What Is a Land Trust and How Does It Work in Illinois?

 Posted on October 19, 2025 in Estate Planning

Owning property in your own name can make your information public. It can also make transferring that property after your death more complicated. A land trust can help you avoid these issues and hold real estate privately while still staying in control of it. If you are considering a land trust, an experienced Calumet City, IL estate planning lawyer can help you understand how it works and how it fits into your long-term plans.

What Is a Land Trust?

A land trust is an agreement that separates who owns a property from who benefits from it. Under 765 ILCS 405/, a person or company called the trustee holds the legal title to your property. However, you are the beneficiary. That means you get to make the important decisions about it. You can choose when to sell, rent, or refinance the property, even though your name does not appear on public records.

The Land Trustee as Creditor Act also affects how land trusts work. It says that your interest in the trust is considered personal property instead of real property. That means your ownership rights are treated more like owning an account or investment, not like owning a building directly. This can make it easier to transfer ownership and help protect your privacy.

Benefits of an Illinois Land Trust

Setting up a land trust can offer several advantages for Illinois property owners:

• Privacy: Your name stays off public property records.

• Simplified transfers: You can transfer your ownership interest to someone else without filing a new deed.

• Protection during disability: If you are unable to manage your affairs, your trustee can handle property matters according to your instructions, preventing confusion or delays.

• Flexibility: You can manage, sell, or refinance the property without disclosing your identity.

What Happens to a Land Trust When the Beneficiary Dies?

When you pass away, the terms of your trust agreement determine what happens next. You can name someone as a successor beneficiary to take over your interest in the property. This transfer can happen without court involvement. It also helps your loved ones avoid delays and extra costs.

If you do not name a successor, your interest may become part of your estate and follow the instructions in your will. A well-written trust can make sure your property goes exactly where you want it to. This is especially useful if you own more than one property or have rental investments.

How to Create a Land Trust in Illinois

The first step in creating a land trust is to choose a trustee. This can be a bank, an attorney, or another qualified person to hold the property title for you. Then you sign a written trust agreement. This document lists your rights, your trustee’s duties, and what happens if you become unable to manage your affairs or pass away.

Once that is done, you transfer the property into the trust by signing a new deed. Even though this sounds straightforward, the laws governing the process can be complex. An experienced estate planning attorney can make sure the paperwork is correct and that the trust fits with your will or living trust.

Contact an Alsip, IL Estate Planning Attorney Today

Attorney Constance R. Sherrod has been serving the greater Chicagoland area since 2007 and is passionate about helping people plan for the future. As an Elite Lawyer since 2022, she has many repeat clients who trust her detailed and caring approach.

To learn more about land trusts, call The Sherrod Law Firm, Ltd. today at 312-321-6910 to schedule a free consultation with a knowledgeable Calumet City, IL estate planning lawyer.