An effective estate plan can provide for the future of your heirs while also avoiding taxation and potential probate complications. One way to accomplish these goals is to create a Trust that protects your heirs from having to pay taxes on the assets. A Trust can also keep those assets out of the probate process or function as a way to transfer property to minors who might not otherwise be able to inherit under a Will. Creating a Trust to protect your heirs in Wake Forest can be a sound estate planning strategy. A knowledgeable attorney could explain the concept of Trusts and how they function in more detail.
The law says that people under the age of 18 cannot directly inherit property. This means that naming a minor as a beneficiary in a Will could create problems if a testator passes away before that person reaches adulthood. Instead, it may be a better idea to create a Trust that distributes property at the time of a testator’s death. That property will remain in the Trust until the testator passes away, at which point it may flow to beneficiaries. If they have not yet reached adulthood, a provision could allow the property to remain in the Trust until the beneficiary’s 18th birthday. Moving property in this way can also have substantial tax benefits. Although Wake Forest is in a state that does not have an estate tax, the federal government may still claim a portion of an estate with substantial assets. Placing these assets into a Trust ensures that heirs will receive the maximum benefit of that property without having to pay taxes first.
After a person dies, a court will open a probate case to deal with their estate. While it is perfectly legal to transfer property to heirs through a Will, the probate process may make this transfer expensive and lengthy. Transferring property to heirs through a Trust helps to simplify probate. By definition, assets that enter a Trust are no longer the property of the Trust maker and therefore not a part of their estate. As a result, this property is not subject to the court’s probate process or intestacy laws. Additionally, creating a Trust to protect heirs can be relatively simple. According to North Carolina General Statutes § 36C-4-401, a valid Trust must merely:
An experienced local attorney could provide more information about creating a Trust that protects one’s heirs and has legal effect.
Proper estate planning involves understanding the effects that your choices will have on your heirs. While it is possible to transfer property through a traditional Will, it may be more beneficial to use a Trust to accomplish your wishes. A Trust can keep property safe from taxation. It can also help avoid the stresses and complications of probate. If you wish to create a Trust to protect your heirs in Wake Forest, contact a skilled lawyer at our firm to learn more.