On April 29th, both Illinois houses passed a bill that amends the state’s joint tenancy provisions to permit revocable trusts to hold homestead property in tenancy by the entirety (see below for a brief discussion of “tenancy by the entirety”).
When creating dual living trusts, clients are generally faced with a significant funding decision: whether the homestead should be titled (a) to one client’s revocable trust or (b) to the clients jointly in tenancy by the entirety so that individual creditors of either spouse cannot force a sale of the property. This new law allows clients to hold the property jointly in tenancy by the entirety and title each spouse’s share to his/her revocable trust.
Until further guidance is available through caselaw, it is unclear whether there is any additional benefit to titling a home in this manner. Until then, the only benefits to holding title in tenancy by the entirety between a husband and wife’s revocable trusts may be that (a) the client can avoid the additional step of having to re-title the home to the survivor’s trust after the first death and (b) in case of a simultaneous death, the home is held in trust and avoids probate.