What is a living trust?

A living trust is a legal agreement in which a person (the trustmaker) gives authority to another person (the trustee) to manage their assets or property for the benefit of a third party (the beneficiary). Living trusts are established while the trustmaker is still alive and can be used as an alternative to other estate planning options such as wills. In North Carolina, a living trust is created when the trustmaker signs a trust document that outlines the terms of the trust. The trust document will contain information such as who the trustees and beneficiaries will be, as well as what assets are to be included in the trust. The trustmaker will also provide instructions for how the trustee is to manage and distribute the trust assets. Once a living trust is established, it becomes a separate legal entity that owns the trust property. This means that the trust assets can be managed and distributed without the need to go through the probate process when the trustmaker dies. Living trusts can provide many benefits to the trustmaker, such as protecting their assets from creditors, avoiding the costs and paperwork of probate, and having more control over how their assets are managed after their death. Because living trusts are a more complex estate planning instrument, it is important for North Carolinians to seek legal advice from an experienced trusts and estates lawyer before establishing a living trust.

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