Trusts

Texas Trusts and North Carolina Trusts can help families in both states protect what they own, care for loved ones, and make transfers easier.

In Texas and North Carolina, trusts work alongside a will and your powers of attorney to form a complete estate plan. You keep more control over how and when assets are managed and distributed. And when the trust is properly funded, those trust assets stay out of probate, which keeps the process simpler and more private.

What Is a Trust?

A trust is a legal arrangement where someone, called a Trustee, holds and manages property for another person’s benefit. The person who sets up a trust, called a grantor, transfers the property to the trust and decides how it will be used. The trustee then follows those directions to take care of the people the grantor names as beneficiaries.

Trusts can be used to:

• Avoid probate and simplify the transfer of assets
• Manage property for minor children or family members with special needs
• Protect assets from creditors or lawsuits
• Minimize estate taxes and preserve generational wealth
• Control distributions over time

Types of Texas Trusts and North Carolina Trusts

Your estate plan can include many different types of trusts. The right one depends on what you want to protect and how you want things handled when you are alive or after you have died. Some families want to make probate easier. Others need privacy, steadier money management for kids, or protection for a loved one who depends on public benefits. Below are a few of the estate planning trust options that are available in Texas and North Carolina.

Revocable Living Trust

Revocable Living Trusts are the option most people ask about first. It is flexible. You can change the trust document, add or remove assets, or even cancel it while you are alive and able.

Most clients name themselves as trustee of their living trust so day-to-day life does not change. You still pay your bills, manage your accounts, and make decisions. You also choose a successor trustee who can step in to take care of your trust property if you get sick or after you die. When assets are transferred to the trust, your family can usually skip probate for those items, which keeps things more private.

A lot of people are under the mistaken assumption that a living trust will protect their property. It won’t. Because you retain a lot of control during your life, creditors will be able to reach the property in the trust. Its real strength is control, privacy, and continuity for the people you leave behind. That is what most families tell me they want.

For example, a couple with a home in Texas and a mountain cabin in Colorado used a living trust so their kids would not have to deal with probate courts in both states after they die. With a revocable living trust, the successor trustee can transfer both properties to the kids after the second parent dies, without the need for probate.

Irrevocable Trust

An Irrevocable Trust is not revocable. Once you set up the trust document and move assets in, it is much harder to change. In return, you may gain benefits a living trust cannot provide, such as certain creditor protection or tax advantages, depending on how it is drafted and funded.

This is not a fit for everyone. It can be a smart move if you want to move a life insurance policy out of your taxable estate, place a business interest in a safer structure, or set aside assets for children or grandchildren with clear rules. You give up some control to get those benefits. That tradeoff needs a thoughtful conversation with your estate planning attorney about your goals, timelines, and comfort level.

I often tell clients to picture an irrevocable trust like a locked cabinet with a good key holder. You decide what goes in and who holds the key. After that, you do not open and close it on a whim. But it protects what is inside in ways a regular drawer cannot.

Testamentary Trust

A Testamentary Trust is created by your Will and begins after you die. It does not avoid probate because it lives inside the Will. It can create a management structure for families with young children or beneficiaries with special needs.

You can instruct the trustee to use trust property for health, education, and basic needs, then release money in stages. Maybe a portion at twenty-one, more at twenty-five, and the rest at thirty. Spreading out distributions gives young adults time to learn how to handle money without losing support for school or emergencies. You can also keep the trust intact for the beneficiary’s lifetime, giving them some lifelong asset protection.

Special Needs Trust

A Special Needs Trust protects a loved one who receives needs-based benefits like Medicaid or Supplemental Security Income. If that person receives an inheritance outright, they can lose those benefits. Special needs trusts let you provide extra financial support without putting those benefits at risk.

The trustee can pay for items and experiences that improve quality of life, such as therapies, education, travel to see family, hobbies, and more. Because the trust, not the beneficiary, owns the assets, benefits can continue. This is one of the most caring choices a family can make when a loved one depends on government benefits.

Charitable Trusts

Establishing a charitable Trust as part of your estate plan lets you support the causes you care about while also reducing the amount of taxes you might owe the government.

With a Charitable Remainder Trust, you or a beneficiary you name can receive an income for your life or for a set number of years, and give whatever is left in the trust to charity. A Charitable Lead Trust does the reverse. It pays the charity first for a period of time, then distributes what is left to the beneficiaries you name.

These trusts are usually irrevocable, so they work best when you are comfortable committing assets to a long-term plan. They are especially useful for appreciated stock or real estate, since the trust can sell and diversify while following the payout terms you set.

Medicaid Asset Protection Trusts

If your main worry is long-term care costs, a Medicaid Asset Protection Trust can help preserve assets for a spouse or children. It is irrevocable. After funding it, you cannot use the principal for yourself, though you can often keep the right to live in your home and receive income the trust earns, subject to program rules. Timing is important because transfers are subject to a five-year lookback in both Texas and North Carolina. When planned early and drafted correctly, a MAPT can transfer assets to beneficiaries outside of probate and may limit estate recovery, depending on the assets and the terms. It is a good fit for someone who can give up direct access now in order to protect family resources later.

Do You Need a Trust in Texas or North Carolina?

Not everyone needs a trust as part of their estate plan. Some families can meet their goals with a Will alone. A trust may be right for you if you want:

• Privacy and fewer court filings
• A smoother plan if you own real estate in more than one state
• Management for minor or incapacitated beneficiaries
• A backup plan that avoids guardianship or conservatorship
• Structure to protect loved ones from misusing an inheritance

A trust is also helpful for blended families. It can provide for your spouse while still protecting an inheritance for your children from a prior relationship. When I meet with clients, we look at family, assets, risks, and goals. If a trust adds real value, I will say so. If a simpler path fits, I will recommend that instead.

The Importance of Funding Your Trust in Texas and North Carolina

A trust works only if it is funded. “Funding” simply means transferring ownership of your assets into the trust’s name. That might involve deeding real estate, changing account ownership, or updating beneficiary forms.

I often meet families who created a trust years ago but never funded it. When the grantor dies, those unfunded assets still go through probate. Taking time to transfer your property to your trust and to review it after major life events makes sure the plan works the way you expect.

Your plan should also include a “pour-over Will.” This Will moves any assets left outside the trust into the trust at death. It does not replace funding, but it catches any property you forgot to put in the trust and pours it into your trust after you die.

Coordinate Beneficiary Designations

Certain assets are not controlled by a will or trust. Retirement accounts and life insurance pass by the beneficiary designation on file. Those designations should be reviewed and coordinated with your trust so the plan works as a whole. In some cases, naming the trust as beneficiary makes sense. In others, naming individuals is better. The choice depends on taxes, protections, and your objectives.

Choosing What Fits You

Some families use one trust. Others combine a living trust for privacy with a testamentary trust for minors, or add an irrevocable trust for asset protection. The best plan matches your people, your property, and your values.

When we talk through your options, I will ask simple questions. What keeps you up at night? Who needs help managing money? What do you want to keep private? Do you own property in more than one state? Your answers point us to the right tool, not the other way around.

Guidance on Texas and North Carolina Trusts

A Texas and North Carolina estate planning lawyer can help clients choose, draft, and fund a Texas Trust and North Carolina Trust that fit real life. We will review which assets belong in the trust, how to choose successor trustees, and how distributions should work day to day.

If you would like to explore whether a trust belongs in your estate plan, schedule an appointment. You can also browse the resources below to learn more about trust creation, funding, and administration in Texas and North Carolina.