Many families want to keep a home in the family after the owners are gone. In Illinois, a land trust can be a straightforward way to do that.

How it works

A trustee holds title to the property, while you, as beneficiary, keep control: you live in it, manage it and decide whether to sell. The trust agreement names who receives your interest when you die. For a general overview, see estate planning.

Why families use land trusts for legacy planning

Avoiding probate

With contingent beneficiaries named, your interest passes to them at your death without a probate case for that property. That's usually faster, less expensive and more private.

Privacy

The public record shows the trustee as titleholder, which keeps family ownership out of plain view, subject to the disclosure rules that apply to Illinois land trusts.

Planning for co-ownership

When several children inherit together, the trust agreement can set out who manages the property, how decisions are made and what happens if someone wants to sell.

Planning considerations

Pick the right trustee

Most Chicago-area land trusts use a corporate trustee, which holds title and follows written directions.

Write clear terms

Spell out who the beneficiaries are, how decisions will be made and what happens if a beneficiary dies or wants out.

Coordinate with your overall plan

A land trust should work alongside your will, any living trust, powers of attorney and beneficiary designations, not in isolation.

Consider taxes

Transfers can have property tax, gift tax or estate tax implications. Illinois has its own estate tax, with a much lower threshold than the federal exemption. Coordinate with your tax advisor.

Plan for management

If the property will be rented or needs upkeep, decide who handles it and how income and expenses are shared.

An example

Parents want their home to stay in the family after they're gone. They place it in a land trust, name their three children as contingent beneficiaries, and set terms requiring agreement among the children before a sale. When the parents pass, the children's interests take effect without probate, and the agreed terms guide what happens next.

Next steps

Review how your property is titled today
Think about who should receive it and how they'll share decisions
Talk with an attorney about how a land trust fits your overall plan

To discuss your plan, schedule a consultation or call (312) 809-9766.

By Attorney Shara Kamal. General information for Illinois readers; not legal advice for a specific situation.