Types of Trusts
Revocable Living Trust
A Revocable Living Trust is a type of trust that can be amended, revised, and revoked during the lifetime of the grantor. On the death of the grantor, the trust becomes irrevocable and can no longer be amended, revised, or revoked. Revocable Living Trusts are typically used in conjunction with a Pour-Over Will.
Revocable Living Trusts can be beneficial in the following situations:
- Parent of minor children wishes
to have control over how and when the assets are distributed to their children
instead of relying on the fall back provisions in North Carolina law
- Parents of adult children that do not want an adult child to receive their assets in a lump sum. The desire of the parent can arise from the adult child being in an unstable marriage, high debt level, addiction to alcohol, drugs, or gambling, simply does not handle money wisely
- A landowner with real estate in many counties and/or states who wish to avoid probate in all of the jurisdictions
- A person who wishes to have someone else completely manage their assets
- Small business owners who want to provide continuity for their business’ operations
Irrevocable Living Trust
An Irrevocable Living Trust is a type of trust that cannot be revised, amended or revoked during the lifetime of the grantor. An Irrevocable Living Trust can be useful to protect assets from creditors and to assist in qualification for Medicaid after the five-year look-back period.
Special Needs Trust
A Special Needs Trust, also referred to as a Supplemental Needs Trust, is a type of trust created for a person with a disability to ensure the disabled person does not lose their SSI, Medicaid or other government benefits. There are two main types of Special Needs Trusts: 1). Self-Settled Special Needs Trust and 2). Third-Party Special Needs Trust.
A Self-Settled Special Needs Trust is funded with the disabled beneficiary’s assets. These types of trusts cannot be created by the disabled beneficiary but must be created by someone else, usually a parent, grandparent, family member, guardian, or the court.
A Third-Party Special Needs Trust is funded with the assets of someone besides the disabled beneficiary. Most often, these trusts are funded with the assets of a parent. These trusts can be funded while the parent is alive, or through a Will or living trust.
As part of our Estate Plan consultation, we will assess your personal circumstances to determine if a trust would be appropriate for you and your loved ones.
What is the Role of a Trustee?
The trustee is in charge of administering a trust in accordance with the terms of the trust instrument, Federal Law, and applicable state law. The role of the trustee will vary depending on the type of trust, assets in the trust, and the needs of the beneficiaries.
Common Trust Administration Duties:
- Understanding the terms of the trust
- Managing the trust assets
- Distributing funds to the beneficiaries on a regular basis
- Approving/disapproving requests for funds from the beneficiaries
- Paying bills for the beneficiaries
- Filing tax returns (if necessary)
- Keeping records and providing regular statements to the beneficiaries
For help with Trusts, contact Atlantic Coast Law.