In this article...
In this article, we will explain the process for revoking a living trust in Illinois, including “Can I Revoke my Trust?”, “Why Revoking a Trust?”, Steps to Revoking a Trust and Alternatives to Revoking a Trust. For more, you can read our article explaining trusts in general: What Is a Trust?
Many people when making an estate plan decide that a trust is there best option. Trusts are increasingly popular for the amount of control and protections trusts offer as well as potentially lowering estate taxes compared to a traditional will without a trust. For more on the benefits of having a trust see our article “Should I have a Will or a Trust?”
Can I Revoke my Trust?
As trusts are becoming more and more popular, it is important that those considering trusts are aware of their options, especially concerning the revocability of trusts. Not all trusts are revocable. Fortunately, it is easy to tell the difference between the two options: revocable living trusts and irrevocable living trusts.
With an irrevocable living trust, you must be confident and comfortable with your choices as you will not be able to revoke your trust after it is completed. This option is sometimes preferred for the extra asset protection and lessened taxes, but it may be highly beneficial to seek advice from an estate planning attorney to assure that you are preparing the best estate plan for you and your loved ones. For more, see Irrevocable Trusts Explained
Why Revoke a Trust?
We will focus this article on revocable trusts. As the name suggests, these are trusts that you can revoke if you choose to make significant changes or cancel your estate plan altogether. Revocable trusts may not have all the protections and tax benefits of Irrevocable Trusts, but the revocability makes them popular options for estate plans.
Many people may feel confident in their estate plan and do not feel the need to give up the benefits of an irrevocable trust in exchange revocability. This is certainly a viable option for many people, but there are some situations that may arise where someone will want to have the added flexibility that a revocable trust provides. A trust may need to be revised or revoked if there are significant changes in family status that the trust was not built to accommodate such as a marriage, divorce or birth of a child. You may also wish to change beneficiaries to accommodate for significant life changes such as a major beneficiary passing away unexpectedly. You may also simply change your mind about an estate plan and wish to create major revisions or cancel it entirely. Revocable and Irrevocable trusts present two similar but different options, so you may want to consult an estate planning attorney to see which option is best for you.
Steps to Revoking a Trust
In this section, we will go through the steps taken to revoke a trust in Illinois. Revoking a trust may not be as simple as revoking a will (See our article: How to Revoke a Will), but the process is still fairly straightforward. As it involves many specific legal changes and document updates, you may want to consult your estate planning attorney. You should also keep in mind that, if you created a joint trust with a spouse, you may need to have them co-sign on major changes to the trust, so they will have to be involved in the revocation process. You should also keep in mind that estate planning laws vary between states, so the steps for Illinois may not always represent the steps in other states.
Here are the steps you can take when revoking a trust in Illinois:
- Remove All Property from the Trust. Property that is entered into a trust must be removed and added back to the estate of the trust holder before it can be revoked. This can be especially complex if the trust contains real estate, which will require a new deed to be completed in order for it to be properly removed from the trust. You will need to inform the county as well as any financial institutions such as the IRS of the change in property.
- Fill out a Revocation Declaration. You will need to fill out a formal, legal declaration of your revocation. To do this, you can search online to find the forms and fill them out yourself, or go to your estate planning attorney to have them guide you through the process. The form is usually very simple, but it can be especially beneficial to go through an attorney if your estate is complex or you are planning to create a new estate plan after the original is revoked.
- Review your Revocation. Before finalizing your form, you may want to review your revocation. Make sure that all property from your trust is properly removed and that you are certain you want to revoke your trust. An attorney may be able to help you review your documents for one final look.
- Finalize the Declaration with a Notary as Witness. When finalizing your revocation, you will need to sign it in the presence of a notary. You can get in contact with a notary at your attorney's office or by calling your local courthouse.
- Submit or Store your Declaration. In some states, you have to submit your revocation directly to the court house. In others, you can simply attach it to all copies of the trust. Be sure to track down your original trust as well as any produced copies and attach the revocation in order to avoid potential confusion over your intentions when your property is being delegated.
Alternatives to Revoking a Trust
As you can see with the previous steps, revoking a trust, while fairly straightforward, is far from simple and can be very expensive and time-consuming. You may want to consider other options if you are looking to modify your estate plan. If you are trying to make mostly simple changes to your trust, you many want to consider amending your trust. An amendment is a separate document that is attached to your trust that reflects your changes. This can be something as simple as adjusting beneficiaries or as complex as adding or removing property. If the changes are complex such as moving between states, you can also consider resubmitting rather than a full revocation. This will allow you to change your established estate plan to accommodate for your new plan or submit a new trust that will be honored in your estate plan. You may benefit from reaching out to an estate planning attorney significantly when you are making changes to an established estate plan.
If you are looking for an estate planning attorney in Illinois, we would be happy to help. You can reach out to us in several ways to schedule a free consultation or set up an appointment. Call us at 630-324-6666. Email us at email@example.com. Visit our website at www.OFlaherty-Law.com. Let us know what we can do to make your legal experience better.