1. Control distribution of assets – You wouldn’t hand over your car keys to a child who has not had proper preparation driving, and chances are you would not want to hand over all your assets to a teenager either. But if both parents die at the same time, or while their children are still minors, the children would inherit all the assets upon their 18th birthdays. A trust allows you to specify how and when you want your children to inherit.
2. Protect assets from creditors – Placing an inheritance in a trust ensures that those assets are protected from your heir’s, or their spouse’s, creditors. A properly drafted trust can protect all your assets throughout your beneficiary’s lifetime from divorce, liability, lawsuits, and other judgments.
3. Protect inheritance from spendthrift heirs – Not everyone is good with money. If your heirs fall into that category, you can use a trust to ensure the assets are not frittered away due to spendthrift behavior.
4. Provide for children of prior marriage or relationship – You can use a trust to both provide for your current spouse and any children from a previous relationship. By doing so, you can prevent pain, confusion, and arguing, which may exist in blended family situations.
5. Provide for a special needs heir – Leaving assets outright to an heir with special needs could disqualify them from receiving important government benefits. Leaving those assets in trust bypasses this potential risk.
6. Avoid probate – Assets can pass to heirs without going through probate by using a trust, saving beneficiaries the time and expense of the probate process. Probate is an expensive, public, and unnecessary court process you can keep your family from having to deal with.
7. Protect privacy – Once a will is entered into probate, it becomes public record, and anyone may access information on what someone inherited. A trust, on the other hand, is a private document that protects your family’s privacy.
If you need to arrange a consultation with an estate planning attorney, contact Adkins Law or call (704) 274-5677.
A living trust, sometimes call a revocable trust, is a written legal document through which your assets are placed into a trust for your benefit during your lifetime.
Why Do I Want This?
In the State of North Carolina, a living trust is a great estate planning tool that allows you to have your assets owned by your trust during your lifetime and distributed after your death, or while you are still living. This type of trust is very flexible and provides you with the capability to make changes as you choose. A living trust will keep your assets from having to go through probate. Probate is the court process in which a will is verified and carried out. This process can take months to accomplish and cost copious amounts of fees. Also, having the ability to bypass probate means that your assets can be distributed immediately after your death, rather than after the entire probate process.
How Does It Work?
In order to create a living trust in North Carolina, you must complete the trust document and sign it in front of a notary. After completing the trust document, you must then transfer ownership of your assets into the trust for it to be affective. You, the grantor, will be the one in charge of setting up your living trust. When you establish such a trust, your assets will be owned in the name of the trust. In order to gain as much benefit from this trust as possible, it is advised to transfer all of the assets you can into the trust. This trust will be managed during your lifetime by the trustee. More often than not, that trustee is you. Along with the initial trustee, you must name a successor trustee to take over the trust after your passing. The successor trustee will then be in charge of continuing to manage your assets, as well as distributing them to your beneficiaries according to the terms you specified.