In this Elder Law Minute, Paige Fox explains why revocable living trusts aren’t just for the wealthy—they help avoid probate.
Video Transcript:
Hi. My name is Paige Fox. I’m a Senior Associate attorney here at Dent Coulson Elder Law. And I understand these topics are very complex, so I’m hoping these Elder Law Minutes can bring some insight and some more understanding to both potential clients and current clients. Thank you.
Today we are here to talk about revocable living trusts. I often come across individuals who think that a living trust is something just for “rich people,” and that is what we’re here to talk about today. Living trusts are not—no longer just for rich people. And in fact, anybody who has real property is oftentimes recommended that they do have a living trust.
The reason for that being that any time you have real property and there is no transfer on death instrument, upon somebody’s passing, that real property goes into probate, which is a timely and expensive process. And so in order to avoid probate, the best way to do that is to put your assets into a revocable living trust.
Within revocable living trusts, there are a couple different types, and this is really where it depends on the type of assets you have and the amount of money that you have. For example, a family or joint living trust would be a living trust where two spouses have all of their assets combined and put into one revocable living trust.
There is also individual living trusts, so each spouse has their own revocable living trust. And the reason for this would be if you are anywhere near the estate tax limit in Illinois, which is 4.5 million right now. There has been discussion of going up and down with that, but as of right now, that’s where Illinois is at. And since it’s way below the federal estate tax limit, oftentimes we will have spouses split their assets into two living trusts in order to avoid the estate tax limit in Illinois.
There are other types of living trusts that are more associated with “being rich,” but those are things like irrevocable living trusts or credit shelter trusts and that type of living trust.
But overall, generally, I would say that anytime that real property is involved, it’s definitely at least something that you should consider is doing a revocable living trust instead of just the standard will or last will and testament.
If you are looking to do estate planning, whether it’s a last will and testament or a living trust or any other type of estate planning, please feel free to reach out to Dent Coulson Elder Law. Thank you.
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