Understanding North Carolina Trust Law
A Revocable Living Trust can be the Centerpiece of balanced Estate Plan.
What is a Revocable Living Trust?
A revocable living trust is a legal arrangement where you (the grantor) transfer assets into a trust during your lifetime, maintaining full control to modify, amend, or revoke it as needed. You typically act as the trustee, managing the assets, with a successor trustee named to take over upon your death or incapacity. Assets in the trust pass directly to beneficiaries without probate.
What is it Useful For?
Avoiding Probate: Bypasses the costly, time-consuming probate process, ensuring faster asset distribution.
Privacy: Keeps your estate details private, unlike a will, which becomes public during probate.
Incapacity Planning: Allows a successor trustee to manage assets seamlessly if you become unable to do so.
Flexibility: Easily adjustable to reflect life changes (e.g., marriage, divorce, new assets).
Asset Management: Simplifies control of diverse assets like real estate, investments, or business interests.
North Carolina Laws
Governed by NC Uniform Trust Code (NCUTC): N.C. Gen. Stat. § 36C regulates creation, administration, and termination. A revocable trust must be created by a written document, signed by the grantor, with clear intent.
Capacity: Grantor must have legal capacity to create (same as for a will).
Funding Requirement: Assets must be titled in the trust’s name to avoid probate (e.g., deeds for real estate, bank accounts).
Taxation: No separate tax ID needed; income is reported on the grantor’s personal tax return (NC follows federal rules).
Probate Avoidance: NC probate can be costly (3-7% of estate value) and lengthy (6-12 months), making trusts attractive.
Revocation: Per NCUTC, the grantor can revoke or amend anytime, unless incapacitated, without court approval.
A revocable living trust is a powerful tool for North Carolina residents seeking efficient, private estate planning. Consult our firm to tailor a trust to your needs.
