CPAs in Raleigh NC

Trusts may seem like some vague financial dealing reserved for the extremely wealthy, but that’s actually not the case. Trusts can be a financially advantageous part of your estate planning to ensure your assets and property are divided how you see fit. To help provide clarity on this complex financial matter, our CPAs are sharing 4 advantages to creating a trust fund.

What Is a Trust?

First, let’s answer the big question: “What is a trust?” Basically, it’s a legal entity that safely holds assets on behalf of someone else. The person who creates the trust, the grantor, chooses what goes into it and the rules and guidelines associated with it. The person who receives the money, property, or assets is the beneficiary of the trust. Until it is time for the beneficiary to receive distributions from the trust, it is managed and watched over by a trustee, a person or institution who you name to ultimately distribute trust funds and ensure stipulations are followed.

What Goes in a Trust Fund?

Anything of value can be placed in a trust fund:

  • Property, including land, rental property, and vacation homes
  • Checking and Savings account
  • Stocks and investments
  • Artwork
  • Businesses

Stipulations and Clauses in Trust Funds

There are a wide variety of perfectly legal stipulations and clauses you can include to ensure the money and assets are used as you see fit:

  • Age limits for a beneficiary. Rather than 18, you can grant access at a later date.
  • Paying out at intervals. Rather than one lump sum, you can set it up to where the beneficiary receives a portion at 18, again at 25, 35, and so forth.
  • Name specific people as a beneficiary or a specific group. Instead of your assets going to your children, you can skip a generation or generations.
  • Stipulate specific uses for the assets, such as money to pay for an education or buy a house.

An Example of a Trust

For example, if you are the grantor, you can place a family property in the trust and name a beneficiary to live there. You can also stipulate that a beneficiary can live there but is not allowed to rent it or sell it, other wise the home reverts to another beneficiary. The trustee will manage the property between the time the house is moved into the trust and when the beneficiary takes possession, and from there the trustee will ensure the home is lived in by the beneficiary and all other stipulations are followed.

Advantages of a Trust

So, now with a better understanding of how a trust works, let’s look at the advantages.

Avoid Probate

Probate occurs when a judge determines whether a will is valid. This is a lengthy process and probate fees can be expensive. Having your estate held in a trust allows your beneficiaries to get the maximum amount they are owed, without waiting for court action.

Reduce Estate Taxes

After your passing, the property that is transferred to your family may be subject to an estate tax. Assets and property in a trust can minimize these estate taxes, reducing the overall burden. It’s important to note that only those with estates worth over $11.58 million in 2020 ($11.7 million in 2021) are required to pay estate taxes.

Flexibility in Distribution

As we mentioned before, a trust can offer you a great deal of flexibility in both who is a beneficiary and how they receive it. If you’re concerned how a beneficiary may spend the money, you can put a trustee in charge of how it’s dispersed and even how it’s spent. If you’re concerned with a business, you can stipulate that profits go to your heirs, while the day-to-day operations are managed by a third party.


Assets subject to probate are a public record. Therefore, anyone can see what assets are held in your estate. Trusts assets, on the other hand, are not a public record. If you are concerned about maintaining the privacy of the nature of your assets, a trust can help you achieve this goal.

Prevent Dissent and Drama

When an heir is unhappy with a Will, they can contest it or challenge the Will’s legitimacy, tying up the assets in court for an extended period of time. Setting up a trust offers more protection against legal action, making it a sound choice if you have concerns about family members.

Schedule a Consultation for Advice on Setting Up a Trust

If you would like to learn more about creating or managing a trust, reach out to our team of CPAs today. We can work with your legal council so your trust is beneficial for you and your beneficiaries. Schedule a consultation today by calling (919) 872-0866 or filling out the form below. We serve Raleigh, Durham, Wilson, Wake Forest, and surrounding areas.

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