Revocable Living Trust Attorney in North Carolina

What a Revocable Living Trust Can Accomplish

A revocable trust is not automatically better than a will. It is one estate planning tool, and its usefulness depends on the property you own and the goals you want the plan to accomplish.

Keep Properly Transferred Property Outside Probate

Property owned by the trust at death generally does not have to pass through the estate probate process simply because the settlor died.

Instead, the trustee administers that property under the trust terms.

That can allow trust-owned assets to be managed and distributed without going through the probate administration that applies to assets owned individually at death.

This benefit depends on funding. Signing a trust does not automatically transfer every account, home, or investment you own into it.

Plan for Management During Incapacity

A revocable trust can also provide instructions for management of trust property if the person who created the trust later becomes unable to manage it.

The trust can identify a successor trustee and specify the conditions under which that person takes over.

This creates a different form of continuity than a will, which primarily addresses what happens to probate property after death.

A trust does not replace every other incapacity-planning document. Powers of attorney, health care documents, and other planning tools may still be needed to address decisions or property outside the trustee's authority.

Maintain Greater Privacy for Trust Administration

A revocable trust ordinarily does not have to be filed with the probate court merely because the settlor dies.

That can keep more of the trust's terms and administration outside the public probate file.

It does not mean a trust can never become involved in litigation or another court proceeding. Disputes, creditor issues, or other circumstances can still result in judicial involvement.

What a Revocable Living Trust Does Not Do

Understanding the limits is just as important as understanding the benefits.

It Does Not Automatically Protect Your Assets From Creditors

During the settlor's lifetime, property in a revocable trust generally remains subject to the settlor's creditor claims.

If creditor protection is an important objective, different planning strategies may need to be considered. Depending on the circumstances, that discussion may involve asset protection planning or an appropriate irrevocable trust structure.

An irrevocable trust is not automatically protected from every claim either. The legal effect depends on how the trust is structured, who created it, who can benefit from it, and applicable law.

It Is Generally Not a Medicaid Asset-Protection Trust

A revocable living trust should not be confused with planning specifically designed around Medicaid eligibility or long-term care costs.

Because the settlor generally retains access to and control over revocable trust property, placing assets in this type of trust does not ordinarily remove them from Medicaid resource analysis.

If long-term care or Medicaid eligibility is part of your planning concern, that issue should be evaluated separately before assets are transferred.

This is one reason working with a firm that handles both trusts and elder law can matter. The trust used for probate or incapacity planning may not be the same tool appropriate for long-term care planning.