Trusts have many benefits for you, your family, and future generations. We have listed some of the most common questions or topics that we have received with our current thoughts and recommendations. The answers are solely for your informational purposes and are not guaranteed to be accurate, complete, or timely for your individual circumstances. If you have further questions, please reach out to us at firstname.lastname@example.org or 336-646-6678.
Simply stated, it is a legally enforceable contractual arrangement that transfers property from one person (the Grantor) to another person or corporate body (the Trustee) to be held by the trust and managed by the trustee for the benefit of a class of persons (the Beneficiaries). Trusts are established in a written document, that sets out the terms and conditions upon which the trust assets are held and managed and outlines the rights of beneficiaries under the terms of the Trust.
Trusts come in many different types from very simple to complex, but they all have one big advantage: they avoid estate probate by the courts. They are as varied as the people who establish them. However, all trusts have five common elements: (1) each has a grantor who transfers legal title to assets into the trust; (2) each has a beneficiary or beneficiaries who receives the benefits or advantages in the trust arrangement; (3) each has a trustee or trustees who manage the affairs of the trust; and, (4) each has a legal component called “intent” that expresses the grantor’s intentions in establishing the trust and the instructions to the trustee as to the management of the assets.
Another way of looking at trusts is whether they are revocable or irrevocable. Revocable trusts can be changed or terminated at any time by the grantor. Irrevocable trusts can only be changed or terminated in limited circumstances. These two major categories have major tax and legal implications that are beyond the scope of this question to answer. Talk to an Old North State Trust officer who will guide you to a licensed tax or legal professional with significant tax, estate, and trust experiences such as a CPA or an attorney if you desire more information and guidance on this subject.
No. While the perception is that a Trust is only for the ultra-wealthy, a Trust can have beneficial applications for individuals who have more modest financial circumstances. A properly drawn Trust can expedite the transfer of assets to a decedent’s heirs, defer or avoid federal and state death taxes as well as avoid state probate fees. When utilizing a corporate Trustee such as Old North State Trust, a decedent’s spouse, and heirs are relieved of the hardship and burdens of marshaling and safekeeping of assets, accounting for all Trust receipts and disbursements, managing special assets (i.e., income-producing real estate, farmlands, undeveloped real property, Sub-Chapter S Corporations, LLC’s, etc.), preparation of fiduciary income tax returns, bill paying and a myriad of other issues. In addition to being relieved of these time-consuming but important duties, a corporate Trustee will also provide professional, top-notch investment management services.
Your Last Will & Testament is the foundation of your financial endgame. Everyone should have one! Your Will names your executor, tells how to distribute your assets, provides for custody of minor children, and provides a vehicle for special instructions concerning unique assets you may own at death. However, a Will may not be able to take care of all your estate planning desires in the most efficient way. Where an estate is a relatively short-lived legal process, a trust can become a long-term financial tool to ensure the desire to take care of your loved ones is achieved. Among the reasons that people create trusts are:
- Professional Asset Management: These days, your investable assets need more expertise, time, and supervision than ever before. An experienced, professional trustee brings specialized training to that task.
- Family Financial Protection: A trust provides a means and structure for delivering your financial resources to multiple beneficiaries or entities over a span of time. For example, annual income distributions to your spouse for living needs and principal distributions to your children in the future.
- Potential Tax Savings: Some trust plans can lead to substantial tax savings depending on existing tax laws.
- Probate Avoidance: Living trusts may avoid court reporting requirements or probate, and thus, provide the family with an element of financial privacy at death.
A living will or declaration of a desire for a natural death is a legal instrument that expresses a person’s desire that extraordinary measures are not to be used to prolong life if his or her medical condition is diagnosed to be terminal and incurable. The living will is intended to avoid the possibility that family disagreements may delay the administration or withholding of extraordinary medical procedures during the end stage of a person’s life. A healthcare power of attorney gives someone you trust the legal authority to act on your behalf regarding healthcare decisions if you become incapacitated or unable to communicate. Both of these documents are necessary in your overall endgame planning, but neither of these documents is intended to take the place of or deal with your financial estate plan. You will need a Last Will and Testament and possibly a living, testamentary, and/or life insurance trust to achieve your estate financial goals and protect your family. A trust can also provide for the individual administration of your assets during your lifetime when you are unable or unwilling to do so yourself.
No, our fees for trust services are very competitive with those of investment advisors, banks, and other trust companies. As trustees, we provide asset management, trust administration, and recordkeeping, along with tax and real estate expertise for an all-inclusive management fee. Our fee is based on the market value of assets in the trust and computed on a declining rate scale. To learn the specifics, please ask for a copy of our fee schedule.
The preparation of the trust legal document must be prepared by your attorney. Our experience has been that the legal costs of document preparation are most always reasonable and certainly worthwhile for our client’s piece of mind knowing their financial matters are in good order. Often the expense incurred in retaining an estate planning attorney to prepare your trust documents will save you and your beneficiaries significant time and costs by having the trust documents prepared properly. If you do not have an attorney, we will be happy to supply you with a list of estate planning attorneys for your consideration.
Certainly, you can if they will accept the appointment. The question is: “For your peace of mind should you”? Corporate trustees such as Old North State Trust, LLC are licensed and regulated by the Banking Commission of the State of North Carolina and have to comply with financial and operating standards set by the Commission. Some reasons to consider a corporate trustee such as Old North State Trust are: (1) we are trust professionals and thus held to a higher standard of performance than a non-professional; (2) we know a lot about trust matters because we are exclusively a trust and investment management firm; we aren’t distracted with making loans or increasing deposits; (3) we have 160 years of North Carolina trust experience on our staff and manage your wealth affairs on a day to day basis—every day; (4) we provide reliable, objective and seasoned professional advice to our clients and potential clients and are not distracted or swayed by emotional or personal concerns; (5) we have full-time investment and financial analysis staff that are skilled in balancing your short and long term financial goals, your risk tolerance and the state of the economy and often achieve better results because of these factors; and (6) we are truly committed to our mission of helping families create and enrich their legacy for generations to come.
Independent trust companies and bank trust departments are regulated by various government institutions. Oversight for state-chartered trust companies and departments such as Old North State Trust is provided by the Office of the Commissioner of Banks. Other regulators include the Office of the Comptroller of the Currency and the FDIC.
Some trust officers hold their positions as a matter of significant, usually 10 years or better, experience in wealth management. Not all trust officers are professionally credentialed or licensed. The most common credentials held by trust officers who hold national certifications or who are licensed are Certified Financial Planner (CFP®-Certified Financial Planner Board), Certified Trust and Financial Advisors (CTFA- Institute of Certified Bankers), and Certified Public Accountants (CPA) and Attorneys at Law. These trust officers normally have at least a bachelor’s degree with required significant experience levels in wealth management, a graduate education in trust—including passing graduate level trust schools held by nationally recognized trust educators; or a state licensed CPA or Attorney at Law.
Old North State Trust strives to permit a wide variety and types of investments for every investor.
Some of the more common include:
Residential Real Estate
Commercial Real Estate
Yes. You can choose to transfer/rollover all, or portions of your existing retirement accounts to an Old North State Trust self-directed IRA for real estate investments. (Most employer-sponsored plans such as a 401(k) do not permit a rollover into another type of account while you are still employed. However, in some cases, plans do permit a rollover portion of the account balance. See the plan administrator for information on what if any rollover is permitted.)
The two most common types of IRAs are Traditional and Roth. (There are other kinds, like SEP and SIMPLE IRAs, but those are geared toward people who are self-employed or running small businesses).
The biggest difference between a Traditional vs. Roth IRA is when your money is taxed. With a Traditional IRA, you get a tax deduction when you contribute money- so the money going into your account is tax-free, and when you withdraw it in retirement, it will be taxed.
With a Roth IRA, you don’t get a tax deduction when you contribute, but your money grows tax-free- meaning that when you withdraw it in retirement, you won’t pay taxes on the withdrawals.