Trusts in North Carolina

TRUSTS IN NORTH CAROLINA

What They Do, How They Work, and Why They’re Useful

TRUSTS

What Are Trusts?

A trust is an entity that can own property

Like a corporation, a trust exists by itself even

though it has no physical presence

Also like corporations, trusts can own property for the benefit of others

IMPORTANT PEOPLE

The Three Main People (or Parties) in a Trust

A person who creates the trust is called

A GRANTOR, TRUSTOR, OR A SETTLOR

That person chooses someone who will manage the trust

property, known as the TRUSTEE,

and one or more BENEFICIARIES

who get to use, or benefit from, the trust property

THE TRUSTEE1

What Does the Trustee Do?

As with a corporation, the property the trust owns needs someone to manage it

This is the primary duty of the trustee

The trustee manages the property under the terms the

grantor established when making the trust

TRUST PROPERTY2

What Is the Trust Corpus?

The trust corpus is the term used to describe the property

the trust owns

When the grantor creates the trust, he or she decides what kinds of property to transfer

into the trust’s name

BENEFICIARIES3

Children, Adults, Organizations

The grantor can select any beneficiaries he or she desires

The beneficiaries can include the grantor’s children, other family members, the grantor him or herself, or nearly any

other individual or organization

DIFFERENT TYPES

Living, Testamentary, Revocable, or Irrevocable

EVERY TRUST IS UNIQUE,

and the numerous types available can serve multiple

different purposes

Generally speaking, a trust is defined by when the trust takes effect and how much

control the grantor has over changing its terms

LIVING TRUSTS take effect during the grantor’s lifetime,

TESTAMENTARY TRUSTS take effect after the grantor dies

LIVING TRUSTS take effect during the grantor’s lifetime,

TESTAMENTARY TRUSTS take effect after the grantor dies

Grantors CAN CHANGE REVOCABLE TRUST terms

IRREVOCABLE TRUSTS are UNCHANGEABLE

Grantors CAN CHANGE REVOCABLE TRUST terms

IRREVOCABLE TRUSTS are UNCHANGEABLE

USES

Multiple Uses

Some trusts are ideal for simple purposes, such as minimizing or avoiding probate, or ensuring a trustee manages a young child’s inheritance until the child is old

enough

More complicated trusts can ensure multiple generations of

families have their property protected, or guard against

excessive estate, inheritance, or even income taxes

LEARN MORE ABOUT

TRUSTS IN NORTH CAROLINA

LEARN MORE ABOUT TRUSTS IN NORTH CAROLINA

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