A Revocable Trust is a type of trust that you create during your lifetime. A Revocable Trust is called “revocable” because it can later be amended (changed) or revoked (taken back). A Revocable Trust is created by making out and properly executing a trust document.
Once the Revocable Trust is created, it becomes an entity (person) separate from you, and it can hold your property – i.e. your real estate (your house and/ or land) and your personal property (the money in your bank accounts and your other stuff) – for your benefit and/ or the benefit of your family.
Property transferred to your Revocable Trust is held in the name of the Revocable Trust, but is – generally – managed the same way as if it was still in just your name.
For instance, during your lifetime, you will not need to obtain a separate tax ID# or file a separate tax return for your Revocable Trust.
Unlike a Will, a Revocable Trust has the advantage of being able to be used to manage your property for your benefit and the benefit or your family in the event of your disability.
Also: In Illinois after you pass away, if you own real estate (a house and/ or land other than in joint tenancy) or your personal property (the money in your bank accounts and your other stuff – like stocks, bonds, corn or beans in the elevator or on the farm) is worth more than $100,000, even if you have a Will, someone (usually a relative) will have to open a Probate Case for you in order to pay your debts and distribute your property.
If you have a Will, the Court will appoint the person you have chosen to be Executor of your Estate to manage your Estate. The Executor will prepare an inventory (list) of everything in your Estate, pay debts against your Estate, and distribute the balance of your Estate to the people you have named in your Will. As you might expect, all of this takes and inordinate amount of both time and money.
If, however, you created a Revocable Trust and you transferring all of your real estate (your house and/ or land) and the majority of your personal property (the money in your bank accounts and your other stuff) so that your total Estate is worth $100,000 or less, it is possible that all of your property could be distributed to those you name in your trust simply and easily – without spending the time or money necessary in a Probate Case. And you should also know that setting up a revocable trust costs only little more than a Will.
Of course, if you choose to Create a Revocable Trust, it is best to also have a companion simple Will that transfers your Estate to your Revocable Trust for distribution according to the instructions in the trust – just in case you forget to do that while you are alive.