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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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