Living trust or TODI?

Revocable living trusts are all the rage in estate planning these days. A lawyer who spoke at a retirement seminar I attended said a trust is a must have for avoiding probate. The same advice can be found in numerous online articles.

While investments are passed straight to beneficiaries, the disposition of property in Illinois worth more than $100,000 has to go through probate court unless the owner had a trust, the advice goes. Probate costs money and delays settlement.

But making a revocable living trust costs money, too — hundreds or even thousands of dollars in attorney fees — unless you use one of the forms available online for less than $100.

A living trust is also cumbersome because it must be “funded.” That means you have to transfer asset titles — home, car, personal property, investments, bank accounts, etc. — to the trust or it’s worthless. For example, you need to record a new deed transferring ownership of your home to the trust. Because people tend to forget some assets, they should have a “pour-over” will as well, and so they don’t avoid probate altogether.

Despite the hassle, I thought I had to have a trust. My first inclination was to look into the do-it-yourself forms available online; I’d already gone the DIY route with my will. But there are warnings about how a DIY trust can be invalidated by a mistake, so I was nervous about it.

Then I happened upon this opinion from retired financial planner David Braze at the Motley Fool: “I'm not against living trusts. . . . But I do think they are overmarketed to the elderly and are inappropriate for many. If the only purpose behind obtaining a living trust is to avoid probate, then there may be cheaper means to do so. I believe that most folks do not need a revocable living trust.”

If a site called the Motley Fool doesn’t inspire confidence, Forbes, Kiplinger, and AARP say the same thing.

The cheaper means Braze mentions to avoid probate include “transfer on death” documents.

A Transfer on Death Instrument (TODI) for residential property became effective in Illinois in 2012. I executed a TODI for my condominium, the only property I have worth more than $100,000. Everything else —  investments, insurance policies, etc. — has named beneficiaries who will receive their designated shares without probate.

Illinois’s TODI form, available online, is simple to execute. You need your property identification number (from your property tax bill) and the legal description of the property (from the deed). You fill in the beneficiary or beneficiaries and have the document notarized in the presence of two witnesses. Then you file it with the county recorder of deeds, which cost me $52. After my death, my beneficiary needs to file an Affidavit of Death for the transfer of ownership.

The clerk at the Cook County Recorder of Deeds’ office looked over everything closely, so I’m not worried about mistakes.

I don’t want to leave the impression that everyone should go the TODI route. Those with enough assets to be subject to estate taxes, who own property in more than one state or abroad, who want to attach strings to their gifts (so-and-so inherits as long as she uses the money to . . . ) or to disinherit a child are advised to have a trust.

My estate planning wasn’t finished with the TODI. As I was researching whether I needed a revocable living trust, I found this opinion from attorney Robert Lord on his own website: “Quite often, through a combination of powers of attorney, beneficiary deeds, transfer-on-death designations, beneficiary designations and other measures, probate can be avoided without a living trust. In many cases, you can avoid costs and delay by employing those alternative measures.”

So, along with drawing up the TODI, I also made sure to fill out medical and financial power of attorney forms. I reviewed my will and living will and updated the letter of instructions accompanying the will. I made copies of everything for my safe deposit box and for my sister Nancy, who is 15 years younger than I and thus the logical executor.

The letter of instructions was the hardest part because I tried to think of everything that would make it easier on Nancy, such as instructions for cremation and memorial service; stopping automatic payments; where to find passwords; whom to notify; making sure to keep my genealogy records and nostalgic items like our mother’s baptismal gown and grandmother’s kitchen plates and canisters; and taking my pet(s) to a no-kill shelter if no one wants to adopt them.

The letter of instructions will need to be revisited every year or so, since things like automatic payments can change. Everything else I can probably put out of mind now. It feels good that my affairs are in order for the next
30 (!) years.


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  • Very good article, thanks for sharing. It does get complicated doesn't
    it... And something you really don't want to address.

  • A living trust (revocable living trust or bury vivo trust) is a kind of trust made with the end goal of holding possession to an individual's benefits amid the individual's lifetime and for appropriating those advantages after death.

  • In reply to colliewade:

    I understand that, but I was questioning whether everyone needs one.

  • I live in Chicago, Cook County and read your article: Living Trusts or TODI and was wondering if you used the TODI form that is given on the Recorder of Deeds website or another type to TODI? I would like to create one and want to make sure I use the correct form. Thank you for your help.

  • Hello, Does. Yes, I used the form you mentioned. It's at

  • Hi Ms. Marianne Goss,
    I changed my name to Debbie S. from Does - just wanted to let you know so you would know who is responding to you!! I'm new to ChicagoNow and wasn't too sure if you would respond to an older post. I appreciate your prompt response. It is a BIG help and now I can be more comfortable about filling out the form. Thanks again!!

  • Glad to reinforce what you were already going to do.

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