Estates and Trusts

Planning for the future of a loved one with special needs is a critical task that demands careful consideration. Many North Carolina families are unaware of the estate planning tools at their disposal, specifically Special Needs Trusts. These trusts provide an efficient way to ensure a better quality of life for your loved one while preserving their eligibility for government benefits.

What Is a Special Needs Trust?

A Special Needs Trust (SNT) is a legal instrument designed to manage assets for the benefit of a person with disabilities. This type of trust aims to supplement, rather than replace, governmental assistance programs such as Medicaid or Supplemental Security Income (SSI). The trustee manages the assets for the benefit of the disabled individual while ensuring that the assets are not counted for means-tested programs.

When Should a Special Needs Trust Be Used?

A Special Needs Trust becomes crucial in several circumstances:

Inheritance Planning

Leaving an outright inheritance can disqualify your loved one from receiving essential government benefits. A Special Needs Trust allows them to inherit assets without affecting their eligibility.

Litigation Awards

If your loved one receives a significant amount of money due to personal injury or other litigation settlements, the sum should ideally go into an SNT to protect their financial future.

Lifetime Gifts

If you or other family members wish to gift assets during your lifetime, placing them in an SNT ensures these gifts won’t jeopardize the individual’s eligibility for government programs.

How to Structure a Special Needs Trust

While the creation of an SNT can be complex, the basic components are as follows:

Choosing a Trustee

Selecting a capable trustee is critical. They will manage the trust assets and make disbursements. The trustee should be familiar with the beneficiary’s needs and also understand the rules surrounding government benefits.

Funding the Trust

You can fund an SNT with various assets such as cash, real estate, or investments. Depending on your situation, the trust can be either revocable or irrevocable.

Type of Trust

There are different types of SNTs, including first-party trusts funded with the beneficiary’s assets and third-party trusts funded with assets from someone other than the beneficiary.

Legal Formalities

Drawing up the trust document should only be done by a qualified North Carolina special needs trust attorney, as state laws can have unique provisions affecting SNTs.

Key Takeaways

If you’re looking to create a special needs trust to protect your loved one after your passing, here are the key takeaways you need:

• A Special Needs Trust preserves government benefits eligibility while enhancing the quality of life for your loved one.
• An SNT is essential for inheritance planning, litigation awards, and lifetime gifts.
• Proper structuring of an SNT is complex but necessary for its effectiveness.

Schedule a Consultation With Our North Carolina Estate Planning Team Today

Securing the future of a loved one with special needs requires diligent planning and legal expertise. At Wilson Ratledge, we are committed to offering you the best legal guidance tailored to your unique needs. Contact us today to schedule a consultation and discuss how a Special Needs Trust can be a critical part of your estate plan.

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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).
6. 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.

North Carolina Law Has Provisions For You To Arrange Care For Your Pets As Part Of Your Estate Planning

People love their pets. To outsiders – particularly those who do not own pets – love may sometimes seem excessive. The fact remains, though, that there is a bond between pets and their owners. One of the essential parts of that bond is the obligation of the owner to provide care for the pets, which can’t provide for themselves. The owner provides love, food, and shelter in exchange for loyalty and companionship from the pets. So what happens to your pets when you die? 

Fortunately, North Carolina law has provisions that make it easy to ensure that you can continue to provide proper care for your pets even after you are gone without relying upon someone’s promise that they will take care of things. Our estate planning attorneys at Wilson Ratledge explain more below.

North Carolina Lets You Take Legal Action In Your Will To Care For Your Pets When You No Longer Are There To Do So

In 1995, the North Carolina legislature passed a statute enabling pet owners to establish a testamentary trust to care for their pets after the owner has passed away. A testamentary trust is one established in your will that provides a governing structure intended for a particular purpose and funds it with a part of your estate to pay for whatever purpose the trust is designed to serve, which in this case would be the care of your pets. Under the statute, the trust is to benefit those pets of yours that are alive at the time of the establishment of the trust. However, you can work with your estate planner to update the trust to include any pets you obtained after the initial creation of the trust. The trust terminates once the last surviving animal covered under the trust passes away.

A trust for your pet is every bit as legally enforceable as any other trust, meaning the trustee you designate has a fiduciary obligation to adequately provide for the care of the pets identified in the trust. The trustee uses the money placed into the trust to pay for that care. That care can be as described explicitly in the trust as you like. You can identify particular veterinarians to provide medical care for the pets, how often the pets should be taken to the vet, a specific brand of pet food, or even the frequency of visits to the dog park. Your pet, your trust.

You can identify someone to serve as a trustee who is required to either provide care for the pets identified in the trust or arrange for that care. In either case, the trust pays for the maintenance of the covered pets for as long as they live, after which any funds remaining in the trust are distributed as directed in the trust document. During the course of the trust, no principal placed in the trust, nor investment income earned by the trust, can be used by the trustee or for any other purpose other than the care of the designated pets that are the beneficiaries of the trust.

If you don’t designate a person to manage the trust, the clerk of the superior court with jurisdiction over the trust can do so upon the application of “a person.” Given that vagary, it is probably best to designate someone you know who will properly care for your pets. You need to ensure that the person you designate is willing to serve and will be able to do so when the time comes, or else the clerk of the superior court will appoint a different trustee.

Work Closely With Your Estate Planner On Your Pet Trust

Your pet trust can include as much specificity as you like. You need to make clear to your estate planner exactly what you want to accomplish with the trust. If you wish for a particular pet food to be given to your pets, or daily dog park visits, you better tell your estate planner. Telling the person you designate as trustee is not legally enforceable. On the other hand, it might not be wise to make serving as a trustee too burdensome. You need to talk to the person you plan to designate as a trustee to ensure that person is willing to do what the trust requires. 

You also need to communicate clearly to your estate planner what pets are to be covered by the trust. In case you might outlive the pets originally covered by the trust and get more pets, be sure to have your estate planner draft the trust to include any pets you acquire later. Otherwise, those pets will not be covered.

If You Want To Establish A Pet Care Trust, Talk To The Estate Planning Attorneys of Wilson Ratledge

While many people might think it a little silly to provide for the care of your pets via a trust in your will, in reality, it is both quite responsible and can be a source of peace of mind knowing that your pets will be cared for according to your wishes when you pass away. The estate planning attorneys of Wilson Ratledge can help you with that endeavor and any other estate-planning matters. Contact us today. Our knowledge and experience regarding estate planning will help you easily navigate the process.

Want to protect your firearms and pass them down to future generations? A gun trust in North Carolina may be the solution. In our latest article, the North Carolina estate planning attorneys at Wilson Ratledge will explain what a gun trust is and how to set one up.

What is a Gun Trust?

A gun trust, also known as a firearms trust, is a legal entity that you create to hold and manage firearms. The trust is controlled by a trustee, who is responsible for managing the firearms and ensuring that they are used in compliance with state and federal laws. Beneficiaries of the trust, known as trust beneficiaries, are individuals who are allowed to access and use the firearms.

Benefits of a Gun Trust in North Carolina

There are several benefits to creating a gun trust in North Carolina. Some of the most notable include:

Allowing Multiple Individuals To Access and Use the Firearms

A gun trust allows multiple individuals, known as trust beneficiaries, to access and use the firearms. This can be especially useful for families who want to ensure that multiple members can use their guns for hunting or self-defense.

Protection from Creditors 

Assets held in a trust are generally protected from creditors. This means that if the trustee or one of the trust beneficiaries were to become the subject of a lawsuit, the firearms held in the trust would not be at risk of being seized.

Streamlining the Process for Obtaining Certain Types of Firearms

In North Carolina, certain types of firearms, such as those subject to the National Firearms Act (NFA), require a special process for acquisition and ownership. A gun trust can streamline this process and make obtaining these types of firearms easier.

Avoiding Probate

When a person passes away, their assets go through probate. Probate can be a lengthy and expensive process, and it can also make the assets public record. A gun trust can help to avoid probate and keep the assets private.

Avoiding the Need for a Will

A North Carolina gun trust can be used to transfer firearms to beneficiaries upon the death of the trustee, avoiding the need for a will.

How to Set Up a Gun Trust in North Carolina

Setting up a gun trust in North Carolina is a relatively simple process. It involves the following steps:

Choose a Trustee 

The trustee is the individual who will be responsible for managing the firearms and ensuring that they are used in compliance with state and federal laws. It is essential to choose a trustee that you trust and who has a good understanding of firearms and the laws surrounding them.

Choose Trust Beneficiaries 

Trust beneficiaries are the individuals who will be allowed to access and use the firearms. It is crucial to consider the age and experience level of the beneficiaries to avoid any potential legal issues that may arise from firearm misuse.

Have an Attorney Draft the Trust Agreement

The trust agreement is the document that sets out the terms and conditions of the trust. It should include information such as the trustee’s responsibilities, the trust beneficiaries, and the firearms to be held in the trust. The trust agreement should also include instructions for what should happen to the firearms in the event of the trustee’s death or incapacity.

Fund the Trust 

The trust must be funded with the firearms that will be held in the trust. This can be done by transferring ownership of the firearms to the trust or by purchasing firearms using trust funds.

Register the Trust 

In North Carolina, a gun trust must be registered with the state before acquiring any firearms subject to the National Firearms Act (NFA). The registration process will include submitting a copy of the trust agreement and a list of the firearms to be held in the trust.

Review and Update 

It is important to review and update the trust agreement regularly to ensure that it continues to meet the needs of the trustee and beneficiaries and complies with any changes in the law.

Contact Our Law Firm for Assistance

Gun trusts can be useful for managing firearms in North Carolina, but they are subject to an extremely intricate and complex web of state and federal laws. If you’re interested in setting up a gun trust, it’s important to work with one of our North Carolina trust attorneys at Wilson Ratledge. Our attorneys specialize in North Carolina firearms law, and we can help you set one up that meets your needs. 

A spendthrift trust is created by an individual (the settlor) for the benefit of another individual (the beneficiary). It is commonly used to protect the assets for the benefit of an individual who may not be financially savvy or who may be at risk of incurring significant debts. 

The North Carolina estate planning attorneys at Wilson Ratledge explain the main reasons why people consider setting up a spendthrift trust which are as follows:

1. Protection of Assets from Creditors

One of the primary advantages of a spendthrift trust is that it provides protection for the trust’s assets from the beneficiary’s creditors. This means that the assets of the trust are not subject to seizure by the beneficiary’s creditors to satisfy outstanding debts. This can be an important consideration for individuals at risk of incurring significant debts, such as those with a history of financial irresponsibility or those at risk of legal liability.

2. Professional Asset Management

Another advantage of a spendthrift trust is that it allows for professional asset management. The trustee, who is typically a financial institution or an individual with expertise in financial management, is responsible for managing the assets of the trust in a way that is consistent with the terms of the trust agreement. Even with smaller trusts for which an institutional trustee may not be cost effective, the trustee can engage the services of a financial advisor for this purpose.  This can provide peace of mind for the settlor, knowing that the trust assets are being managed by a professional acting in the beneficiary’s best interests.

3. Flexibility

Spendthrift trusts can also be tailored to meet the specific needs and goals of the settlor and beneficiary. The terms of the trust agreement can specify how the assets of the trust are to be used, such as to provide for the basic needs of the beneficiary or to support a particular hobby or interest. This flexibility allows the settlor to customize the trust to meet their specific goals and objectives.

4. Avoidance of Probate

In North Carolina, assets held in a trust are not subject to the probate process. This means that upon the settlor’s death, the assets of the trust will continue to held for the benefit of the beneficiary, and if appropriate at some later time, transferred to the beneficiary without the need for court involvement. This can be a significant advantage for individuals who wish to avoid the time and expense of probate.

Setting Up a Spendthrift Trust in North Carolina

Step 1: Choose a Trustee

The first step in setting up a spendthrift trust in North Carolina is to choose a trustee. The trustee can be an individual or a financial institution. The settlor should choose a trustee that they trust to manage the assets of the trust and make decisions in the best interests of the beneficiary.

Step 2: Determine the Purpose of the Trust

The settlor should also determine the purpose of the trust. This can include providing for the beneficiary’s basic needs, such as food, shelter, and medical care, or it can be more specific, such as providing for education or supporting a particular hobby or interest.

Step 3: Gather the Necessary Documentation

To set up a spendthrift trust in North Carolina, the settlor will need to work with an attorney to create the following documentation:

a. A written trust agreement: This document outlines the terms of the trust, including the purpose of the trust, the powers and duties of the trustee, and the rights of the beneficiary.

b. A list of the assets to be placed in the trust: This can include cash, stocks, real estate, or other assets.

c. A certificate of trust: This is a summary of the trust agreement that can be used to provide evidence of the existence of the trust to third parties.

Step 4: Fund the Trust

Once the trust agreement and other necessary documentation have been gathered, the settlor will need to transfer the assets to be placed in the trust to the trustee. This is known as “funding” the trust. The assets should be transferred to the trustee in a manner that is consistent with the terms of the trust agreement.

Step 5: Review and Update the Trust

After the trust has been set up and funded, it is essential to periodically review and update the trust to ensure that it continues to meet the needs of the settlor and the beneficiary. This may involve making changes to the trust agreement, adding or removing assets from the trust, or appointing a new trustee. 

Wilson Ratledge, PLLC

Working with an estate planning lawyer in North Carolina is advisable if you need to set up a spendthrift trust in the Tarheel State. We can also help you review and update the trust as per your wishes to ensure that it remains effective and in compliance with all your future aspirations.

In today’s world, it is essential to have a customized estate plan set up to protect your assets. The use of various trusts can accomplish this. There are different types of trusts, each with unique benefits. By understanding the different types of trusts, you can choose the best one for your needs. 

The Raleigh trust attorneys at Wilson Ratledge explain more on this topic.

What Are Trusts?

Generally speaking, a trust is a legal instrument in which one person (the trustor) gives another person or party (the trustee) the legal title to the property for the benefit of another person or people (the beneficiaries). A trust can be created for various purposes, including estate planning and philanthropy. There are three main types of trusts: revocable trusts, irrevocable trusts, and testamentary trusts. 

When creating a trust, individuals should consider the following factors: 

a. Beneficiary: The beneficiary of a trust is the person or organization that will receive the benefits of the estate. The beneficiary may be someone you know well, a loved one, or an organization you’d like to support.

b. The trustee: The trustee is responsible for administering the trust and distributing its assets according to its terms. The trustee must be someone you can trust to act in your best interests.

c. Purpose of the trust: A trust can have many purposes, including estate planning, charitable giving, and property protection from probate costs.

There are several benefits to using trusts as an estate planning tool. One advantage is that trusts are often easy to create. They are also flexible. This means they can be tailored to meet your specific needs without going through lengthy legal procedures.

In addition, trusts are most notable for their ability to help your loved ones avoid probate and they also have the potential for tax advantages. 

How Trusts Work To Help Your Loved Ones Avoid Probate

When a loved one dies, it can be an extremely difficult time. In North Carolina, however, when a person dies without a solid form of estate planning, their loved ones have to go through probate. 

So, what is probate? 

Probate is the legal process of transferring property and assets from a deceased person’s estate to their beneficiaries. This can be a long and complicated process and can be expensive. But a trust can help avoid probate altogether. 

Remember, a trust is a legal document that allows one or more people (the trustees) to manage someone’s estate for them. As the deceased’s assets are now the trust’s property, the assets in the trust can be transferred directly to the beneficiaries instead of going through probate. 

Types of Trusts in North Carolina

a. Revocable trusts: Revocable trusts are designed to provide estate planning benefits for individuals who may want to alter their trusts at some point in the future. Revocable trusts can also be terminated by the trustee, typically in cases of a change in circumstances. This trust is generally used by people who want to control their estate but do not want their families to have to deal with probate or other estate-related tasks after their passing.

b. Irrevocable trusts: The terms of an irrevocable trust, as the name implies, cannot be changed once created. However, an irrevocable trust is a type of legal estate planning tool that can provide significant benefits for the creator and beneficiaries. Irrevocable trusts are typically created for individuals who want to protect their assets and avoid probate. They can be a great option for people who want to create a lasting legacy. Irrevocable trusts can provide tax advantages, such as exemption from capital gains taxes and inheritance taxes, and they can provide security for the trust assets.

c. Testamentary trusts: A testamentary trust enables you to transfer all or a portion of your assets upon your death so that they can be managed in line with your desires. Unlike the trusts above, this type of trust does not begin to “function” until after the trustor’s passing.

Need To Set Up a Trust?

In conclusion, trusts are a vehicle for preserving and protecting your assets. By understanding how trusts work and what kind of protection they provide, you can make informed decisions about the best way to safeguard your assets. If you have any questions about trusts or need help setting one up, please don’t hesitate to contact a North Carolina estate planning and trust attorney at the Wilson Ratledge Law Firm. Our North Carolina trust specialists are very knowledgeable and would be happy to help you.