What is a trust?

A trust is a legal relationship in which a person or entity, called a “trustee,” holds property for the benefit of another person or entity, called a “beneficiary.” A trust is created by a document called a trust agreement or trust declaration, which defines the relationship between the trustee and the beneficiary. In Illinois, the court may also create a trust through a probate court order. In a trust, the trustee has a fiduciary responsibility to the beneficiary, which means that the trustee must act in the best interests of the beneficiary. The trustee must manage the trust assets prudently and follow the instructions in the trust agreement. Generally, the trustee is required to make distributions of trust assets to the beneficiary as outlined in the trust agreement. Trusts are commonly used to provide stability and security for beneficiaries by providing an ongoing source of financial support, protecting assets from creditors and taxes, and ensuring that assets are passed on to the beneficiary upon the death of the settlor. Trusts can also provide for the care of minors or disabled persons. In Illinois, trusts can be created by individuals or corporate trustees and can be revocable or irrevocable. Revocable trusts allow the settlor to make changes and revoke the trust, while irrevocable trusts are permanent and cannot be modified or revoked after they are created. Trusts can be an important part of estate planning in Illinois and can provide many benefits to the settlor and beneficiaries. By creating a trust, individuals can manage their assets and ensure that their beneficiaries will be taken care of.

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What is a trust?

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