Assisting Clients with the Creation and Management of Trusts in North Carolina

The first document most people include in their estate plans is a last will and testament. This estate planning tool allows the will’s creator (the testator) to name beneficiaries and establish their wishes for how their estate assets will be distributed in the event of their eventual death. But what estate planning documents may benefit you and your beneficiaries while you’re still alive? And is there a way to help your estate assets avoid the probate process? Yes, with various types of trusts, it is possible to protect your property from creditors and the probate process while allowing your beneficiaries to benefit from your estate assets while you are alive and after your death.

Whether or not your estate plan requires a trust will depend on your estate and your particular goals. Additionally, not every type of trust is suitable for every estate plan. But a well-drafted trust can help you and your loved ones avoid costly estate taxes, provide stable support to a disabled family member, protect your assets if you or a loved one require long-term care, and control your assets that they may otherwise squander.

In addition to a will and a power of attorney document, it may be advisable for you, your spouse, and your family members to consider adding a trust to your estate plan. Contact our law firm for legal guidance in drafting, managing, and revising your trust. Our trust attorney would be proud to lend legal assistance to you through this complicated process. You may schedule a free case evaluation by contacting our North Carolina law offices today.

What Are the Benefits of Trusts?

There are legal and financial reasons to consider creating a trust.

Perhaps chief among the many benefits of setting up a legally valid trust is the ability to protect your assets if you ever become mentally incapacitated in the future due to illness or injury.

Trusts, unlike wills, do not always need to go through the probate process, which can be a public ordeal. Trusts grant a certain level of privacy to yourself and your family.

Unlike a will, in which a beneficiary must wait for the testator to pass away before they can enjoy the benefits of the estate, a trust can serve its purpose during your life as well. Additionally, trusts offered a certain level of asset protection against creditors and claims.

What Are Different Types of Trusts?

There are several different types of trusts, including the following:
• Asset protection trusts. Placing assets in a trust can protect them against liability claims and creditors seeking to collect. Additionally, an asset protection trust may allow a beneficiary to enjoy the assets within the trust without being disqualified for government benefits.
• Charitable trust. Charitable trusts allow you to donate funds and estate assets to charities following your death, offering you and your surviving loved ones substantial tax benefits.
• Credit shelter trust. Large estates and spouses with substantial assets frequently use credit shelter trusts to lower their tax vulnerabilities if one spouse should pass away. Credit shelter trusts protect property for the surviving spouse.
• Irrevocable life insurance trust. This type of trust allows individuals to avoid certain taxes while ensuring the benefits of a life insurance policy.
• Living trust. A living trust is a type of revocable trust that you set up during your lifetime. As it is considered revocable, you can change the terms or dissolve the trust at any time.
• Special needs trust. This type of trust is set up for a disabled beneficiary who receives government benefits such as Social Security disability payments, Medicaid, and other government benefit programs. Without a special needs trust, the beneficiary who inherits your property may be disqualified from different government benefit programs.
• Spendthrift trust. These trusts limit a beneficiary’s money and prevent the beneficiary’s creditors from obtaining the estate assets.
• Testamentary trusts. A testamentary trust is often included in a last will. They do not go into effect until death.

There are still other types of trusts as well. Contact our law firm for legal assistance.

What is the Role of the Trustee?

The trustee is the individual or entity selected to manage assets or property in the trust. It is their duty to administer the trust according to the terms of the trust document. Failure to administer the trust in compliance with the law and the estate planning document could be considered a breach of fiduciary duties.

It is strongly recommended that trustees consider speaking with experienced trust attorneys for legal assistance in managing their trust.

What is the Difference Between a Revocable and an Irrevocable Trust?

Revocable trusts allow people to maintain control over their estate assets throughout their lifetime. The trust creator (the settlor) can modify or terminate a revocable trust whenever they wish.

Unlike revocable trusts, an irrevocable trust does not allow the trust creator to modify or revoke the trust once it has gone into effect, at least not without the express permission of every trust beneficiary. Irrevocable trusts prevent the trust creator from transferring property out of the trust and into their possession.

What Are Common Grounds for Beneficiaries Contesting a Trust?

With a well-drafted trust, it is possible to avoid estate litigation and disputes over the terms of the trust, but challenges sometimes arise as beneficiaries think they are not getting what they are owed.

Common grounds for contesting a trust in North Carolina include the following:
• Accusations of breach of fiduciary duty.
• Ambiguous language in the trust.
• Conflicts with the trustee.
• Discovery of a more recent trust.
• Disinheritance.
• Disputes over whether a trust is being properly managed.
• Property distribution disputes.
• Suspicion of fraud or forgery.
• Trust maker capacity issues.
• Undue influence.

Schedule a Free Consultation with a Qualified Trusts Lawyer Today

As your trusts attorney, we can provide several legal services that may be useful to the trust maker, a trustee, and the trust beneficiaries. We can help review strategies for transferring wealth in the most tax-efficient ways possible, represent clients in contentious estate litigation, advise clients in charitable planning, help create estate plans from the ground up, and assist trustees and beneficiaries in probate, estate, and trust administration.

To discuss your questions and concerns about your trust or estate plan, please contact our law firm to schedule a free, no-obligation case evaluation with our legal team. You may reach us at 336-962-5373.