Establishing a trust can be one of the best ways to protect your assets and ensure that the people you want to leave your property to receive the items you want them to. You’re able to clearly outline who receives what as long as the items they’re inheriting are placed in the trust. Unfortunately, not all assets can be placed in a trust, and your Illinois estate planning attorney wants you to understand how you can use this tool to your advantage. Let’s take a look at what you can use your trust for and what you can do to protect the rest of your assets.
The Assets You Can’t Place in a Trust
Trusts are incredibly versatile and can be used to protect many different assets. But some cannot or should not be added to your trust. This includes assets like:
- Health savings accounts: These accounts let you use your contributions toward medical expenses without having to pay tax on the money you put in the account. The accounts typically let you name a beneficiary and cannot be added to your trust.
- Retirement accounts: Unfortunately, you’re not able to add retirement accounts to your trust. Instead, your named beneficiaries will inherit the funds in the way you outline with your retirement account administrator.
- Vehicles: You can place vehicles in your trust, but you don’t have to. Most vehicles are not subject to the probate process and pass to your chosen heirs when you pass away. Keep in mind that collectible vehicles may benefit from being placed in a trust.
- Assets in foreign countries: In most cases, you’re unable to add assets held in foreign countries to your trust. This may include assets like real estate in a different country, foreign bank accounts, and other similar assets.
Your Illinois estate planning attorney will review your estate and your assets to help you identify the assets you can’t place in your trust.
What You Can Place in a Trust
Trusts can house most types of assets. Some common examples that many people choose to put into trusts include:
- Bank accounts
- Your home
- Insurance policies
- Cryptocurrency
- Collectibles
- Artwork
- Heirlooms
- Investments and investment accounts
By placing these items into a trust, you’ll avoid the hassle of probate and can ensure that your loved ones receive the assets you want them to.
What to Do to Protect Your Entire Estate
Ultimately, trusts are an estate planning tool that you can use when the situation calls for it. But that doesn’t mean they’re capable of protecting your entire estate. You’ll still want to create a comprehensive estate plan to ensure that everything is protected and planned for.
While every estate is different, you’ll typically want to do the following:
- Update your beneficiaries: Any account that you can’t add to your trust should have a clearly established beneficiary named on the account. Be sure to review your beneficiaries and make any changes as needed.
- Create a will: If you don’t already have a will in place, be sure to create one. This document can help you outline your final wishes and gives you a chance to share how you want the assets not held in trust to be managed and distributed. This is a living document, and you’ll need to review it regularly to make sure all of your assets are covered.
- Establish power of attorney: Trusts can’t dictate who will be in charge of your health and finances if you’re unable to make decisions on your own. Be sure to establish medical power of attorney and financial power of attorney as part of your estate plan.
Your Illinois estate planning attorney can help you create and maintain a comprehensive estate plan that protects your interests and your assets.
Schedule a Consultation Today
If you’re interested in a trust, your first step should be to speak with an Illinois estate planning attorney. At Legacy & Life Law Firm, our team is here to help. Contact us today to schedule a free consultation.