Trusts are popular among residents of Frankfort and other parts of the greater Chicago area primarily because they can keep a person’s estate out of probate and greatly simplify the process of passing along property to loved ones after the person dies.
In most cases, Illinois residents wanting to take this route will create a revocable trust, that is, a trust that they can still easily change or, for that matter, even withdraw altogether. The revocable trust allows a person to maintain control over her own property while still getting the benefits of having a trust.
However, in some cases, an Illinois resident will want to consider an irrevocable trust. As the name implies, once she sets up and funds the trust, the resident will have very little power either to change the terms of the trust or to withdraw the property.
Because they are so strict, someone may wonder why anyone would ever want to create an irrevocable trust. After all, doing so involves giving up a lot of control over property he may want or even need. There are, however, some advantages to this estate planning device. Whether an irrevocable trust is right for a particular individual is, however, a question he should take up with his attorney.
One of the advantages is that funds in irrevocable trusts may be beyond the reach of a person’s creditors. Since the property in every sense is not really his, it is hard for a lender to argue that they should be able to collect it to pay off debts.
Likewise, taxing authorities are more likely to view irrevocable trusts as exempt property not subject to taxation, and other need-based government programs may not count irrevocable trusts when determining whether a person qualifies for the program in question.