Wills and Trusts in Illinois: The Basics, Without the Jargon

Two words that put people off doing something important. Here is what each one means.

A will

A will is a document saying who receives what you own after you die, and who looks after any children who are still minors. Without one, Illinois law decides both, using a fixed order that may not match what you would have chosen.

Example. A couple own a home and have two young children. Their will can name who raises the children and who manages money on their behalf until they are adults. Without a will, a court decides.

Probate

Probate is the court process that confirms a will and oversees passing things on. It can be slow, it costs money, and the file is public. Shortening or avoiding it is why many people look at trusts.

A trust

A trust is an arrangement where one person or institution holds property on behalf of someone else. A common type is a living trust: you move assets into it while alive, manage them yourself, and name who receives them afterwards.

The usual attraction is that assets in a trust can pass without probate, privately and often faster. The trade-off is that a trust costs more to set up and only works if it is actually funded, meaning the assets are properly moved into it. An unfunded trust helps nobody.

Who needs what

• Almost every adult benefits from a will, especially anyone with children.
• A trust is worth exploring if you own property, have assets in more than one state, want privacy, or are providing for someone who needs long-term support.
• Beneficiary forms matter. Retirement accounts and life insurance usually pass by the beneficiary named on the account, not by the will. Out-of-date forms are one of the most common and most painful mistakes.

Important

Estate rules differ by state and change over time. This article describes general Illinois concepts and is not legal advice. This is the one topic on our Money Matters hub where an hour with an Illinois-licensed attorney is usually money well spent.

What this means for you

• Check the beneficiary forms on your retirement accounts and insurance this month. Free, and it takes minutes.
• Write down what you own and where it is.
• The Illinois State Bar Association publishes free public guides on wills and probate in Illinois.

Where to check this yourself

Every source below is free, independent and is not selling you anything. If a source is selling you something, treat it as an advertisement, not as education.

• Consumer Financial Protection Bureau - U.S. government agency. Plain-English answers on mortgages, credit cards, loans and debt collection.
• Investor.gov (U.S. Securities and Exchange Commission) - investing basics, a free compound interest calculator, and a background check on anyone offering to manage your money.
• FINRA - oversees U.S. brokers. Clear explainers on bonds and annuities, plus BrokerCheck.
• MyMoney.gov - the U.S. government starting point for financial education.
• Federal Reserve Economic Data (FRED) - the source of the rates at the top of our Money Matters page.
• HUD-approved housing counselling - free, government-approved help for buyers and homeowners.
• Illinois Attorney General - consumer protection and scam alerts for Illinois residents.
• Illinois State Bar Association - free public guides on wills, probate and estates in Illinois.
• Illinois Department of Insurance - questions and complaints about annuities and insurance sold in Illinois.
• Internal Revenue Service - the rules on retirement accounts and what is taxable.