Death is inevitable for everyone.  As much as we’d like to avoid the conversation, you can help your loved ones through a difficult time by having a proper estate plan in place.

The first question many clients ask is “Do I need a trust?”  The answer – “It depends.”

At North Carolina Estate Planning and Fiduciary Law, our attorneys understand that creating an effective estate plan begins with investing time in each of our clients to get a comprehensive picture of specific needs and circumstances. During your consultation, our estate planning attorneys will work closely with you to create an individualized plan tailored to your goals and objectives. We will review your assets and how they are titled, your family dynamics, and your ultimate goals for how you’d like your estate distributed. We can then help you create a simple estate plan or a comprehensive plan with can include the following solutions:

• Last Will and Testament

• Revocable Living Trusts

• Charitable Trusts

• Power of Attorney

• Health Care Power of Attorney and Medical Directives

• Irrevocable Trusts

• Special Needs Trust

• Testamentary Trusts 

Beneficiary Designations

First, it’s important to point out that not all assets are distributed pursuant to the terms of a will or trust.  IRAs, 401(k)s, annuities, and life insurance policies are beneficiary designated assets.  This means you’ll complete a form with the company that holds the account or policy to give direct instructions as to how each specific account will be distributed.These types of assets will pass on to beneficiaries outside of your estate upon your death. If you have provided the proper beneficiary designations for your accounts and those individuals survive you. 

The remainder of your assets, such as personal property, bank accounts, and real estate, are distributed pursuant to the terms of your will or trust, or through intestate succession laws in the absence of either document. 

Last Will and Testament

Having a last will and testament is a document that provides for the distribution of your assets to your intended beneficiaries. This is accomplished by a testator, the person making a testament, leaving their final instructions for distribution of their estate upon their death by executing a will. A will is also a tool used to leave other special instructions such as naming a guardian for minor children or leaving small monetary gifts or gifts of tangible personal property to beneficiaries. 

Upon death, the Last Will and Testament is filed with the Clerk of Court. The estate is then probated, a process where all assets are accounted for, debts are paid, and then remaining assets distributed to beneficiaries, with oversight from the Clerk of Court.

Trusts 

For some situations having a will to establish one’s final wishes for property disposition may not be ideal. Trusts have a unique ability to fulfill a wide variety of needs that wills are unable to accomplish. Depending on the needs and objectives of the grantor and beneficiaries, trusts can be created either as an alternative to a will or in conjunction with one.  

At North Carolina Estate Planning and Fiduciary Law, our attorneys understand that creating an effective estate plan begins with investing time in each of our clients to get a comprehensive picture of specific needs and circumstances. Determining the most appropriate type of trust for your needs can be a complex inquiry best handled by an experienced estate planning attorney. 

During your estate planning consultation, our estate planning attorneys will work closely with you to create an individualized plan tailored to your goals and objectives. We will review your assets and how they are titled, your family dynamics, and your ultimate goals for how you’d like your estate distributed. We can then help you create a simple estate plan or a comprehensive plan that includes a combination of available solutions that meet your individual needs. 

Types of Trusts

There are two primary types of trusts that are dependent on how the trust is established. When created during the lifetime of a grantor it is referred to as a living trust, however, if a trust is created but not funded until the grantor passes away it is referred to as a testamentary trust. In addition to the two primary categories there are several types of trusts. The most well known types include the following:

• Charitable Trust - Allows an individual to donate funds to a charity after death, in exchange for providing substantial tax benefits. 

• Irrevocable Life Insurance Trus (ILIT) - Provides a means to provide beneficiaries with life insurance benefits tax free. 

• Credit Shelter Trust - Trust that allows married couples to preserve wealth for the surviving spouse while minimizing estate taxes. 

• Retirement Trust - Enables individuals to save for retirement without limiting an individual's ability to qualify for government benefits. 

• Supplement or Special Needs Trust - These can assist individuals who have medical issues or disabilities and allow assets to be transferred to them in a way that does not not compromise their eligibility for government benefits. 

• Pet & Equine Trust- A recently popular option among pet enthusiasts provides a means for ensuring pets are cared for after they are gone. Afterall their care and maintenance costs can quickly add up and become a burden for future care givers.

Revocable Trust

A revocable trust is an estate planning tool used by many individuals in estate planning. The benefit of a revocable trust is that assets that are transferred out of an individual's name and into the trust to avoid probate. Transferring property into the trust doesn’t mean that control over the assets has to be sacrificed, during the individual lifetime they can name themself as trustee and remain in control of the property.  Using revocable trusts to avoid  probate means that there is no oversight from the court, and the successor trustee   named can access assets, pay debts, and distribute the remainder to the beneficiaries a bit quicker than if the estate had gone through probate.

Additionally, the terms of a revocable trust are private whereas wills are filed with the Clerk of Court and become public record.  Anyone who is curious or nosy can request a copy of the will and see who you named as beneficiaries.

In conjunction with a revocable trust it is also recommended that a “pour-over will” be put in place.  The pour-over will be filed with the Clerk of Court, however, it simply states that your trust is the beneficiary in order to protect your privacy and any assets not titled in your trust at the time of your death will pour over into it, leaving no loose ends. 

Irrevocable Trust

Trusts also can be established as irrevocable, meaning that the grantor is not allowed to make modifications after it is established. An advantage of irrevocable trusts is that the assets are transferred out of the settlor’s taxable estate and no longer are counted toward their estate taxes. However the named trustee, not the grantor, is provided with control and management over the assets in the trust. 

If you are considering establishing a trust as part of your estate plan, it is critical that you have an experienced attorney assist you in the creation and implementation of the trust. Ensuring that the trust is created and set up correctly not only maintains the integrity of the trust but also provides assurance that your wishes will be enforceable. 

At North Carolina Estate Planning & Fiduciary Law our attorneys can assist you in preparing the necessary documents to ensure your wishes are carried out properly and in the most efficient manner. Our senior partner, Jim Hickmon is a Board Certified Specialist in Estate Planning and Probate Law. He has worked closely with numerous individuals and business owners and has over 20 years experience in assisting clients in all aspects of estate planning. From complex lifetime and post-mortem issues to estate planning and administration, our attorneys are knowledgeable about all facets of estate matters and can help you make informed decisions about the right estate plan for your needs.  

To get information and legal answers about the best estate plan for your circumstances the first step is to contact us for a confidential consultation  at (704) 248-6325, or complete our online form.