Families in Illinois beginning the estate planning process face a crucial decision: do you leave assets to loved ones in a traditional will, or create a trust to hold and distribute your assets?
The choice carries significant ramifications on how assets will be distributed. Ultimately, it’s a choice between probate vs trust settlement.
Each of these settlement methods is fully capable of distributing the assets of the deceased, however they differ significantly in the amount of time, cost, and level of privacy that each method provides.
While there is no right or wrong answer, the best decision for your family will likely hinge on the size and value of your estate, and a few other personal preferences.
In this guide, Hays Firm, a respected Chicago trust and probate administration law firm, will walk you through the key differences between probate vs trust settlement in Illinois, including who each method is best for, so you can understand the pros and cons of each before making a decision for your estate.
Key Probate vs Trust Differences in Illinois
Understanding how each process works is critical in weighing the pros and cons of probate vs. trust administration in Illinois:
Understanding the Process of Probate Administration
Probate is the legal process of validating and administering a will. Under the Illinois Probate Act, probate is required for estates that own at least one piece of real estate, or have total value of personal property exceeding $100,000. Probate is also mandatory in the event that no will, trust, or estate plan was left.
When a will is left behind, it names an executor to the estate. This is the person who is responsible for settling the decedent’s (the deceased) affairs—most notably settling the estate’s outstanding debts and distributing assets.
Only after the unpaid bills, credit cards, loans, etc. have been fully repaid can the executor move on to notifying the heirs and beneficiaries, and distributing the remaining assets according to the will.
In Illinois, the entire probate process is overseen by a judge, and can be either supervised, requiring direct oversight of each step in the probate process, or unsupervised, where the executor is permitted to carry out their responsibilities with minimal supervision.
The Cons of Probate
A key factor to remember when considering a traditional will is that none of the probate process happens overnight.
Probate is time-consuming, and can take anywhere from six months to a year for a modest estate. Larger estates can take a year or longer to pass through probate. There are also administrative fees that must be paid to the probate court, as well as to the executor, which can become quite significant over this time frame.
Another important consideration is that probate is a matter of public record. If privacy is at all important to you and your family, remember that everything that transpires in the probate proceedings becomes public knowledge. That includes your estate details like the specific assets and financial numbers, which could potentially lead to unwanted attention from creditors and other predators when significant sums of money or business ownership stakes are involved.
The Advantage of Probate
While probate may initially seem like a disadvantage, there are some benefits.
The supervision of the court is essential when family disputes arise over the distribution of assets. Challenges become increasingly more likely the larger the estate is. Probate can effectively settle these disagreements, and minimize family infighting.
The probate system also serves to keep the executor honest. If there are signs that the executor is not settling the estate’s affairs in a timely manner, or is distributing assets against the terms of the will, or is seeking to profit from the estate themselves, their executorship can be challenged and potentially revoked.
If you do decide to leave a will, working with an Illinois probate lawyer can ensure the process is handled smoothly for your family.
Understanding Trust Administration and Settlement
When trying to understand probate and trust differences in Illinois, the biggest takeaway is that by establishing a trust, you can completely bypass the probate process.
That is because forming a trust creates a specialized legal document designed specifically for asset management and distribution.
The most common type of trust is known as a revocable living trust. It includes three roles: the grantor (or trust maker), the trustee, and the beneficiary.
Most often the trust maker fulfills all three roles during their lifetime. They place or “fund” the trust with their assets, which the trustee manages. The trustee manages the assets during their lifetime, and when they become incapacitated, pass away, or choose to no longer manage the trust, a designated successor trustee steps in to settle the estate.
A key distinction here is that the assets placed into the trust are re-titled into the name of the trust during the trust maker’s lifetime. Without this key procedure, the trust loses its effectiveness.
The Advantages of a Trust
A major advantage when comparing probate vs trust administration in Illinois is that a trust completely bypasses the need for probate court.
That means first and foremost that you are fully in control of who will handle the distribution of your assets, with no judge to oversee the process.
That doesn’t mean there are no responsibilities. The trustee must still settle the estate’s taxes and debts before distributing assets, but it also means that the estate avoids the fees inherent in probate court.
It also makes the trust settlement process far quicker than probate. Without the need for court oversight, deadlines, and approval, heirs can begin to receive their inheritances in a matter of weeks, not months.
Trust planning also allows the grantor to leave more specific instructions for how assets are to be distributed. For example, it’s far easier in a trust to leave certain inheritance requirements for heirs, such as withholding funds until they reach a specific age, or achieving a milestone such as college graduation.
Lastly, one of the biggest advantages of trust administration vs probate in Illinois is that the process remains 100% private. With no public probate process and no public record, your family’s privacy is assured. Even amongst other family members, the distributions remain confidential, which can prevent disputes and jealousy.
Cons of a Trust
Despite the advantages of trust administration vs probate in Illinois, is establishing a trust the right decision for everyone?
Not always. It will depend entirely on your specific financial situation and a few other factors.
One of the biggest potential hurdles in setting up a trust is the initial setup cost. Establishing a trust and funding it requires higher upfront costs than a standard will. A trust also requires ongoing administration, but is often minimal for revocable living trusts. A will on the other hand offers a much lower cost of entry. For families with modest estates, a will is often a more cost-effective option.
Funding the trust with physical or liquid assets also means that you give up direct ownership of these items, transferring control to the trustee. If you remain the trustee during your lifetime, this eases the concern, but it is still something to consider.
Without court oversight, you are putting all the responsibility on yourself as the trustee, or someone you choose to be the successor trustee, to manage all the administrative duties directly.
However, choosing to work with an Illinois trust settlement attorney like Hays Firm can significantly lessen the burden of these responsibilities.
How Can an Illinois Probate Lawyer or Trust Settlement Attorney Help?
When you’re just beginning the estate planning process, consulting with an Illinois probate lawyer can help you determine whether a will or a trust is the most appropriate form of estate planning for your needs.
An attorney with specialized expertise in estate planning, probate, and trust administration specific to Illinois is essential, as they can help you evaluate your personal goals and needs so you can make the best decision for your estate plan.
Aside from the initial setup, there are a few instances when working with an Illinois probate lawyer is beneficial:
- Midsized or Larger Estates: When your estate is worth more than $100,000, or includes one or more real estate properties in your name, a probate administration lawyer can help you manage distribution of complex assets.
- Will Disputes: When a dispute arises around distribution between heirs, or there are claims of undue influence or other serious allegations, an Illinois probate lawyer can represent the estate’s interests.
- Executor Help: The role of executor carries many responsibilities, which can be overwhelming. A probate administration lawyer can help with the required court filings, paying off debts and taxes, taking inventory of assets, and other duties required.
If you decide to form a trust for asset management and distribution, an Illinois trust settlement attorney can help in these areas:
- Avoiding Probate: Trust administration involves significant responsibilities. An Illinois trust settlement attorney can help manage them properly when bypassing probate.
- Managing Complex Trusts: Some trusts require specific provisions for minors or special needs beneficiaries. A trust settlement attorney can help you structure these according to your wishes.
- Trust Related Disputes: When there is suspicion of fraud, undue influence, or trustee mismanagement, trust settlement attorneys represent the estate’s interests and handle any potential litigation.
Hays Firm: Illinois Probate Lawyer and Trust Administration Attorneys
For many modest estates, a will that goes through probate will cover all your needs at a lower cost than a trust. But when the estate holds significant properties and assets, establishing a trust and working with an Illinois trust settlement attorney is often a better choice to meet your family’s needs.
Choosing an estate plan often boils down to probate vs trust settlement. To make the right decision for your family, consider getting advice from an experienced Illinois probate lawyer.
Since 2008, Hays Firm has helped guide families in Chicago and Cook County through the process of probate and trust settlement. We understand the Illinois probate and trust systems inside and out, and offer tailored advice to our clients to help them choose the best structure for their needs.
It’s never too early or too late to begin thinking about your family’s future. Contact Hays Firm today to schedule an initial consultation regarding trust and probate administration and settlement, and let us guide you towards a future that ensures your family’s financial future.
**Disclaimer**
The content of this blog is for general informational purposes only, and does not constitute legal advice. Please consult with a qualified attorney or lawyer for advice specific to your situation.
