Under North Carolina law, you don’t need a plan for your assets to be disbursed when you die. There is just one catch to this: In the United States, estates that have no will or trust plan get executed via probate. This hearing is how estates get contested, creditors get found and taxes are levied. Such hearings can be avoided with a revocable trust.
What is a revocable trust?
Unlike the irrevocable trust, a revocable trust has the criteria of a trust but with less obligation. As its name suggests, this trust can be ended or revoked at any time. Even your initial rules governing a revocable trust can be changed or revised. In some cases, you can name yourself as the trust’s beneficiary.
When writing up a trust, you need to fund it with legal, financial assets. The money deposited is for a later beneficiary. Here’s what that revocable trust consists of:
- The trustee: This person is the chosen manager of the trust. They communicate with beneficiaries and follow the creator’s guideline on estate planning.
- A beneficiary: People who receive the assets of a trust need to be named by the trust. Those individuals can only access the trust through their trustee.
- The grantor/trustor: This is the person who created the trust. Since revocable trusts are so flexible, the grantor can be the trustee and beneficiary alike.
- Your stipulations: How the trust is managed is important and can be expressed in writing. This allows you to employ concepts that are suitable for your estate.
Estate planning in North Carolina
Sheltering an inheritance or investment portfolio from creditors and taxes is possible with a trust. A revocable trust gives you financial flexibility and editorial capacity. These are achieved because the trust can be withdrawn from and generally used without penalties. Even when you need to change trustees or close the trust, you’ll incur no additional fees or consequences.