When North Carolina residents die, their estate may go through the probate process. This can be a long and expensive process that prevents beneficiaries from getting their inheritance. However, this process may be avoided if people create a trust to hold some or all of their assets. The assets in the trust avoid probate because they are owned by the trust as opposed to the estate.
Trusts may also be valuable for those who wish to protect beneficiaries from having their inheritance taken away by creditors. If assets are owned by a person’s estate, creditors may place claims to liquidate them to pay credit card or other outstanding debt balances. Those who have special needs children or grandchildren may also benefit from creating a trust as they may keep assets while also keeping their government benefits.
Having a trust may make it easier to reduce estate taxes. Marital trusts are permissible under federal law, and they can prevent those with larger estates from giving more than necessary to the federal government. Finally, trusts may be beneficial because they can administer assets given to minors without the need for court oversight.
The use of a trust may be beneficial for parents, grandparents or anyone else who wishes to preserve their assets after passing on. To learn more about creating a trust, it may be worthwhile to speak with an attorney who has estate planning experience and who explain in detail how trusts work and which trust may be right for an individual. Those who have trusts already may wish to review them regularly and consult with legal counsel if they need to be changed.