Estate Planning: What is a Trust? Is a Trust right for Me?
A “Trust” is a document that gives rules and terms for how certain property is to be managed and distributed. In ordered to be governed by a Trust, the property would be put in the name of the Trust (instead of an individual or business).
For a long time, it was believed that a Trust was only useful for those individuals with significant incomes or otherwise had notable wealth – “the super rich”. The truth is that a Trust can be useful for anyone who wishes to have a say in how their property is handled, even after they have passed on. Depending on other goals of your estate plan, one type of Trust may be better suited than another.
Two main types of Trusts are: irrevocable and revocable.
IRREVOCABLE TRUSTS
Irrevocable Trusts are, as the name suggests, generally irrevocable once they are made. Meaning once the Trust is created, the Creator’s ability to change or terminate the Trust is extremely limited. The Creator of this type of Trust gives up their ownership of the items placed into the Trust, and from then on, those items will remain owned by the Trust even if the Creator changes their mind in the future.
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The lack of flexibility of Irrevocable Trusts provides certain protections, and therefore may be preferred in certain circumstances.
REVOCABLE TRUSTS
Revocable Trusts provide a considerable amount of flexibility. A Revocable Trust allows the Creator to maintain ownership of “Trust property.” The Creator can be a Trustee and/or a Beneficiary of a Revocable Trust.
Revocable Trusts can be modified or even terminated by the Creator at any time prior to death. With Revocable Trusts, you can also continue using the property as you would if it were held in your personal name. When you pass away, the terms of the Trust would dictate how the property is handled or distributed moving forward. This allows the items in the Trust to “pass” outside of Probate, which is one of the common reasons a Trust is used as part of an estate plan.
Estate plans can include several different tools – what is most important is that you choose the tools that address your goals for creating an estate plan. If you or a loved one is interested in discussing an estate plan, we are ready to help you create the plan best suited to your needs.
If you or someone you know would like to learn more about Estate Planning and Trusts, our Modern Legal Team is here to help.
Please note: these educational materials are based on North Carolina and South Carolina law where my legal practice is based. While the insights may have wide applicability, readers should consult with an attorney regarding the specific laws in their state or country.
Written by: Tiffany A. Byrd
Family is at the heart of everything I do, both personally and professionally. As a Family Law Attorney, I combine my passion for helping others with my unique journey—from growing up as the eldest child in a single-parent household to becoming the first attorney in my family. My experiences shaped my dedication to advocating for families in their most critical moments. Whether you’re building, protecting, or securing your family’s future, I’m here to help you find meaningful resolutions tailored to your needs.
