If you’re thinking about how to pass along assets or provide for loved ones after you’re gone, you likely have questions about trusts and estate planning. What exactly is a trust? What types are available? Should I execute one?
Setting Up a Trust in North Carolina
Revocable Living Trusts – Flexibility for the Unpredictable
The most widely used trust in North Carolina estate planning is the Revocable Living Trust. Living because we create the document while you’re alive (rather than a testamentary trust formed after death), and revocable because you retain total control regarding term modifications, asset additions/removals, or trust dissolution during your lifetime.
Beyond probate avoidance and privacy, the flexibility of revocable trusts offers uninterrupted control when circumstances change down the road. In our experience advising clients, we’ve seen many situations arise that may alter a grantor’s finances or familial needs, such as:
- Job windfalls (or losses)
- Inheritances
- Health diagnoses
- New marriages/children
- Asset value fluctuations
- Shifts in tax law
Revocable trusts allow grantors to tweak agreement terms when responding to such circumstances. Your trust will also last beyond your lifetime, and its assets can fund your beneficiaries for generations. And the power to make living adjustments ensures the document continually aligns with your wishes as you age.
Irrevocable Trusts – Protection with Permanence
Estate planners can further customize their irrevocable trusts to provide extra protection from creditors and tax agencies by executing:
- Bypass Trusts – Allows surviving spouses access to trust income while preserving estate tax exemptions for children
- Charitable Trusts – Creates income streams for non-profit organizations
- Spendthrift Trusts – Prevents irresponsible expenditures by limiting waste and beneficiary disbursements
Testamentary Trusts – Formed After You’ve Passed Away
Choosing the Right Type of Trust For Your Estate Plan
- Future funding needs – Will beneficiaries require steady income streams or parallel funding past a specific period?
- Tax implications – Do married couples with estates exceeding current estate tax thresholds require specific exemptions to better protect their heirs’ inheritances?
- Asset values – Does the value of real properties and valuable assets influence trust funding and asset distribution?
- Ages of beneficiaries – Are the beneficiaries young children who require staggered distribution and oversight?
Trusts as Part of Customized Estate Plans
At Cline Donaldson PLLC, we have enjoyed helping North Carolinians plan personalized trusts that balance asset control, tax issues, and legacy distribution.
Contact us today to get started.
About the Author
Scott Donaldson
As one of the founders of Cline Donaldson PLLC, Scott Donaldson leverages his background in law enforcement to provide exceptional representation across core practice areas, including personal injury law and estate planning. Before founding his Wilmington-based firm in 2023, Mr. Donaldson honed his understanding of the law as a Lieutenant in the esteemed New York City Sheriff’s Office.
He subsequently graduated cum laude from Campbell University’s Norman Adrian Wiggins School of Law, earning the Law School Book Award for demonstrating exceptional mastery of complex legal subjects. With an extensive legal background, Mr. Donaldson brings authoritative experience and insight when navigating each client case. He remains dedicated to upholding the highest legal standards and achieving optimal outcomes for all he represents.
