One of the most versatile and practical tools in estate planning is a trust. While many people believe trusts are only for the wealthy, they offer benefits for individuals and families in many different situations. At Sheffron Law Firm, we help our clients create comprehensive estate plans that protect their assets and honor their wishes. Call us today or contact us online for a confidential consultation to learn more about how trusts can serve your estate plan.
What Is a Trust?
A trust is a legal arrangement where one person (the trustee) holds and manages assets for the benefit of another person (the beneficiary). The person who creates the trust (the settlor or grantor) establishes the rules for how the assets should be managed and distributed. Trusts serve many purposes in estate planning, from avoiding probate to protecting assets for future generations.
Common Types of Trusts
Understanding the different types of trusts and their uses can help you make informed decisions about your estate plan.
Revocable Living Trusts
A revocable living trust remains under your control during your lifetime. You can alter, amend, or even cancel it as your circumstances change. These trusts offer several advantages:
- Probate Avoidance – Assets held in the trust pass directly to beneficiaries without court involvement.
- Privacy – Unlike wills, trusts aren’t public records.
- Incapacity Planning – Your successor trustee can step in if you become unable to manage your affairs.
- Flexibility – You maintain control of your assets while you’re alive.
Irrevocable Trusts
Once established, these trusts generally cannot be changed or revoked. While this reduces flexibility, irrevocable trusts offer significant benefits:
- Asset Protection – Assets may be sheltered from creditors and lawsuits.
- Tax Advantages – Irrevocable trusts can reduce estate taxes for larger estates.
- Medicaid Planning – These trusts may assist in qualification for long-term care benefits while preserving assets.
- Special Needs Planning – This type of trust can be a means of providing for loved ones without disrupting government benefits.
Special Needs Trusts
These trusts provide for individuals with disabilities without jeopardizing their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI).
Special needs trusts supplement rather than replace government benefits. They can pay for quality-of-life expenses not covered by public assistance, protecting access to continued care when parents or guardians can no longer provide it.
Charitable Trusts
Charitable trusts allow you to support causes you care about while potentially receiving tax benefits. The two main types are:
- Charitable Remainder Trusts – Provide income to you or your beneficiaries for a period, with the remainder going to charity
- Charitable Lead Trusts – Provide income to charity for a period, with the remainder going to your beneficiaries
Trusts for Minors
These trusts protect assets for children until they reach an age when you believe they’ll be responsible enough to manage their inheritance. You can specify the age at which children receive control of assets. Trustees can use funds for education, healthcare, and other needs in the meantime.
Choosing the Right Trust for Your Situation
Different life circumstances call for different trust solutions. Here’s when to consider specific trust types:
Consider a revocable living trust if:
- You want to avoid probate for your heirs
- You own property in multiple states
- You value privacy in your estate matters
- You want a comprehensive incapacity plan
- You prefer to maintain control of your assets during your lifetime
Consider an irrevocable trust if:
- You have a larger estate that may face estate taxes
- You work in a profession with high liability risks
- You want to qualify for Medicaid while preserving assets
- You want to provide for someone with special needs
- You wish to make significant charitable contributions
Consider a trust for minors if:
- You have young children or grandchildren
- You want to make sure funds are used for education or other specific purposes
- You worry about heirs receiving large inheritances at young ages
- You want to provide structured financial support over time
How an Attorney Can Help Create Effective Trusts
Creating a trust isn’t a do-it-yourself project. Working with an experienced estate planning attorney offers numerous advantages:
- Legal Knowledge – Trust law varies by state and changes frequently. Our attorneys stay current on North Carolina trust law to ensure your documents meet all legal requirements.
- Targeted Planning – We will analyze your unique family situation, assets, and goals to recommend the most effective trust structure.
- Proper Funding – A trust only protects assets that have been properly transferred into it. We will guide you through the process of funding your trust, including retitling assets and updating beneficiary designations.
- Coordination with Your Overall Estate Plan – Trusts work best as part of a comprehensive estate plan. We will help your trust work seamlessly with your will, powers of attorney, and other estate documents.
- Ongoing Support – As your life changes, your trust may need updates. We provide ongoing support so your trust continues to reflect your wishes and meet your needs.
Bilingual Trust Services
At Sheffron Law Firm, we believe everyone deserves access to high-quality estate planning services. Our office staff is bilingual, offering trust creation and administration services in both English and Spanish. We take the time to explain complex trust concepts in clear, understandable terms.
Why Choose Sheffron Law Firm for Your Trust
Creating a trust represents an important decision about your legacy and your family’s future. The attorneys at Sheffron Law Firm have many years of experience helping Columbus and Hendersonville residents establish trusts that protect their assets and provide for their loved ones.
We take a personalized approach to trust creation, listening carefully to your concerns and goals. Whether you need a simple revocable trust or a complex special needs trust, we tailor our solutions to your unique situation.
If you are ready to explore how a trust can benefit your estate plan, contact our offices in Columbus or Hendersonville today for a consultation. We’ll help you create a trust that provides security and peace of mind for you and your family.