Although it is unpleasant to think about one’s death, planning for your loved ones in advance can make it significantly easier for them after you are gone. If you do not have the necessary estate planning in place, state law will control the disposition of your property when you die, and the result may not be as beneficial for your family.
Creating a trust can ensure your assets are correctly distributed to the people you choose either while you are still living or after you pass. A compassionate Kernersville trust lawyer could work with you to develop and implement a personalized plan that achieves your goals and meets your family’s needs.
A trust is an instrument whereby a person, the settlor, transfers property to another person, known as the trustee. Upon receiving the property, the trustee agrees to do certain things, including:
A trust may have several distinct purposes, and an experienced attorney in the Kernersville area could explain the types of trusts available under state law.
Using a trust can provide significant benefits versus allowing state law to control the disposition of one’s property. Trusts can protect assets from creditors, reduce income and estate taxes, and minimize the often-lengthy probate process.
Another significant benefit of a trust is that it can provide for the unique needs of a loved one or for a family member who is not competent to manage their financial affairs. By creating a ‘special needs trust,’ a settlor can ensure that an inheritance will not disqualify their loved one from receiving certain government benefits.
Under the North Carolina Uniform Trust Code, N.C. Gen. Stat. §36C-4-402, certain elements must be met to create a valid trust. A trust is created only if there is:
Additionally, the sole trustee and the sole beneficiary may not be the same person. A person seeking to create a trust is well-advised to consult a knowledgeable Kernersville lawyer to ensure that the trust meets all legal requirements.
Trusts are often created to minimize taxes, preserve assets, and provide for family members or other loved ones who may not effectively manage their inheritance. While there are numerous different types of trusts, some are more common and generally fall into two categories.
A living trust is funded during the settlor’s lifetime. The primary purpose of this trust is to control the disposition of the settlor’s assets after they are deceased.
A testamentary trust is a provision in a will that appoints another person, the trustee, to manage the deceased’s assets. The trust is not funded until the settlor passes away. These trusts are often used to provide for children or disabled family members and to reduce estate taxes. Additionally, these trusts are often used to manage life insurance proceeds for the benefit of minor children, so your children don’t inherit a full $100,000 (or $1 Million) from alife insurance policy right after turning 18. This way, you can ensure the funds last them through the difficult transition into adulthood in your absence.
Under a revocable trust, the settlor retains ownership of their property and can change the trust terms at any time, including designating different trustees or beneficiaries. Irrevocable trusts require the settlor to relinquish ownership of their assets to the trustee, and the settlor cannot change the trust once it is created.
A revocable living trust often provides the most benefits because the trustee must act according to the settlor’s instructions, and the settlor may change the trust terms if necessary. An experienced trust lawyer in Kernersville could counsel an individual or family on the advantages and disadvantages of the different trusts to ensure their goals are achieved.
Trusts are essential legal tools that incorporate your final wishes in the event of your passing. If you seek to preserve your assets for the benefit of your loved ones, an experienced Kernersville trust lawyer could draft a legally valid trust on your behalf. Reach out to our skilled legal team for estate planning that protects you and your family.
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