Trusts in North Carolina

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TRUSTS IN NORTH CAROLINA What They Do, How They Work, and Why They’re Useful

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This presentation talks about trusts in North Carolina - what they do, how they work, and why they are useful. Learn more: http://www.cheryldavid.com/estate_planning/index.php/living-trusts/

Transcript of Trusts in North Carolina

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TRUSTS IN NORTH CAROLINA

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

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TRUSTS

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What Are Trusts?

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A trust is an entity that can own property

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Like a corporation, a trust exists by itself even

though it has no physical presence

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

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IMPORTANT PEOPLE

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The Three Main People (or Parties) in a Trust

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A person who creates the trust is called

A GRANTOR, TRUSTOR, OR A SETTLOR

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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

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THE TRUSTEE1

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What Does the Trustee Do?

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

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This is the primary duty of the trustee

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The trustee manages the property under the terms the

grantor established when making the trust

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TRUST PROPERTY2

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What Is the Trust Corpus?

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The trust corpus is the term used to describe the property

the trust owns

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

into the trust’s name

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BENEFICIARIES3

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Children, Adults, Organizations

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The grantor can select any beneficiaries he or she desires

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

other individual or organization

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DIFFERENT TYPES

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Living, Testamentary, Revocable, or Irrevocable

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EVERY TRUST IS UNIQUE,

and the numerous types available can serve multiple

different purposes

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

control the grantor has over changing its terms

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LIVING TRUSTS take effect during the grantor’s lifetime,

TESTAMENTARY TRUSTS take effect after the grantor dies

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LIVING TRUSTS take effect during the grantor’s lifetime,

TESTAMENTARY TRUSTS take effect after the grantor dies

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Grantors CAN CHANGE REVOCABLE TRUST terms

IRREVOCABLE TRUSTS are UNCHANGEABLE

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Grantors CAN CHANGE REVOCABLE TRUST terms

IRREVOCABLE TRUSTS are UNCHANGEABLE

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USES

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Multiple Uses

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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

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More complicated trusts can ensure multiple generations of

families have their property protected, or guard against

excessive estate, inheritance, or even income taxes