Differences between Revocable and Irrevocable Trusts in Illinois

 Posted on May 17, 2024 in Estate Planning / Probate

When you sit down to think about how you want your finances and assets organized to benefit others when you are no longer alive, you might feel overwhelmed by all the new information you find. Most people are familiar with the concept of a will, but when the time comes to put your affairs in order, you learn that there are many estate planning options available. For example, if you want to arrange for your assets to be put into a trust, you can do so in a revocable trust and an irrevocable trust. This article will explain some differences between the two, but if you think you are ready to start making these kinds of arrangements, let a knowledgeable Kane County, IL estate planning attorney advise you.

What Are Revocable Trusts?

Otherwise known as “living trusts,” a revocable trust is not set in stone. You can modify or revoke it if you feel the need. This is an attractive option for people who want to start making an estate plan but expect some changes in the future.

What Are Irrevocable Trusts?

If you set up an irrevocable trust, you will not be able to modify or revoke it. There are a few reasons why you might want to choose this option:

• Taxes: Sometimes, there are financial benefits to placing your assets in an irrevocable trust, which is often not subject to gift or estate taxes.
• Asset protection: Potential creditors have no claim to any assets that are placed inside an irrevocable trust. Since the assets are owned by the trust rather than the person who made the trust, any creditors with claims against you would not have any legal ground for seizing anything you leave behind in this kind of trust.
• Greater benefit to disabled adults: People with disabilities are sometimes eligible for government benefits. These benefits can be revoked if that person comes into significant resources, for example through an inheritance. However, irrevocable trusts do not impact a disabled adult’s eligibility to receive government benefits, so they will not suffer any negative consequences.

Schedule a Free Consultation with a Kane County Trust Attorney

If you are beginning to think about estate planning, let an experienced Geneva, IL trust lawyer help you weigh the pros and cons of all the options available to you. Depending on who you wish to leave assets to or the expectations you have for your financial future, some options might be better choices for you. At DLAW, PC, clients are treated with respect and dignity as they embark on this journey of planning for the future. Call 331-222-7978 to schedule a free consultation so we can work together on creating a plan that is uniquely tailored to you.