In recent years, estate planners have shifted their preference to a revocable trust as opposed to a regular Will or irrevocable trust. Revocable trusts in North Carolina have similarities to Wills in that they both plan for how your estate is handled when you die, however revocable trusts have additional benefits.
If the grantor is incapacitated, for example, revocable trusts provide the benefit of being able to be changed or canceled, giving them flexibility in cases where the changes are warranted. This alone is a big advantage over traditional irrevocable trusts and Wills.
What Is A Revocable Trust?
A revocable trust is a trust containing assets to be transferred to the beneficiaries upon the grantor’s death. In the meantime, the grantor or originator of the trust retains control, including receiving all interest from the trust.
Unlike some trusts granted from a will, a revocable trust can be changed, or even canceled. There’s a trustee responsible for dispensing the assets of a trust after the death of the owner.
Nothing in an irrevocable trust can ever be moved for any reason, but the revocable kind has more flexibility.
Why Might You Use A Revocable Trust In Estate Planning?
That’s a great question! Revocable trusts have gained popularity in estate planning in recent years for a number of reasons.
Revocable trusts allow beneficiaries to gain access to assets more quickly than through probate or guardianship, which avoids the time, expense, and effort related to transferring assets after your death.
It also allows you to avoid multiple probates if you have real property in more states than just North Carolina. Going through the probate process in multiple states, each of which likely have their own set of rules and procedures, can be a massive undertaking.
Benefits Related To The Court
With a revocable trust, the Court doesn’t interfere if you become incapacitated, or after your death – essentially, it gives you more control over what happens in the future.
This type of trust allows you to keep your family from having to endure the probate process, and reduces their stress in this situation since transactions generally go much more smoothly without probate.
Structural Advantages Of A Revocable Trust
If you decide to use a revocable trust in your estate planning, there are additional structural benefits as well.
You can put all your assets into one overarching trust, with one instructional list for your beneficiaries and trustees to follow. You can also make sure you won’t accidentally disinherit one of your beneficiaries due to a change in your situation.
This approach with revocable trusts also makes it easier to ensure your assets are distributed as fairly as possible among your beneficiaries.
Flexibility In Estate Planning
Flexibility in your estate planning is important, as our lives and situations are always changing. A revocable trust provides flexibility in your planning, such as:
- You can designate assets stay in the trust until beneficiaries hit a certain age
- You can shield assets from creditors for your beneficiaries
- You can protect assets from certain situations, such as inappropriate spending, fallout from divorce, and other situations
- You can protect the assets of minors from being taken as a result of a lawsuit
In fact, it even goes further than normal asset protection. For example, it’s significantly more difficult to contest and try to overturn than what you get with a will. This way you don’t have to stress about trying to counter anyone who might want to contest your wishes ahead of time.
On top of all of this, a revocable trust helps protect from prenuptial agreements. You get a lot more protection against prenuptial arrangements than many other options that are out there.
Contact Our North Carolina Revocable Trust Attorneys
Are you in a situation where you feel suspicious changes have been made to a revocable trust of a loved one, or that someone is financially exploiting a loved one or family member? Fiduciary Litigation Group is here and ready to help. Contact our team today at 919-229-0845 or fill out our online contact form to schedule a consultation.