A trust is a legal entity through which a trustee holds property for the benefit of one or more beneficiaries.

There are various reasons you might need to include a trust in your estate plan.

Management of a beneficiary’s property

A trust is helpful if you wish to exercise some degree of control over property you wish to leave to someone else or if your intended beneficiary is a minor or otherwise not suited to manage his or her own inheritance.

Photo of a series of wooden blocks that spell out 'Trusts'
If you leave assets directly to a minor, typically the court will need to appoint a guardian to manage the property.The guardian will need to file accountings with the court, pay fees to court based on the value of the assets.By law, the guardianship will end at age eighteen. Most parents and grandparents understand that a typical eighteen year old is not yet mature enough to own significant assets outright.

If you have intended beneficiaries who are adults but are not suitable to manage their inheritance, a trust can be established to manage the property for the lifetime of the beneficiary or until the beneficiary reaches a more appropriate age.

Privacy

Upon your death, your Will is probate by the Clerk of Court and becomes part of the public files.Trusts generally do not become part of the public records.

Incapacity Planning

A trust created during your lifetime may assist with the management of your assets if you become incapacitated, especially if you wish to have the assistance of trust company.

Tax Planning

Depending on your circumstances, trusts can be used to reduce the taxes that might otherwise be due upon your death.

Probate Avoidance

If you create a Revocable Trust and transfer property to the trust during your lifetime, those assets may not be subject to probate at your death.Probate is the legal process through which the court oversees the distribution of your assets at your death.Although the probate process in North Carolina is not as expensive or cumbersome as many other states, it is still a process that some individuals seek to avoid.

Types of Trusts
There are various types of trusts that may be appropriate to include in your estate plan, depending on your particular circumstances:
  • Testamentary Trusts
  • Revocable Trusts
  • Special Needs Trusts
  • Life Insurance Trusts
  • Charitable Trusts