A trust is a fiduciary arrangement that allows a trustee (a third party, not usually the beneficiary), to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be drafted to deal with many situations and issues (e.g., minority, disability, spendthrift, creditor issues of a beneficiary, etc.) and can specify exactly how and when the assets benefit and pass to the beneficiaries. The trustee can be a family member and/or an independent individual or entity and there are advantages to each serving as trustee or to both serving together. While a beneficiary can be a trustee of his or her trust, depending on the circumstances the appointment of a beneficiary may not be appropriate.
A trust can be established for many reasons including, but not limited to, estate tax planning, providing for a second spouse while ensuring that your assets go to your children (issue) upon such spouse’s death, ensuring that a minor, incompetent, disabled, spendthrift, bankrupt beneficiary is provided for while protecting him or her or enable him or her to receive benefits (e.g., Medicaid for nursing home costs of care), estate administration avoidance in one state or multiple states (e.g., revocable living trust), or charitable planning, etc.
A trust can be established under a will, which is known as a testamentary trust. A trust can also be its own document, not in a will, and can be revocable (e.g., person forming it can revoke or amend it), or irrevocable (e.g., person forming it can’t amend it or revoke it except with great difficulty and usually with court approval).
Trust provisions, the picking of a trustee (initial or successor), navigating the reasons to do a trust and ensuring that the provisions chosen are correct can be complicated and overwhelming. We can help you navigate the reasons to draft a trust, help you make choices, draft the trust, explain your choices and the provisions of the trust, and ensure that the trust works with your other estate planning documents.
Contact Weaver, Bennett & Bland at (704) 844-1400 to schedule a FREE 1 hour initial estate planning consultation with one of our experienced Charlotte estate planning attorneys who can help you with either your North Carolina or South Carolina estate planning needs.