What is the difference between a living trust and a testamentary trust?

A living trust and a testamentary trust are both tools used in estate planning law in North Carolina. Each trust provides a way to ensure that assets are managed and distributed as the maker of the trust desires, but there are important differences between the two. A living trust, also known as an inter-vivos trust, is created while the individual is still alive. Assets are transferred into the trust as soon as it is created and the trust will remain active until the maker’s death. The living trust allows the individual to continue to manage their assets while avoiding probate court. A testamentary trust, on the other hand, is created after an individual’s death through their will. The assets are transferred to the trust after the individual has passed away and the executor of the estate is in charge of distributing the assets as outlined in the will. This type of trust requires the help of a probate court to be established and does not take effect until after the individual has died. The main differences between a living trust and testamentary trust in North Carolina are when the trust is created and when it goes into effect. Living trusts are created while the individual is still alive whereas testamentary trusts are created after the individual’s death. Living trusts also allow the individual to manage their assets while avoiding probate court while testamentary trusts require the help of the court to be established.

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What is the difference between a living trust and a testamentary trust?

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