complete control you retain over the trust during your life, the trust is ignored for both income tax and estate tax purposes. All of the trust income is taxed directly to you, whether or not it is distributed, because you are treated as the “owner” of the trust for income tax purposes — you report all trust income and deductions of the trust on your individual income tax return.
Your social security number is used for identification purposes for assets held in the trust. ASSET MANAGEMENT IN THE EVENT OF DISABILITY. A Revocable Trust can function as a vehicle for the management of your assets in the event you become disabled and are unable to handle your business affairs. Thus, a Revocable Trust can be beneficial not only in situations where, because of sickness or injury, you are no longer physically able to attend to your business affairs, but also in the event you become “disabled” as defined under state law. Without a Revocable Trust and its successor Trustee provisions, a guardian of your estate may have to be appointed by the local probate court to manage your property. It is important to note at this point that if you have a Durable Power of Attorney for Property, you already enjoy most, if not all, of these advantages of a Revocable Trust. Your Attorney-in-Fact under your Durable Power of Attorney is able to deal with and manage your property much as a successor Trustee would, thereby avoiding the necessity of a court supervised guardianship.