DGAA bLAWg

What Happens to an Unfunded Trust?

Web Admin - Wednesday, June 11, 2014

illinois unfunded trust lawyerPreparing estate planning documents is a key step in ensuring that a person’s final wishes are respected throughout the probate process, and a recent survey shows that the majority of Americans understand this fact. However, when setting up a trust, preparing the documents does not finish the process. If the person who sets up the trust fails to properly transfer their assets into it, it can become an underfunded or unfunded trust. This lack of proper funding can lead to a failure of a person’s estate plan, and also increases the potential for disputes throughout the process of probating the estate.

What an Unfunded Trust Is

A trust is a legal construction that involves a settlor, a trustee, and a beneficiary. The settlor creates the trust and transfers assets into it. The trustee manages the assets in the trust and they do so with the best interests of the beneficiary in mind. The drafting of the trust instrument is a key part of this process. That document will outline many of the legal rights and responsibilities of the trustee and the beneficiary, and it can provide instructions for the trustee to follow.

Many people think that once they draft the trust document, the process is complete and the trustee will be able to carry out their desires. This is not the case. The person will also need to legally transfer the assets to the trust. Without doing so, the trustee may not actually be able to control the assets and distribute them in accordance with the settlor’s instructions.

The Consequences of Improper Trust Funding

Improper trust funding can lead to disputes between heirs throughout the probate process. This is because if the settlor does not properly fund the trust the trustee has no legal authority to carry out the wishes of the settlor. Instead, the assets would pass through any will that the settlor left behind, or they may pass through right of survivorship, the default way that courts distribute assets. This means that the beneficiaries of the trust may end up in a legal battle with the heirs listed in the will over their rights to the assets.

Additionally, even if the settlor did not leave a will and there are no disputes, the assets will still need to go through the state probate process to be distributed. This can lengthen the amount of time it takes to wind down a person’s affairs and tends to be a less convenient process than if the trust had been properly funded.

If you are thinking about how best to carry out your final wishes, seek out an Illinois estate planning attorney for help. Our skilled team of lawyers helps clients in northwest suburban towns like Mount Prospect, Arlington Heights, and Schaumburg understand their estate planning options and create the best plan for themselves.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Using Virtual Representation Effectively in Illinois

Web Admin - Wednesday, November 06, 2013

When a trust is created, many different people may have an interest in how it is administered. For example, it is common for the trust documents to allow one person to benefit immediately (i.e. a spouse), with others to receive the assets upon that beneficiary’s death (i.e. the children). Those who are set to inherit later obviously have a stake in how the trust is managed. Mismanagement may affect their interests.

But what happens if those future beneficiaries are children, disabled, or otherwise unable to effectively advocate for their interests? One solution is to go to court and have a judge appoint a guardian to act in their interest. But that process often takes significant time, is costly, and may be ineffective if the future beneficiaries are unknown, like unborn children.

Reaching an Agreement

Is there a way to settle disagreements involving a trust without going to court? Fortunately, there is.

Illinois has a “virtual representation” statute which allows select individuals to represent the interests of others to craft agreements, often dealing with disputes regarding a trust. Essentially, this law allows different parties to create agreements which avoid litigation and are binding on some future beneficiaries.

When used properly, these settlement agreements can solve ambiguities in the trust document, delineate duties of the trustee, and account for many other administrative issues. As a result, these agreements can be incredibly efficient, eliminating the risk of prolonged legal battles down the road.

Many Illinois residents are well served by exploring use of virtual representation to reach a nonjudicial agreement. However, it is important to proceed cautiously, usually with the aid of an attorney. When not created properly, the agreement may not hold up. Under the law, to be valid the primary beneficiaries must all be adults and legally competent. The trustee must also be a party to the agreement. Notably, the agreement cannot change the terms of the trust. In addition, the primary beneficiary must not have a conflict of interest with those who are being bound. To qualify as a primary beneficiary the individual must currently receive income or principal from the trust. Alternatively, the individual must be eligible to receive a distribution of principal at a certain date.

Learn More

Do you want to learn more about using virtual representation effectively? These issues are quite complex, and so it is helpful to contact a Palatine estate planning attorney to make sure you are doing everything in your power to protect your long-term interests. The law office of Drost, Gilbert, Andrew & Apicella, LLC serves clients in Palatine, Arlington Heights, Crystal Lake and other suburban Chicago areas.


Recent Posts


Tags

Chicago insurance claim attorneys medical malpractice compensation Illinois red light cameras Illinois employment lawyer Illinois criminal defense attorney Illinois pedestrian accident attorney Illinois employee rights attorney. denial of life insurance Illinois medical malpractice attorney Schaumburg medical malpractice lawyer Des Plaines insurance attorney traffic violations defense first degree murder Schaumburg construction accident lawyer Schaumburg car accident attorney Illinois wrongful termination lawyer Crystal Lake civil litigation lawyer Chicago estate planning personal injury law firm drunk driving insurance claim denial distracted driving accident victims Illinois business lawyer spinal cord injuries slip and fall accidents Arlington Heights wills and trusts lawyers guardianship attorney Crystal Lake personal injury attorney insurance agent negligence Employment Discrimination Law Arlington Heights personal injury attorney Arlington Heights accident attorney unauthorized overtime Des Plaines personal injury lawyers defective products lawyer Arlington Heights wills and trusts attorney Super Mario Forcible Entry Illinois employment attorneys digital information Barrington employment law firm Illinois elder law attorney rumble strips uninsured motorist Illinois jet ski accident lawyer changes to mortgage law Crystal Lake estate planning lawyer Self-Directed IRA Accounts traumatic brain injury Des Plaines drug lawyer Rolling Meadows insurance attorney eluding a police officer Illinois employment law attorney Barrington Traffic Lawyer Barrington estate planning lawyer Illinois medical malpractice claim Palatine employment lawyer Crystal Lake employment lawyer Illinois job attorney Des Plaines drug crimes lawyer minimum wage workers comp Illinois will lawyer Mount Prospect wills and trusts lawyers field sobriety test financial advisors breach of contract Illinois DUI attorney Chicago lawyer installment contracts real estate attorney reckless homicide gift taxes Barrington drug crime attorney Buffalo Grove medical malpractice lawyers insurance adjusters Schaumburg personal injury lawyer Barrington employment law attorney Palatine real estate lawyer FMLA Illinois workers compensation attorney personal injury accidents food poisoning drug crimes llinois Real Estate Lawyers Association Illinois employment laws employment attorney Palatine insurance lawyer Illinois medical malpractice lawyers Rolling Meadows DUI lawyer personal injury Arlington Heights medical malpractice lawyer consent to a search blended families breathalyzer test real estate attorneys Illinois workers compensation lawyer Illinois driving without license denied insurance claim new real estate form motorcycle accident lawyer Rolling Meadows employment law attorneys Schaumburg drug defense lawyer Illinois GM ignition switches life insurance claims speeding Illinois LLC creation Illinois workplace lawyer Chicago insurance law firm Inverness elder law lawyer Landlord Tenant Ordinance BUI Barrington attorney wrongful death Illinois boating accident lawyer personal injury lawyer insurance claim nursing home negligence Do Not Resuscitate Barrington business law firm Barrington criminal defense lawyer insurance disputes car crash living trust workplace sexual harassment workers compensation benefits Illinois insurance disputes Chicago car accident lawyer Buffalo Grove injury lawyer insurance denial appeals Schaumburg probate attorney whistleblower protections Illinois employment law attorneys pedestrian accidents Illinois Workers’ Compensation Commission IRA trust transfer Chicago trucking accident attorney Des Plaines real estate lawyer deed transfer life insurance policy Liquor Control Act Buffalo Grove real estate attorney insurance dispute dog bites Arlington Heights Traffic Lawyer Inverness estate planning lawyer spinal cord injury wrongful termination Crystal Lake traffic lawyer pedestrian-automobile accident drunk driving statistics probate claims hiring employees Rolling Meadows insurance lawyer holiday statistics vacation home medical marijuana Mt Prospect Attorney Illinois mortgages Rolling Meadows probate lawyer swimming pools comparative negligence South Barrington real estate attorney DNR sole proprietorship DUI defense Arlington Heights car accident lawyer life insurance Illinois traffic attorneys trench injuries pain and suffering commercial real estate medical malpractice overtime pay civil litigation Schaumburg injury lawyer civil rights violation trucking accident lawyers Illinois rollover accident lawyers Crystal Lake traffic attorney college kids bicycle dooring accidents Palatine personal injury lawyer Chicago will attorney loss of consortium Illinois employment law firm severance agreements Des Plaines personal injury attorney Rolling Meadows deadly crashes rest breaks insurance negligence defective products life insurance lawyer cell phone tower data insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys hands free device Crystal lake insurance dispute attorney Schaumburg employment attorney South Barrington real estate lawyer elder law no contest clauses Rolling Meadows tax attorney Rolling Meadows traffic attorney Exclusions Illinois defective products attorney Inverness injury lawyer Rolling Meadows personal injury attorney commercial leasing loopholes federal regulations for LLCs estate plan Legal Info Fourth of July Illinois estate planning law firm expungement homestead rights small business traffic tickets Rolling Meadows personal injury lawyers Kenilworth estate planning attorneys employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, IRS Crystal Lake personal injury lawyer Buffalo Grove corporate attorney pizza emoji Rolling Meadows employment law attorney Chicago will attorney, social media platforms, Illinois estate planning lawyer, Inverness real estate attorney Illinois business law atorneys digital evidence traffic deaths Illinois registered agent Rolling Meadows criminal lawyer Deer Park motorcycle accident lawyer Crystal Lake tax lawyer power of attorney for healthcare liens blood alcohol content medication errors Crystal Lake medical malpractice attorneys Deer Park DUI lawyer creditors Des Plaines Traffic Lawyer Illinois home inspection Illinois traffic attorney anesthesia errors Illinois insurance claim dispute lawyers Schaumburg traffic lawyer Arlington Heights wills and trusts lawyer Crystal Lake car accident attorney Des Plaines DUI attorney healthcare insurance attorney Des Plaines medical malpractice attorney Illinois estate planning attorney probate claims process Palatine corporate attorney car crash injuries natural gas BAC landlord Schaumburg real estate lawyer murder DGAA Arlington Heights personal injury lawyer Illinois traffic laws real estate leasing Transfer on Death Instrument liability personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys Illinois small business Schaumburg personal injury attorney Crystal Lake car accident lawyer employment contract Illinois insurance lawyer license suspension Schaumburg criminal law attorney Thanksgiving Illinois insurance claim dispute lawyer Arlington Heights Attorney FSLA disability benefits comp time underinsured motorist Jay Andrew Illinois personal injury lawyers caretaker rights Schaumburg personal injury lawyers jet ski accidents Illinois insurance claim attorney car accident Palatine elder law attorney Inverness personal injury attorney Illinois living will Home Remodeling Repair Act Palatine business attorney wills and trusts Schaumburg corporate attorney appealing an insurance claim Arlington Heights car crash attorneys tax attorney attorney fees capital gains tax trust payments underage DUI Rolling Meadows traffic law firm license residential real estate Barrington Illinois estate planning lawyer traffic accidents insurance claim dispute attorney Schaumburg wrongful death attorney privacy laws clemency Illinois traffic ticket lawyer Illinois collections attorney Barrington medical malpractice lawyers ObamaCare Illinois workplace discrimination attorney business litigation Buffalo Grove personal injury lawyer personal injury claim Deer Park personal injury lawyer Arlington Heights traffic attorney Barrington boating accident attorney real estate closing Illinois insurance dispute lawyers Detainer Actions Arlington Heights criminal lawyer Schaumburg elder law lawyer Barrington estate planning attorney corporate law Palatine corporate law attorneys Barrington workers compensation attorney Schaumburg estate planning attorney liability claims Rolling Meadows personal injury lawyer fault based insurance rollover accidents product liability Rolling Meadows real estate attorney gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys pedestrian injuries, pedestrian fatality subcontractor Attorney Ken Apicella Joliet general practice lawyers Arlington Heights injury attorney license revocation digital assets Des Plaines Palatine estate planning lawyer Riverwoods estate planning lawyer forming a corporation in Illinois Crystal Lake pedestrian accident lawyer estate planning for college students car accident lawyers Crystal Lake injury attorney advance healthcare directive right to work boating under the influence criminal employee misclassification traumatic brain injuries work unions Illinois pet lawyer personal injury attorney rent to own real estate contracts slip and fall golf accidents filing a medical malpractice claim Buffalo Grove probate lawyer Rolling Meadows medical malpractice lawyers owner responsibility Illinois Probate Act of 1975 real estate Rolling Meadows accident lawyer independent contractor civil litigation attorney involuntary manslaughter problem employees suspended license Palatine workers compensation lawyer DUI penalities digital media accounts, estate planning, Arlington Heights estate planning attorney, truck collisions Illinois trusts attorney Rolling Meadows insurance dispute lawyers traffic laws Illinois Wage Payment and Collection Act Illinois lawyer workers compensation elder abuse drug crimes lawyer Arlington Heights pedestrian accidents probate lawyer Crystal Lake medical malpractice lawyer Inverness real estate lawyer Long Grove estate planning manufacturing marijuana estate planning lawyer insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys foreclosure Schaumburg civil litigation attorney Rolling Meadows employment attorney employees BAIID Barrington personal injury lawyer license reinstatement Des Plaines real estate attorney unpaid overtime Palatine probate lawyer Buffalo Grove traffic attorney Chicago attorney insurance denials Palatine construction attorney traffic offenses Deer Park traffic accident attorney fiduciary rule delay unpaid assessment Illinois traffic accident lawyer Rolling Meadows insurance dispute lawyers, insurance dispute Inverness DUI lawyer power of attorney car crashes Barrington litigation attorney Illinois law Illinois car accident attorney trucking accidents Des Plaines motorcycle accident attorney real estate lawyer operating agreements products liability Arlington Heights real estate lawyer Palatine injury attorney Arlington Heights employment attorney Whistleblower Claims natural gas explosion medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers landlord tenant law Crystal Lake medical malpractice law firm Illinois real estate brain injury employee rights Des Plaines tax law firm modern family estate planning Buffalo Grove traffic lawyers Deer Park traffic lawyer construction accidents Schaumburg estate attorney real estate zoning employment lawyer DUI Illinois personal injury lawyer pet law Arlington Heights insurance attorney boating DUI bicycle accidents Illinois Sales Representative Act Barrington injury attorney DUI attorney irrevocable trust Palatine traffic lawyer fiduciary rule Rolling Meadows litigation lawyer trusts motorcycle accident in terrorem provision Illinois speeding lawyer vacation home fines estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, ken apicella crossover accidents trauma after an accident back injuries Schaumburg Attorney employee discrimination criminal law Schaumburg criminal attorney LLCs driving Des Plaines accident attorney Inverness insurance attorney revenge porn Illinois wills and trusts attorneys senior citizens Des Plaines criminal attorney personal injury claims Illinois wills and trusts mass shooting POA employment law trustee estate tax TBI drug possession Crystal Lake insurance lawyer Deer Park workers compensation lawyer Illinois trucking safety IRA benefits insurance dispute attorney Rolling Meadows marijuana attorney Inverness accident lawyer home inspection lawyer jet ski medical research DMV Illinois corporate lawyer Rolling Meadows estate planning attorney Crystal Lake pet attorney criminal record Arlington Heights trucking lawyer Arlington Heights TBI attorney premises liability insurance claims Illinois personal injury attorney privacy Schaumburg insurance lawyers Des Plaines claims law firm automated cars murder defense Palatine criminal defense lawyer sexual harassment Retaliatory Discharge Crystal Lake will lawyer pay when paid contract meal breaks Rolling Meadows corporate lawyer Des Plaines pet law attorney icy parking lots Inverness corporate attorney Inverness probate lawyer probate Illinois Transfer on Death Instrument healthcare claims Des Plaines personal injury lawyer PTSD foreclosed rental property texting while driving Barrington civil litigation attorney low-ball insurance settlement Affordable Care Act dram shop law Illinois insurance claims lawyers drugs Rolling Meadows Attorney Buffalo Grove law firm overtime violations Rolling Meadows car accident lawyers Palatine employment attorney Buffalo Grove personal injury attorney Rolling Meadows criminal attorney wills probate fees social media after death Rolling Meadows boating crash lawyer Long Grove wills and trusts attorneys health insurance dispute condo insurance claim denials Home Sale Contingencies Palatine civil litigation lawyer Illinois tax attorney Crystal Lake employment law attorney Illinois construction accident attorney Chicago traffic lawyer condo association Crystal Lake business law attorneys estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers underfunded trust Illinois personal injury insurance claim delay probate process Barrington criminal lawyer controlled substance Arlington Heights estate planning attorney traffic violations car collision Palatine punch death mortgage Illinois probate lawyer Barrington personal injury attorney Chicago estate planning lawyer boating accidents agent Fair Labor Standards Act wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace Buffalo Grove employment lawyer internet Mount Prospect elder law attorney Illinois Human Rights Act IRELA insurance claim dispute Buffalo Grove criminal defense lawyer Colin Gilbert Crystal Lake criminal defense attorney School Visitation Rights Act Deer Park accident attorney Schaumburg employment law attorneys Illinois medical malpractice case Crystal Lake bike accident lawyer commercial leases Palatine trusts lawyer Policy Cancellation marijuana crimes attorney preventable medical errors Rolling Meadows Traffic Lawyer Inverness civil lawyer Long Grove estate planning attorneys rollover car crashes Palatine employment law lawyer Palatine law firm estate planning attorney Des Plaines civil attorney sexual images Federal Food Drug and Cosmetic Act real estate contract Illinois insurance attorney living wills Inverness traffic law firm Arlington Heights employment law attorneys car accidents Crystal Lake employment attorney Chicago employment attorney construction contracts Illinois employment law Illinois motorcycle accident lawyer Illinois injury lawyer ACA federal crimes Deer Park criminal attorney Illinois bicycle safety preventing accidents compensatory time cell phone Chicago corporate attorney insurance agents Deer Park real estate law firm dealing with problem employees estate planning Palatine drug lawyer Chicago biking tips Illinois civil litigation lawyer Arlington Heights wills and trusts attorneys bike accident wage theft bad faith insurance claims pregnant women Long Grove real estate lawyer fatal car accidents Palatine Attorney child safety Crystal Lake law firm Palatine civil attorney Illinois estate planning Arlington Heights tax lawyer drug crime murder charges living trust benefits estate attorney traffic crimes car accident lawyer texting and driving Deer Park employment law attorney pet bites caregiver auto accidents Long Grove real estate attorney digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Barrington employment attorney denied insurance claims Crystal Lake accident attorney contracts Class A misdemeanor Kenilworth estate planning attorney head on collisions job lawyers employment law, Illinois employment laws Deer Park medical malpractice attorney Des Plaines collections attorney paid sick leave Schaumburg Illinois attorney Kenilworth estate planning lawyer living trust vs will income distribution deducation hit and run accident dynasty trusts unfunded trust investment property estate planning trusts Family Medical Leave Act Des Plaines injury law firm Palatine traffic accidents special needs trust criminal defense pedestrian accident Buffalo Grove car accident lawyer distracted driving accidents Schaumburg estate planning lawyer Rolling Meadows business lawyer medical malpractice claims Rolling Meadows drug defense attorney institutional trustee Food and Drug Administration's Food Safety Modernization Act Colin H. Gilbert Illinois real estate lawyer Buffalo Grove insurance claim dispute lawyers accidental death benefits Long Grove estate planning attorney Illinois Smoke Detector Act employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys surgical mistakes cell phone accidents Barrington real estate lawyer taxes CAM Arlington Heights lawyer Chicago employment lawyer startup company Mount Prospect real estate lawyer

Archive