Understanding Revocable Trusts in Illinois Versus Nevada
Explore the differences between revocable trusts in Illinois versus Nevada, including tax, privacy, and duration concerns.
For day-to-day use, revocable trusts in Illinois versus Nevada look alike—both avoid probate and preserve privacy. The real differences show up in taxes tied to where you live, Illinois’ separate estate tax system, and Nevada’s unusually long post-revocable trust timelines.
A revocable trust avoids probate for assets you title into it. That’s true in Illinois and Nevada—real estate, accounts, even vehicles can pass outside court. Also, privacy improves, and timelines shrink. However, there are differences between revocable trusts in the two states.
With a standard revocable (grantor) trust, trust income is taxed to you. If you live in Illinois, state income tax applies; if you live in Nevada, there’s no state income tax at all. Also, a revocable trust doesn’t change whether an estate or inheritance tax could apply. Illinois has an estate tax, Nevada doesn’t. Finally, Nevada allows very long “dynasty” timelines (up to 365 years under its rule against perpetuities). Illinois follows its own trust code and common-law principles, but does not offer Nevada’s ultra-long horizon.
Revocable Trusts in Illinois Versus Nevada in Real Life
You live in Illinois with property only in Illinois. A revocable trust can keep most or all assets out of probate if funded correctly. If your taxable estate exceeds Illinois’ threshold, the estate may still file and possibly pay Illinois estate tax—trust or not. The form and instructions come from the Attorney General’s office.
You live in Nevada with investments nationwide. Your revocable trust avoids Nevada probate for funded assets. Since Nevada has no state income, estate, or inheritance tax, there’s no state-level tax filing on your residency alone. Federal rules still apply.
You’re a Nevada resident who owns an Illinois rental. Funding that Illinois property into your revocable trust helps avoid ancillary probate in Illinois. But Illinois can still assert estate tax jurisdiction over Illinois-sited assets if the overall estate crosses its filing threshold. The trust doesn’t change that.
You want a long-running trust for heirs. During your lifetime, a revocable trust is similar in either state. The big split shows up after it becomes irrevocable (upon the grantor’s passing). Nevada’s 365-year window enables very long stewardship and staggered distributions. That’s a structural advantage many families weigh when comparing revocable trusts in Illinois versus Nevada for long-term plans.