One reason North Carolina residents may want to include revocable trusts in their estate plans is to make sure that their assets are distributed in accordance with their wishes. There are many ways the distribution can be handled. The grantor can opt to use a different trust for each beneficiary. Assets can also be distributed all at once, apportioned into equal or unequal parts, allocated to favorite charities, held in a trust to be used by great-grandchildren and more.
Revocable trusts can also be used as a form of protection from creditors for heirs. This can be accomplished by restricting the rights of the beneficiaries to extract the principal from the trust. The beneficiaries can be allowed to receive an income from the trust and any other financial support needed for their support, education and maintenance as stipulated by the trust provision. The trust can provide a significant income for the heirs while protecting the assets in the trust from not only creditor suits filed against the beneficiaries, but also divorces, litigation judgments, medical expenses or investment debts.
Individuals can also use revocable trusts to ensure that their favorite charitable causes are able to benefit from their assets. After the death of the grantor’s beneficiaries, part or all the remaining assets in the trust can be distributed to specified charitable organizations.
An attorney who offers estate planning services may assist clients with creating the appropriate type of trust for their situation. A lawyer may explain how certain types of trusts, such as revocable trusts, can be used to protect assets and reduce estate taxes. Clients may be assisted with drafting properly worded trust provisions to ensure that their assets are distributed according to their wishes to intended parties and that their estate is administered in an efficient manner.