People in North Carolina have many options to choose from when deciding how they want to protect the assets they intend to leave to heirs. However, an irrevocable trust has benefits that are more ideal for some estate holders.
Irrevocable trusts allow individuals to retain assets on behalf of another person. Once the terms of the trust are set, no future alterations can be made to the trust document.
There is more than one way to set up an irrevocable trust. The trust can be established during a person’s lifetime after the assets are properly transferred and an agreement is signed. The trustee will be obligated to adhere to the trust’s terms, which will stipulate how assets are to be managed and which recipients will receive the trust’s distributions.
The terms for an irrevocable trust can also be detailed in other estate planning documents that become effective when an individual dies. Wills often contain provisions for irrevocable trusts to be established after the creator of the trust dies.
Changes can be made to a will during a person’s lifetime, which means that the stipulations of the irrevocable trust could be modified as well. After the individual’s death, the executor of the estate will use the instructions in the will to establish the trust. The initial trustee will then acquire control of the trust and follow its terms.
An individual who is considering using trusts to protect assets for beneficiaries could speak with an estate planning attorney about which type of trust may be appropriate for their situation. Depending on the client’s assets and goals, the attorney may recommend using testamentary, spendthrift, or living trust.