Estate planning is an important step you should take to protect your own interests, your assets, and your family. When thinking about how you are preparing for the future, you may be wondering, “Do I need a trust in North Carolina?”
Depending on your financial situation, family needs, other estate planning documents, and personal and financial goals, establishing a trust can provide invaluable advantages. Learning more about trusts and how they can provide financial and legal protections can help you make an informed decision about your estate plan.
Here’s the breakdown, or watch the full video for Tiffany’s complete explanation with all three case studies.
Why Having an Estate Plan Is Important for North Carolina Families
An estate plan is a long-term strategy that allows you to determine who receives your property after death, as well as protect your financial, personal, and healthcare affairs during your lifetime. For many North Carolina families, a trust is an integral part of their estate planning strategy.
Not having a trust or other estate plan can have many disadvantages. If you pass away without an estate plan, your assets must go through the probate process, which can be lengthy, expensive, and stressful for families. Of adults over 55, 67% believe that having affairs in order means having a will or trust that directs how their estate should be dispersed. Alarmingly, only 24% of Americans have a will, and even fewer have a trust.
What Is a Trust
A trust is a legal arrangement that allows a grantor to transfer assets to a trustee, who can manage and distribute those assets. The grantor is able to provide specific guidelines and rules for how the trust should be handled, such as by naming the trustee, declaring who the beneficiaries are, and deciding how the money can be used.
Most people think of a trust as a tool that begins taking effect after you pass away. However, many types of trusts also provide benefits as you age, such as by protecting Medicaid eligibility or avoiding creditor claims. The specifics of a trust case depend on the unique legal documents you create, your personal wishes, and the type of trust you choose to establish, such as a revocable living trust or an irrevocable trust.
Advantages of Creating a Trust in North Carolina
There are many reasons why a trust may be the right option for your estate plan. Many different individuals and families can benefit from a trust, regardless of the size of their estate or how simple or complex their distribution goals are. Some of the top reasons North Carolinians choose to establish a trust include:
Avoiding probate. Many types of trusts avoid probate, the court-supervised process of administering a person’s estate. This means assets are transferred directly, which is more efficient and cost-effective for family members. It also may help beneficiaries and loved ones avoid contested courtroom battles.
Increased privacy. While wills and many other documents that go through probate become public, trusts offer more confidentiality. This makes trusts important for families who wish to keep their personal and financial information private.
Planning for incapacity. You may need a trust if you do not have a plan for your affairs if you become ill or incapacitated. In this situation, a trustee can step in and manage your trust assets for you.
Greater protection for high-value assets. Individuals with high-value assets, such as a home, may appreciate that trusts offer greater protection from creditor claims and may also help avoid high taxes. In North Carolina, the average home is $340,430, which can be even higher in areas such as the Highlands, Governors Club, or Marvin.
If you are looking to benefit from any of these advantages, you should hire an estate planning lawyer who can help you evaluate your legal options and draft a comprehensive, personalized trust document.
Learn How a Lawyer From Thomas & Webber Can Help
The estate planning lawyers at Thomas & Webber bring years of hands-on experience with North Carolina’s trust laws, which they use to provide strategic guidance for individuals preparing for their future. We take the time to understand your personal goals, so you have a trust that gives you peace of mind that your assets and personal affairs have a plan that aligns with your interests.
FAQs
Q: Is it Better to Have a Will or a Trust in North Carolina?
A: Whether it is better to set up a will or trust in North Carolina depends on your individual goals and circumstances. A will is a broad estate planning document that can be important for asset distribution and protecting minor children. However, you may need a trust if you are looking for additional benefits when it comes to things such as avoiding probate or planning for incapacity.
Q: How Much Does It Cost to Create a Trust in North Carolina?
A: The cost of creating a trust depends on the type of trust you are creating, the complexity of your estate, and which North Carolina estate planning lawyer you choose to work with. Trusts with fewer assets or a simpler division plan typically cost less compared to more complex trusts designed to navigate complex family dynamics or asset protections.
Q: What Are the Disadvantages of a Trust?
A: Some of the disadvantages of a trust include that they involve more upfront work compared to a will, may require modifications, and you must retitle assets into the trust for it to be effective. If you speak with a North Carolina estate planning lawyer, they can explain both the advantages and disadvantages so you can decide if a trust is right for you.
Q: What Is the Difference Between a Revocable Living Trust and an Irrevocable Trust?
A: A revocable living trust and an irrevocable trust are both common trusts, but they differ in asset protection and their ability to be modified. Revocable living trusts are a common option because they allow you to maintain control over your assets throughout your life, including the ability to change or revoke the trust. An irrevocable trust cannot be easily modified, but it provides greater benefits when it comes to asset protection and long-term medical care planning.
Hire an Estate Planning Lawyer Today
If you do not have an estate plan or are seeking particular advantages from your legal strategy, you may need to establish a trust. Contact Thomas & Webber to speak with a lawyer about your trust case.
Tiffany Webber is the Owner and an attorney at Thomas & Webber, serving clients from offices in Mooresville, Huntersville, and Denver, North Carolina. She focuses her practice on real estate and estate planning, bringing more than nine years of legal experience. Tiffany is admitted to the North Carolina State Bar (2016) and earned her J.D. cum laude from Charlotte School of Law, graduating in the top 10% of her class. She has been recognized as a North Carolina Lawyers Weekly Rising Star (2021) and a Super Lawyers Rising Star (2023).
