Illinois Wills vs. Trusts
Illinois estate planning can be manageable with proper guidance. Residents of the Prairie State benefit from several distinctive planning advantages, including the substantial $100,000 threshold for small estates, expedited summary administration processes, and robust legal safeguards for spouses. Since Illinois maintains a state-specific estate tax with exemption limits considerably below federal thresholds, clearly understanding whether to utilize a will or trust in your situation is crucial. Making well-informed estate planning choices helps protect your loved ones from unnecessary expenses, probate complications, and procedural delays while ensuring your assets are distributed according to your wishes.
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US Map For The Different Will and Trust Requirements by State
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Illinois Will Requirements
An Illinois Last Will and Testament should include:
- Age and Capacity: Testator must be “of sound mind and memory” and at least 18 years old or an emancipated minor
- Format: Must be in writing
- Signature: Must be signed by the testator at the end of the document
- Witnesses: Must be signed by at least two credible witnesses
Signature Requirements
For Illinois wills:
- The testator must sign at the end of the document
- Text below the testator’s signature is not considered part of the will (though it doesn’t invalidate the will)
- A third party may sign on behalf of the testator at the testator’s request and in their presence
- Anyone signing for a testator cannot also serve as a witness
Witness Requirements
For Illinois wills:
- Each witness’s signature must be observed by the testator and by the other witness
- Witnesses should be “credible”
- Interested witnesses (who benefit under the will) can serve, but with limitations
Interested Witness Limitations
Witnessing by an interested party (a beneficiary under the will) does not invalidate an Illinois will, but bequests to that witness are void to the extent they exceed what the witness would have received if the testator died intestate. However, if the will is also signed by at least two additional credible witnesses who are not beneficiaries, bequests to an interested witness remain valid.
Self-Proved Wills
Though notarization of a will is not strictly required in Illinois, a will can be made “self-proved” through execution of a notarized affidavit by the testator and the will’s witnesses. When a will is self-proved:
- It can be admitted to probate without witness testimony
- The affidavit serves as evidence of the will’s authenticity
- No additional evidence of the will’s validity is needed during probate
Presumption of Incapacity
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Amendment, Revision, and Revocation of Illinois Wills
Amending an Illinois Will
Amendment of an Illinois will can be accomplished through:
- A codicil (a later-executed addendum to an existing will)
- Execution of a new will that includes the desired amendments
In either case, the new will or codicil must satisfy all formalities required for an Illinois will.
Revoking an Illinois Will
Illinois wills can be revoked by:
- Execution of a subsequent will that expressly revokes the prior will
- A separate written instrument stating the testator’s intent to revoke the will and satisfying the formalities required for creation of a will
- The testator’s “burning, cancelling, tearing or obliterating” the will
Destruction by Third Party
The physical destruction of a will may be accomplished by someone else acting for the testator, but only:
- In the testator’s presence
- At the testator’s request
Implicit Revocation
If a later will includes provisions which are contrary to provisions of an earlier will, the inconsistent provisions of the earlier will are considered revoked.
Automatic Revocation by Divorce
If, after executing a will, an Illinois testator’s marriage is dissolved or declared invalid, any provisions in the will in favor of the former spouse are deemed to have been revoked. The will is otherwise valid and is treated as if the former spouse had died prior to the testator.
Children Born After Will Execution
If a child is born to or adopted by a testator after execution of an Illinois will, the child is entitled to receive a share of the estate equal to what the child would have received had the testator died intestate—unless:
- The will addresses later-born children
- The will otherwise suggests an intent to disinherit the child
Holographic and Oral Wills
Holographic Wills
Illinois law does not recognize handwritten (holographic) wills that lack witness signatures. A will written in the testator’s handwriting, signed, and attested by two witnesses can be admitted to probate if all formalities required to create a valid Illinois will are satisfied.
Oral Wills
Oral (or “nuncupative”) wills are not recognized under Illinois law.
Illinois Trust Requirements
Illinois trusts are primarily governed by the Illinois Trust Code, which is based on the Uniform Trust Code.
Requirements for a Valid Illinois Trust
For a trust to be valid under Illinois law:
- The grantor must have legal capacity and must express the intention to create a trust
- The trust must usually be embodied in a written trust instrument signed by the grantor
- The purpose of the trust must be lawful and not in violation of public policy
- The trustee must have actual duties to perform
Oral Trusts
Required Trust Elements
Illinois trusts must have:
- A definite beneficiary (subject to exceptions such as for charitable trusts, trusts for the care of animals, and trusts granting a trustee power to choose beneficiaries from among a class)
- A trustee with actual duties to perform
Sole Trustee/Beneficiary Rule
The sole trustee of an Illinois trust cannot also be the trust’s sole beneficiary.
Authorized Trust Types
Illinois’s Trust Code specifically authorizes, among other things:
- Trusts created for charitable purposes
- Trusts for the care of pets or other animals
Trust Creation Methods
Illinois trusts can be created through:
- Transfer of title to property by a grantor to a trustee for a beneficiary’s benefit
- The grantor’s declaration that he or she holds property as trustee for someone else’s benefit
- Execution of a written appointment of a trustee
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Special Considerations
Small Estates Affidavit
Illinois offers a simplified process for small estates that can help avoid probate entirely. Key features:
- Available when the total value of an estate’s assets is below $100,000
- All estate debts must have been or will be satisfied
- A representative of the estate completes a small estates affidavit
- The affidavit authorizes and directs third parties in possession of estate assets to release or transfer them to beneficiaries as detailed in the affidavit
- No formal admission of the decedent’s will to probate is required
Summary Administration
Simplified Probate Process
Summary administration is a simplified probate process allowed for Illinois estates not exceeding $100,000 in gross value. This streamlined procedure:
- Can be used if there are no unaccounted-for taxes or debts owed by the estate
- Requires all beneficiaries to consent to summary administration
- Does not require the executor to file an inventory and accounting of estate assets with the probate court
- Partly alleviates the privacy loss usually associated with probate
Illinois Estate Taxes
State-Specific Estate Tax
While many states have repealed their estate taxes, Illinois still maintains its own estate tax with a much lower threshold than the federal exemption:
- An Illinois estate tax return must be filed if the estate’s gross value exceeds $4 million
- The tax begins at 0.8% and can increase to as high as 16% for the largest estates
- Illinois’ $4 million estate tax exemption is not portable between spouses
- Specialized trusts (such as A/B trusts) can help efficiently use both spouses’ exemptions
Transfer-on-Death Instruments
Transfer-on-Death Deeds
Illinois law recognizes Transfer-on-Death (TOD) designations on residential real estate deeds. A valid TOD instrument must:
- Be signed by the real estate owner
- Be signed by two witnesses
- Be notarized
- Be recorded prior to the owner’s death
- Include the essential elements of an ordinary deed
When properly executed, the real estate automatically transfers to the beneficiary upon the owner’s death, with no need for probate.
Other TOD Designations
Illinois law also recognizes TOD designations on certain financial accounts, allowing these assets to pass directly to named beneficiaries outside of probate.
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Wills vs. Trusts: Comparison
| Feature | Wills | Trusts |
|---|---|---|
| When It Takes Effect | After death | Can be immediate (living trust) or after death (testamentary trust) |
| Probate Process | Requires probate | Assets in trust avoid probate |
| Privacy | Public record | Generally private |
| Challenges | Can be challenged in probate court | More difficult to challenge |
| Cost to Create | Generally less expensive | Usually more expensive |
| Ongoing Administration | None until death | May require ongoing management |
| Protection During Incapacity | None (requires separate power of attorney) | Can provide management if grantor becomes incapacitated |
| Illinois Special Feature | Small estates affidavit for estates under $100,000 | Can help minimize Illinois estate tax for estates over $4 million |
Conclusion
Establishing wills or trusts in Illinois can be straightforward and approachable for most residents. Nevertheless, several life situations—including blended families from remarriage, responsibility for stepchildren, caring for elderly parents, providing for beneficiaries with disabilities, selecting guardians for minors, and managing business ownership—may introduce additional layers of complexity that could lead to unexpected outcomes if not properly addressed.
Illinois offers unique estate planning tools like the $100,000 small estates affidavit, summary administration for streamlined probate, and transfer-on-death deeds for residential real estate. The state’s spousal protection laws also provide safeguards against disinheritance, while its $4 million estate tax threshold makes tax planning essential for larger estates. When any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with and licensed under Illinois law to ensure your estate plan takes full advantage of the state’s provisions while avoiding potential pitfalls.
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FAQs: Illinois Wills and Trusts
Q: What are the requirements for a valid will in Illinois?
A: An Illinois will must be in writing, signed by the testator (18+ or emancipated, of sound mind and memory) at the end of the document, and witnessed by at least two credible people who sign in the presence of the testator and each other.
Q: Does Illinois have an estate tax?
A: Yes, Illinois imposes its own estate tax on estates valued over $4 million. The tax rate starts at 0.8% and can increase to as high as 16% for the largest estates, making proper estate planning crucial for larger estates.
Q: How do wills and trusts differ in Illinois regarding probate?
A: Wills require probate, a public court process, while trusts (especially living trusts) avoid probate, offering privacy and faster asset distribution. Illinois offers summary administration for estates under $100,000, providing a streamlined probate option.
Q: What are transfer-on-death (TOD) deeds in Illinois?
A: Illinois recognizes TOD designations on residential real estate deeds. When properly executed (signed, witnessed, notarized, and recorded before death), the property passes directly to the named beneficiary without probate upon the owner’s death.
Q: How are surviving spouses protected under Illinois law?
A: Illinois protects surviving spouses from disinheritance through a guaranteed elective share of at least one-third of the deceased spouse’s estate (or one-half if there are no descendants). If a will provides less, the spouse can choose to take the statutory share instead.
Q: Can I avoid probate for a small estate in Illinois?
A: Yes, estates valued under $100,000 with no unpaid debts can use a small estates affidavit to transfer assets without formal probate. This simplified process allows beneficiaries to receive assets more quickly while maintaining greater privacy.
