Steps to Set Up an Illinois Trust After Divorce

Many families can benefit from a trust, but after a divorce, setting up a trust becomes especially important for several reasons. You might be wondering, though: what are the steps to setting up a trust, and what does it actually involve?

There are a few steps involved, but it all starts with a consultation with an experienced estate planning attorney. If you’ve gone through a divorce, you may want to consult with an attorney who is also familiar with the transitions involved in family law. Fortunately, this is what we offer at Diamond Legal – our family law and estate planning divisions are housed right down the hall from each other.

When you consult with one of our estate planning attorneys, we’ll review your existing plan (if you have one), suggest necessary amendments, and if necessary, help you create a new plan that aligns with your new goals.

If you would like to speak with a Diamond Legal attorney, click the button below to contact our office. A friendly team member will take your information and get you scheduled quickly with an attorney. During your free consult, we’ll listen to your story, answer your questions, and work with you to create an estate plan strategy that best fits your needs.

Once you meet with your attorney and determine a plan of action, our team will send you a letter of engagement and invoice. Once those are signed and paid, our team will help you schedule a design meeting with one of our attorneys to review the details on the items you want to place into your trust as well as any other information they may need. 

After your design meeting, our legal team will get to work drafting your trust and any other documents you may need. Usually, this process only takes 2-3 weeks – and once it’s complete, we’ll contact you to set up an appointment to sign the paperwork.

At that appointment, we’ll explain all of the documents you need to sign to create your trust and make sure that they are signed correctly.  After the documents are signed, our team will work on transferring your real estate into your trust.

Once we have your home (or real estate) transferred into your trust, we will provide you with a binder that includes all of your documents as well as planner pages that you can fill in at your convenience. When any part of your estate plan needs to be put into action, your family or trustee can quickly access it. 

That’s all there is to it!

But you might still have some questions, such as “what is a trust, and do I need one?”. We’d like to answer them below.

Protecting Your Assets

Trusts are something that many people have heard of, but few really understand. This is totally understandable – there are a lot of different types of trusts, and they can be used in different ways. 

One of the most common things a trust is used for is to protect a person’s assets, both from the probate process and from a distribution plan that goes against your wishes. Probate is a long process (several months to over a year), and it can be quite expensive; through a trust, you can pass along assets like your house, financial and retirement accounts, and other assets without the courts having to be involved.

However, a trust can also save your family from unnecessary estate taxes. In Illinois, estate taxes work on a graduated schedule; your estate planning attorney and your tax professional can explain more about how (and if) this will affect you specifically.

When you place your assets in a trust, they are placed in a legal “container” that you control while you are alive. If you were to pass away, that container (and everything in it) is immediately passed to the person you choose as your trustee.

It can help to think of a trust like a suitcase that you carry with you. While you’re alive, you can place whatever you like in your suitcase, and you control what’s done with it. After you pass away, your trustee can pick up your suitcase and take action according to the instructions you’ve left. No court involvement or probate process is needed. 

It’s a simple but effective way to protect your assets – and to protect your family from a long, drawn out, and expensive court battle.

Protecting Your Children’s Interests

If you have minor children, it’s essential to protect their welfare and their future interests. If your children are already adults, you may wish to plan out the distribution of your estate so that family members don’t end up fighting over various assets. A trust can help you do both.

Through a trust and other documents in your estate plan, you can take care of both long-term planning and measures to be taken in the case of an emergency.

For long-term planning, a trust can help you anticipate things like your minor children’s day to day needs, education and health expenses, any special milestones you want to celebrate, and ways to help your children with major purchases, like a house or a semester overseas.

In an emergency though, a trust can also be quite useful. If you pass away or are incapacitated, you can instruct your trustee to release funds to take care of a medical or other emergency. In your estate plan, you can also include guardianship documents to make sure your children are cared for by a person of your choice, should an emergency or death occur. This can potentially help you bypass DCFS (or family services) being called in to temporarily care for your children, should something like a car accident or other unanticipated event occur.

Lastly, it may be important to you to make sure that your assets are transferred to your children or (if they are not yet adults) someone you trust rather than to your ex-spouse. If your beneficiaries and estate plan documents aren’t updated after your divorce is finalized, this can become an issue. A Diamond Legal estate planning attorney can help you make sure everything is in place and correct after the transition of divorce.

DISCLAIMER: Any information contained herein is solely for informational purposes and is only applicable in the state of Illinois.  While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, we urge you to contact a local attorney for advice pertaining to your specific legal needs.