Estate Planning: Helping Protect Your Interests

Frequently Asked Questions: Revocable Living Trust

Patrick J. Murphy

Patrick J. Murphy

What is a Revocable Living Trust?

A trust is an agreement that determines how a person’s property is to be managed and distributed during his or her lifetime and also upon death.

A revocable living trust normally involves three parties:

  • The Settlor – Also called grantor or trustor, this is the person who creates the trust, and usually the only person who provides funding for the trust. More than one person can be the settlors of a trust, such as when a husband and wife join together to create a family trust.
  • The Trustee – This is the person who holds title to the trust property and manages it according to the terms of the trust. The settlor often serves as trustee during his or her lifetime, and another person or a corporate trust company is named to serve as successor trustee after the settlor’s death or if the settlor is unable to continue serving for any reason.
  • The Beneficiary – This is the person or an entity that will receive the income or principal from the trust. This can be the settlor (and the settlor’s spouse) during his or her lifetime and the settlor’s children (or anyone else or a charity the settlor chooses to name) after the settlor’s death.

A trust is classified as a “living” trust when it is established during the settlor’s lifetime and as a “revocable” trust when the settlor has reserved the right to amend or revoke the trust during his or her lifetime.

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Illinois Changes Its Power of Attorney Laws

Patrick J. Murphy

Patrick J. Murphy

The revised Illinois Power of Attorney Act, 755 ILCS 45/2-1 et seq. provides greater protection to principals. These revisions are designed to minimize abuses of the elderly, incapacitated and disabled persons by their agents serving under powers of attorney. House Bill 6477, the new state bill containing the changes, was passed by both houses and signed into law by Governor Quinn on July 26, 2010. The effective date for the changes is July 1, 2011. All powers of attorney which were validly executed prior to this date will continue to remain effective.

A few highlights of the changes to this Act are: Continue reading »