Many people want to know how to ensure that the inheritance they leave behind will go to their loved ones. While writing a will is perhaps the better-known method, setting up a trust can give your beneficiaries more control over your property and assets.
At Brady Cobin Law Group, we can use our proven knowledge of trust law to protect the interests of your loved ones after you pass away. With over 35 years of practicing law in the Raleigh, NC, area, we have a deep understanding of this complex process.
Call us today at (919) 782-3500 to schedule a consultation with one of our experienced North Carolina estate planning attorneys.
What Is a Trust?
A trust is a fiduciary instrument through which a settlor (also called grantor or testator) can transfer assets out of their name and into the ownership of a trust, which a trustee manages on behalf of one or more beneficiaries. Trusts explicitly express the terms for distribution of the assets.
The settlor can themselves be the trustee for a revocable, living trust during their lifetime, then name a successor trustee to take control after their own death or incapacitation. Once in a trust, the assets are no longer legally in the name of the settlor.
A trust allows you, as settlor, to organize and allocate your assets in ways that may not be possible with a written will. Unlike wills, you can more easily adapt your trust to different circumstances and contingencies, and most importantly, trusts do not require a lengthy probate process after your death.
Trusts can therefore give you the flexibility to protect your property and assets for distribution to your named beneficiaries upon your death.
Do Different Types of Trusts Exist?
There are two main types of trusts. The first is a living trust, which the grantor establishes and controls while still living. The second is a testamentary trust, which does not come into effect until their death.
However, several subcategories of trusts also exist that may be useful for a wide range of applications:
- Supplemental or Special Needs Trusts – Primarily used to help people with medical conditions or disabilities, these trusts allow you to leave assets for a loved one without compromising their eligibility for government benefits.
- Retirement Trust – A retirement trust can help you save for your retirement without restricting your access to government benefits.
- Credit Shelter Trust – Married couples with substantial assets often use credit trusts to lower their estate taxes if one spouse passes away. This arrangement can preserve your assets and property for use by the surviving spouse.
- Charitable Trust – A charitable trust allows you to donate funds to a charity following your death, which can offer substantial tax benefits.
- Pet Trust – Pet trusts allow pet owners to leave behind funds for the continued care of their beloved animal.
Revocable vs. Irrevocable Trusts
Whether a trust if revocable or irrevocable will determine how and when a settlor can modify the terms of a trust. Each comes with its own set of advantages and disadvantages.
- Revocable Trusts are ideal for people who want to maintain control of their assets during their lifetime. A settlor can modify or terminate a revocable trust at any time, adapting the trust as necessary to address their evolving needs.
- Irrevocable Trusts, unlike revocable trusts, do not allow the settlor to modify or end the trust once in effect. These prevent a settlor from transferring their interests out of the trust and are particularly useful for those who may have difficulty managing their finances.
Create a Trust with Our Help in Raleigh, NC
As estate planning attorneys, our legal team will guide you through process of setting up one or more trusts so you can manage your assets effectively. From organizing the legal documents to navigating court issues, we at the Brady Cobin Law Group will be here to tackle all your trust-related concerns.
Contact us today at our Raleigh, NC, office by calling (919) 782-3500 to schedule a consultation.