A comprehensive estate plan can be as simple or as complex as your needs warrant. For most people, the foundation of any estate plan is a Last Will and Testament. If you are young, single, and without significant assets you may not need more than a Will at the moment. As you age, however, and your family and finances change you will likely add to your estate plan. One of the most common additions to an estate plan is a trust. How long it takes to set up a trust depends on a number of factors such as the type of purpose of the trust, the type and complexity of the trust assets, and the number and complexity of the trust terms.
A trust is a legal arrangement that allows you (the Principal) to appoint a third party (the Trustee) to manage and guard assets for the benefit of one or more beneficiaries. Trusts have gained in popularity over the past several decades because of their flexibility and the numerous tax and estate planning benefits they offer.
The purpose of your trust will usually determine the type of trust you establish. If your goal is to provide for the family dog after your death, for instance, you will create pet trust. If your intended purpose is to gift to charity and your children, you might create a charitable lead or charitable remainder trust. Deciding which type of trust you need is the first step and will go a long way in determining how long it will take to set up the trust.
Next, you need to decide how the trust will be funded. A trust funded with cash is much easier to set up than a trust funded with complex assets such as a business, securities, or real property. Anything but cash will need to have the title or ownership documents changed to reflect the trust as the new owner. This can extend the time needed to set the trust up.
Finally, you must create trust terms. A pet trust with terms that are no more complex than deciding when to feed the dog and what type of dog food is to be used is clearly easier to set up than a charitable remainder trust that involves gifting to more than one type of beneficiary and involves value assets that are to be gifted over many years.
The key to successfully drafting any trust agreement is to work with an experienced Illinois estate planning attorney throughout the process.
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