Lombard trusts attorneysA trust is an estate planning tool that can hold property for the benefit of beneficiaries. There are many different types of trusts that can serve a wide range of purposes. Trusts fall into two main categories: revocable trusts and irrevocable trusts. A revocable trust is created by a grantor during his or her lifetime and may then be modified or revoked at any time. Irrevocable trusts, on the other hand, cannot be charged or revoked after their creation. However, there are certain situations in which an irrevocable trust can be modified or terminated.

Benefits of an Irrevocable Trust

Many people choose to use a trust to transfer assets to a beneficiaries instead of a will. The person who makes the will, called the grantor, transfers property to the trust and designates a trustee to manage the trust. Once the grantor passes away, the assets held by the trust are distributed to beneficiaries. The beneficiaries of a trust may be family members, friends, or entities such as nonprofit organizations. When the grantor transfers assets to an irrevocable trust, he or she relinquishes control of these assets and the assets are now owned by the trust. Because the assets are no longer owned by the grantor, they no longer influence the grantor’s tax liability or the value of his or her estate. Irrevocable trusts also offer protection from creditors and lawsuits.

Modifying an Irrevocable Trust

There are only a few different ways that an irrevocable trust may be modified or revoked. The trustee or beneficiary of a trust may petition the court to request a trust modification or revocation. The Illinois Virtual Representation Statute allows certain trustees and beneficiaries to alter an irrevocable trust without having to go through the court. The easiest and most straightforward way to change or revoke a trust is for the grantor and all potential beneficiaries to agree to the change and sign a consent modification document. A grantor may also be able to petition the court to revoke a trust based on mistake. For example, if there is evidence that the grantor was told that the trust would be revocable, the court may allow the trust to be terminated.

Contact a Lombard Trust Lawyer

Modifying or terminating an irrevocable trust is a challenging legal process that will require guidance from an experienced attorney. For help establishing a trust, modifying an existing trust, and other estate planning needs, contact A. Traub & Associates. Call us at 630-426-0196 today and schedule a confidential consultation with a skilled Illinois estate planning attorney.

 

Sources:

https://www.investopedia.com/ask/answers/071615/what-difference-between-revocable-trust-and-living-trust.asp

http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=4001&ChapterID=61