Many people in North Carolina want to pass on their assets to their children, and they may see the advantages of planning early on for wealth transfer. By creating trusts earlier in life, people can not only put their estate plans in place but also reap significant tax benefits. At the same time, many people are concerned that they could actually impact their children’s lives negatively by letting them know that a large trust fund will be waiting for them.
In general, trustees responsible for managing a trust have an obligation to inform the beneficiaries of the trust and how it is being administered. This is one reason why many people increasingly opt for silent trusts when planning for the future. When someone creates a silent trust, they explicitly waive the trustee’s duty to inform the beneficiary. Therefore, the trust can be created and tax benefits reaped without telling the future recipient that they can expect to receive a trust fund in the future. Many people opt for silent trusts in order to encourage their children or other young beneficiaries to find their own successful path in life without planning to rely on the funds in the trust.
Silent trusts aren’t created to remain a secret forever. Instead, the period stretches until the beneficiaries reach a certain age or a specific number of years have passed. In many cases, the age of 25 is a common option for informing beneficiaries about the existence of a previously silent trust.
When people are thinking about how to handle their assets, they may wonder about the many different options available. A trust administration or estate planning attorney may be able to draft these key documents and clients people on the best possible course of action to provide for their loved ones and protect their wealth.