Revocable Trust for Married Individual: Credit Shelter and QTIP Trusts with GST Tax Planning (Illinois)

This legal template is a comprehensive document that deals with establishing a revocable trust specifically designed for married individuals residing in Illinois. The trust combines two main types of trusts - the Credit Shelter Trust and the QTIP (Qualified Terminable Interest Property) Trust - with the additional element of GST (Generation-Skipping Transfer) tax planning.

A revocable trust, as the name suggests, can be altered or revoked by the settlor (the person establishing the trust) during their lifetime. By establishing a revocable trust, the married individual can retain control over their assets and decide how they are managed and distributed both during their lifetime and upon their death.

The Credit Shelter Trust feature within this template serves to maximize the federal estate tax exemption amount available to each spouse. By funding this type of trust upon the death of the first spouse, a significant portion of the couple's assets can be shielded from estate taxes while ensuring they are still accessible for the surviving spouse's benefit.

The second component of this legal template is the QTIP Trust. This trust arrangement allows the settlor to control the ultimate distribution of their assets after the surviving spouse's death. This type of trust ensures that specific beneficiaries, such as children from previous relationships, receive the remaining assets as per the settlor's wishes.

Lastly, the GST tax planning feature incorporated into this template addresses potential generation-skipping transfer taxes. Generation-skipping transfers involve assets being transferred directly to grandchildren or future generations. By employing the appropriate provisions to manage and minimize the GST tax, the settlor can ensure the efficient transfer of wealth to future generations without incurring excessive tax liabilities.

Overall, this legal template provides a comprehensive framework for married individuals in Illinois who wish to establish a revocable trust that combines the benefits of the Credit Shelter Trust, QTIP Trust, and GST tax planning strategies. It offers the flexibility to organize and distribute assets effectively while aiming to optimize tax efficiency and preserve wealth for future generations.