Types of Living Trusts

 Posted on May 20,2013 in Estate Planning

A living trust is a trust that is created and operated during the grantor's lifetime. There are two different types of living trusts. The first is a basic living trust, which can be used for an individual or a couple. Second is a living trust with marital life estate, or an AB trust. After the grantor's death, a basic living trust allows your property to avoid probate and pass to your beneficiaries quickly and efficiently. It is used to avoid probate. Probate is "the official proving of a will," according to Wikipedia.com. To create a basic living trust, you have to transfer some or all of your property to the living trust. You instill yourself as the trustee so you won't be giving up any control over your property. If you and your spouse create the trust together, than you will be co-trustees. After your death, the person who was named in the trust document will transfer ownership of the property to whomever you declared in the trust. An AB trust should only be considered if you own property that is worth $650,000 to $1 million worth of property. If you don't establish a living trust, there may be a big estate tax bill after you die. An AB trust lets you pass the maximum amount of property to your beneficiaries after you or your spouse dies. Each spouse leaves most or all of their property to a "marital life estate trust." When one spouse dies, the other spouse can use that property, but won't own it. When the second spouse dies, the property will not have to pay an estate tax because the second spouse never owned it. If you or anyone you know is thinking about establishing a living trust, be sure to contact a lawyer. Call an experienced Illinois Estate Planning Attorney.

Image courtesy of koratmember/Freedigitalphotos.net