What is the difference between a Living Trust and a Private Land Trust?

A Living Trust is an estate planning legal tool, which is similar to a will in that you name a Trustee and beneficiaries. Unlike a will, a Living Trust offers privacy and a smooth transition upon your death. A properly funded living trust avoids probate court and the hassles associated with a will. With a will, one must undergo probate court because any item that is in your individual name must be probated unless it is a written contract.
Thus, a living trust does not provide asset protection benefits, but rather it is an estate planning legal tool.

In contrasts, a Private Land Trust is a good asset protection tool because liens and judgments do not attach to a private land trust. A private land trust holds limited asset protection benefits and estate planning benefits. For married couples in Illinois, a Private Land Trust is an excellent legal tool. Holding your residence in a Private Land Trust as tenants by entirety will make it virtually impossible to penetrate this legal structure unless you and your spouse are jointly sued. Often times, I advise couples against placing the corporate entity in both of your names for this reason. A private land trust also allows limited estate planning benefits because you designate a beneficiary. Thus, you have a written contract that appoints a beneficiary upon your death.

Sean Robertson is an Asset Protection and Estate Planning attorney in downtown Chicago. Sean Robertson can be reached at 312-498-6080.