Ending a trust

On Behalf of | Dec 7, 2016 | Firm News, trusts

A trust is a tool for property management, and one that is set up in North Carolina or anywhere else will eventually come to an end. In general, a trust ends when there is no more property in the trust or on the date or at the milestone set by the grantor.The grantor is the person who creates the trust. The beneficiary receives distributions from the trust, and the trustee is appointed to manage the trust.

A trust may have no more property in it when all distributions have been made to beneficiaries or when that property, such as a home, is destroyed. Milestones or end dates for a trust may be the beneficiary reaching a certain age, finishing college or getting married.

When the trust ends, if there are still assets in the trust, the trustee and beneficiary or beneficiaries might work together to distribute those assets. Ideally, the grantor will have left instructions about how this should be done, but this is not always the case. The beneficiaries and trustees may have to use their best judgment.

Trusts can be useful tools in an estate plan. They have uses at many different income levels and in varied situations. For example, a trust might protect assets from creditors, care for minor children or a relative who has special needs, or skip a generation and pass assets directly to grandchildren. A trust may be set up to preserve family wealth or to reduce estate tax. A person might place their home in a trust so that the beneficiary does not pay as much in taxes on the home, or a trust can be used for charitable donations. An attorney may be able to offer guidance regarding how a trust can be useful in a person’s specific situation.