Hickory Trusts Attorney Provides Personalized Solutions
Estate planning lawyer gives clients an introduction to North Carolina trusts
A trust is a legal entity you create that can own property and distribute it according to your instructions. With some trusts, you can still enjoy your property while you live, and pass that property on to your loved ones while sparing them from the probate process. At Donald R. Fuller, Jr., PLLC, I am a Hickory, North Carolina trusts attorney who works to create all types of trusts to meet clients’ particular needs.
What are trusts used for?
Reasons people choose to form a trust as part of their overall estate planning strategy include:
- Avoiding probate — Assets placed in a trust pass automatically to beneficiaries upon the death of the grantor. There are no delays due to the probate court process.
- Maintaining privacy — There is no public record of the contents of a trust like there is with a will.
- Placing conditions of bequests — Trusts allow you greater flexibility in giving. You can require a beneficiary to meet certain conditions, such as finishing college or remaining sober, to receive disbursements.
- Tax avoidance — If an estate is large enough to trigger the federal estate tax, placing property in an irrevocable trust might lower the size of the estate below that threshold.
- Asset protection — Placing assets in a trust can put them beyond the reach of creditors and liability claimants. An asset protection trust also allows a beneficiary to enjoy property without being disqualified from government benefits, such as Medicaid to cover long-term care.
Trusts don’t eliminate a will altogether, but they provide complementary benefits you should consider.
Common types of trusts
The two main categories of trusts are revocable (or living) trusts and irrevocable trusts. Some popular options within these groups include:
- Special needs trusts — If you care for a relative with special needs, you can fund a trust that meets their ongoing financial obligations.
- Spendthrift trust — When a person has concerns about leaving a lump sum bequest to someone who is irresponsible with money, they can authorize periodic payments.
- Qualified Terminable Interest Property (QTIP) Trust — A QTIP trust allows individuals in a second or subsequent marriage to provide for their current spouse, while directing remaining assets to their children from their first marriage at the end of their current spouse’s life.
- Charitable remainder trust — You can provide an income for a beneficiary up to a certain date or amount, and then direct what’s left to a charity.
There are numerous other options. If you have an estate planning goal, there likely is a trust to help you meet it.
Whom to select as a trustee
The trustee manages the trust and has a fiduciary duty to act responsibly for the good of the beneficiaries. A trustee is entitled to a reasonable fee for services. Depending on the trust, you can serve in this role. If not, you should choose someone who is honest and capable of handling financial transactions.
How does a trust get created?
You create a trust by executing a deed of trust and funding it. You can also execute a will containing a testamentary trust. That way, the trust is formed and funded after you pass as part of the estate administration process.
Modifying a trust in North Carolina
Certain life events, such as marriage or the birth of a child, can prompt you to change the terms of a trust. You can modify or dissolve a revocable trust at any time during your life. However, if you’ve established an irrevocable trust, you need the permission of the trustee and beneficiaries to make any changes.
Contact an experienced trusts and estates attorney in Hickory, North Carolina
Donald R. Fuller, Jr., PLLC in Hickory drafts a wide range of trust instruments for North Carolina clients. Please call 828-639-8188 or contact me online to schedule an appointment.