Trusts are basically a contractual arrangement wherein one party gives property to another party to be held for the benefit of yet another party. Because a trust is a contractual agreement, it is quite flexible and can be adapted to many varying uses. One instance in which a trust can be employed to great benefit is in the context of estate planning. There are three main parties to a trust transaction.
Nothing prevents a single individual or entity from acting in all three capacities.
Generally, each of the three parties to a trust transaction will have different rights and duties with regard to the trust. These rights and duties are spelled out in the trust agreement and by Illinois law. Most trusts are created in two ways. One benefit of a living trust is that the trust usually has set terms which have predetermined the distribution of certain property at the time of a beneficiary's death. In such cases, the property contained in the trust can avoid probate.