Trusts are not one-size-fits-all. The time required to create a trust depends on the type of trust and the parties creating and benefiting from it. If a situation is very straightforward, setting up a trust might take only a few days. However, trusts created for particular purposes may take weeks or even months to complete.
Trusts are often used in estate planning because they can legally own property and can transfer assets to beneficiaries without court involvement. Trusts are also handy when there is a need for ownership separation to achieve a financial benefit or provide economic benefits to others.
The Chicago estate planning attorney at Plan Forward Legal composes all types of trusts used in estate planning. She has found that strategic preparation and understanding a client’s goals make trust-building less prone to setup delays.
Getting Started with a Trust in Illinois
Trusts are generally created to serve a specific purpose. A trust’s purpose may affect how long it takes to prepare the documents. Consulting an attorney who has experience creating estate planning trusts is the most efficient way to learn exactly how long it will take to set up your trust.
Trusts are created to hold and often protect property. The trust terms will specify whether the trust is revocable or irrevocable. The purpose for creating the trust determines whether the trust creator (grantor) retains ownership control over trust property (revocable) or relinquishes all ownership interest (irrevocable).
A common type of revocable trust used for estate planning in Illinois is a living trust. Living trusts can transfer property at death like a will, but do not require court supervision, making them a popular will alternative. Property must be titled in the trust’s name to make the trust a legal owner; however, the grantor retains full ownership and control during their lifetime.
An irrevocable trust requires a grantor to relinquish ownership control of trust property. In exchange, the grantor receives some financial benefit or is able to provide financial benefits to others. Irrevocable trusts often continue after a grantor’s death and can terminate upon the happening of an event, such as the death of a beneficiary.
Trust setup times will be affected by the type of trust to be created, the trust’s purpose, and how quickly property can be transferred to the trust.
Legal Formalities Required for Setting up a Trust
Trusts are legal entities and must be created and executed in a certain way to be valid. Illinois law establishes the requirements to create a valid trust.
The following basic conditions must be met to create a valid trust in Illinois:
Legal Capacity
A person must possess certain mental capacities to create a trust. They must understand what the trust is for. They must know the extent of their property and comprehend the effects of their decisions regarding property distribution. A person under 18 years of age does not have legal capacity to execute a trust.
Clear Intent
The grantor must use specific language evidencing the intention to create a trust. Grantors should also be clear about what they intend to accomplish with the trust. When the language is vague or ambiguous, a trust is more vulnerable to legal challenge and possible frustration of the grantor’s intentions.
Trust Property
A trust must own property. If a trust is created to hold a specific asset, such as a house, the grantor must transfer title to the property to the trust. Merely listing the property to be transferred in the trust document is not legally sufficient to transfer ownership of the asset to the trust.
Identifiable Beneficiaries
The persons or entities that the trust is to benefit must be clearly identifiable from the trust language. Specific names are not necessary as long as the members of a named group, such as grandchildren, are easily recognized.
Properly Signed
Technically, a trust is valid under Illinois law if signed only by the grantor. However, to ensure the trust can legally transfer all trust property and to strengthen its acceptance by other interested parties, such as financial institutions, it is recommended that a trust be signed in the presence of witnesses and notarized.
Failure to comply with one or more legal requirements for creating a trust can disrupt the setup process. In addition, trusts not created in compliance with the laws are subject to legal challenge by interested parties, such as beneficiaries or heirs.
Why There May be Delays in Setting up Your Trust
Setting up a trust starts with identifying the problem that can be solved using a trust. The more complex the situation, the more likely it is that trust setup could be delayed. Goals must be established and decisions made. Information is gathered, and then drafting begins. Drafts must be reviewed and, if necessary, revised. When everyone agrees, it’s time to sign the document.
When setting up a trust, any of the following events could be reasons for extending the setup process:
- Concern over whether the trust can legally accomplish its intended purpose
- Vague or unclear language in the trust document
- Uncertainty as to who will manage the trust (trustee)
- Uncertainty about who will benefit from the trust
- Inability, failure, or unwillingness to transfer property to the trust
Many issues that can delay setting up a trust can be avoided with thoughtful preparation and a clear understanding of the trust’s purpose.
Plan Forward Legal Won’t Keep You Waiting for Your Estate Planning Documents
Deciding to create an estate plan is a big step, and people may feel a bit nervous about getting their documents completed as quickly as possible. Most estate plans, including trusts, can be completed within days and certainly within a couple of weeks unless there are unusual circumstances.
When you work with Chicago-based Plan Forward Legal, you won’t ever wonder what’s taking so long. We will prepare your documents efficiently and complete your estate plan with minimal setup delays. We will keep you in the loop throughout the entire process, so you know exactly what to expect. We are committed to providing an exceptional client experience. How can we help you?
