Options for how and who will carry on a legacy can be both confusing and overwhelming. There are many variables to consider regarding heirs, assets, and method of distribution. Essentially both trusts and wills serve the purpose of leaving possessions to family members, friends, and charitable entities.
One thing to keep in mind is that wills are meant to distribute assets and must go through probate before final distribution. Trusts are primarily for transferring financial assets and assigning power of attorney, which avoids probate court.
Types of Wills
The State of Illinois recognizes two categories of wills: individual and couple’s wills. Within those are further breakdowns based on purpose and longevity. It is recommended to consult a trusted estate planning attorney when choosing a will.
Statutory Wills
The most straightforward directive available for smaller estates, statutory wills are effective for naming an executor, detailing how assets are distributed, and to whom. These are more limited than other options and not ideal for larger estates.
Living Wills
Living wills include details for medical treatment and care in the event the testator becomes unable to communicate. This does not, however, include DNR (Do not Resuscitate) orders, which is a separate legal document.
Couple’s Wills
As the name suggests, these are wills for married couples, and are available as three main options. They also vary depending on purpose and longevity.
Joint Will
This is a single, shared will created and signed by both parties. Typically the surviving spouse will initially inherit all assets, then after passing, another heir or heirs will receive the estate as determined by both partners while living. The surviving spouse cannot change the will in any way at any time.
Mirror Will
Each partner has their own will that is a mirror image of the other. Both indicate the surviving partner as the heir, and the subsequent heirs after both passings. In this case, the surviving spouse is able to change the mirror will at any time.
Mutual Will
Like mirror wills, there are two separate wills that are the same; with the difference being no changes can be made by the surviving partner.
Types of Trusts
The State of Illinois recognizes three main kinds of trusts: revocable, irrevocable, and testamentary. As with wills, it is important to consult with an experienced estate planning attorney when choosing the right trust for you.
Revocable Trusts
A revocable trust, or living trust, is created by the trustor and can be changed at any time in any way. This can be updated to add more items or heirs, or to add an executor.
Irrevocable Trusts
A trustor may choose an irrevocable trust, which cannot be changed once created. This is typically recommended only for specific cases.
Testamentary Trusts
A testamentary trust is created through a will and is usually for the purpose of someone inheriting a large sum of money.
Should I Create a Will or Trust?
When researching options, consulting with investment professionals and legal advisors is always recommended. There are several factors to consider when choosing how to implement your final directives. The estate size and time of effect should be considered, as well as any long-term goals and options.
David Koch & Associates is always here to answer your questions about types of wills and trusts and how to implement them in Cicero. We are dedicated to helping you make the best decisions for you and your loved ones.
