Setting up a living trust in the state of North Carolina can be tricky. But, with the right team on your side to help, the estate planning process in North Carolina becomes much more manageable. Our North Carolina estate planning and trusts attorneys at Wilson Ratledge can help you craft that plan.
What Is A Living Trust?
A living trust is defined as the following: a trust in which the person who creates the trust can alter it at any time or, if they are so inclined, to end the trust altogether.
The opposite of a living trust is an “irrevocable trust.” By setting up an irrevocable trust, you do not have the ability to alter or end the trust at any time.
Many people refer to a living trust as a “revocable trust.” So, if you hear that particular phrase mentioned, know that it refers to a living trust.
What Are The Advantages Of Setting Up A Living Trust?
Setting up a living trust offers a wide assortment of advantages. Some of the most notable benefits that can come from setting up a living trust are as follows:
- Probate avoidance: Assets placed in a revocable trust typically do not need to go through probate, which can save your beneficiaries time, legal fees, and court costs.
- Privacy: Unlike a will, a revocable trust does not become part of the public record upon your death. This means that the details of your trust and the assets it holds remain private.
- Control and flexibility: With a revocable trust, you can maintain control over your assets during your lifetime and make changes to the trust, including amending or revoking it, as your circumstances or wishes change.
- Incapacity planning: A revocable trust can include provisions that allow a designated trustee to manage your assets in the event of your incapacity. This can help avoid the need for a court-appointed guardian or conservator.
- Asset management: A revocable trust allows you to appoint a professional trustee to manage your assets, which can be beneficial if you lack the time, interest, or expertise to manage them yourself.
- Potential tax benefits: While a revocable trust generally does not provide significant tax benefits during your lifetime, it can be structured to minimize estate taxes for your beneficiaries, depending on your specific situation.
- Protection for beneficiaries: A revocable trust can provide protection for your beneficiaries, such as by including spendthrift provisions that prevent creditors from reaching a beneficiary’s interest in the trust.
Given the benefits outlined above, a living trust is easily the best option for you if you are seeking flexibility.
How Do You Set Up A Living Trust In North Carolina?
The process of setting up a living trust can be complicated. Understanding what goes into creating a living trust, along with working with an experienced legal partner who can make sure the trust aligns with your needs, can make the process much smoother.
Some things you can do in advance to make the process smoother can include the following:
- Inventory your assets: Make a comprehensive list of all your assets, including real estate, bank accounts, investments, retirement accounts, life insurance policies, vehicles, and valuable personal property. Note the estimated value of each asset and gather documentation, such as account statements, deeds, and titles.
- Identify your beneficiaries: Decide who you would like to receive your assets after your death. This may include family members, friends, or charitable organizations. Consider alternate beneficiaries in case your primary beneficiaries predecease you or are unable to inherit.
- Choose a trustee: The trustee is responsible for managing the trust according to your instructions. This person or entity should be trustworthy, responsible, and capable of managing financial matters. Consider who you want to serve as the initial trustee, as well as any successor trustees.
- Define your objectives: Consider your goals and objectives for creating the trust, such as avoiding probate, protecting assets, providing for minor children, or addressing concerns about your own incapacity. Be prepared to discuss these goals with your lawyer.
- Outline specific instructions: Think about any specific instructions you may want to include in your trust, such as when and how assets should be distributed to beneficiaries, or how assets should be used for their benefit (e.g., education, healthcare, or living expenses).
- Review existing estate planning documents: If you already have estate planning documents, such as a will or power of attorney, gather them for review. Your lawyer will need to consider these documents to ensure that your new living trust coordinates properly with your existing plan.
Taking the time to do this due diligence in advance can ensure that the resulting plan takes into account your preferences and protects your family and legacy.
Speak With Our North Carolina Trust Administration Lawyers
Setting up a living trust isn’t always easy. Still, by speaking with a North Carolina trust administration lawyer at Wilson Ratledge today, the process can and will become much easier and much more pleasant.