What Is The Difference Between a Living Trust and a Last Will in North Carolina

By Joseph Scrofano

There are two types of legal instruments commonly used for individuals to set the terms of the distribution of their assets upon death. First, a “last will and testament” is a legal document where the person drafting the will appoints an executor (or personal representative) to carry out the will’s instructions in the probate process. Second, a living trust is a legal document where the asset holder may unilaterally change it at any time. Laws for living trusts and probate are governed by state law. Accordingly, North Carolina state law governs the differences between wills and living trusts for residents of that state.

There are two types of legal instruments commonly used for individuals to set the terms of the distribution of their assets upon death. First, a “last will and testament” is a legal document where the person drafting the will appoints an executor (or personal representative) to carry out the will’s instructions in the probate process. Second, a living trust is a legal document where the asset holder may unilaterally change it at any time. Laws for living trusts and probate are governed by state law. Accordingly, North Carolina state law governs the differences between wills and living trusts for residents of that state.

Definitions and Terms

Different terms and definitions apply in the context of a will and a living trust. For a will, the person who drafts the document is referred to as a “testator.” Upon death, the testator becomes the “decedent.” When drafting a will, the testator must appoint an “executor” to carry out the will’s instructions. Once the testator dies, the executor must file for “probate.” In North Carolina, Superior Courts have jurisdiction over probate matters, which are the legal proceedings in which the probate judge authenticates the decedent’s will and ensures that the executor follows North Carolina law in administering the estate. In the context of a living trust, the “settlor” transfers her assets to the trust and names herself as “trustee.” The settlor also appoints a “successor trustee” who will assume control over the trust upon the settlor’s death or other incapacitation.

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Probate

The first primary difference between living trusts and wills in North Carolina is over the probate process. With a living trust, the estate does not have to be probated. Probate can be an expensive and costly process. In addition, the successor trustee is not subject to the probate court’s supervision the way an executor is. The successor trustee simply transfers the assets in the trust according to the conditions the trust’s declaration states.

Privacy

In North Carolina, once a will goes to probate, the will becomes a public record. Living trusts do not become public record. Some people may not have a problem with their will becoming a public record. For others, privacy in the distribution of their estate is a paramount concern. This issue also applies with the estate inventory in the probate process, which also becomes public.

Small Estate

North Carolina is one of only two states that do not have a streamlined and usually more economical process for small estate probate. This means that even estates with few assets must go through the costly probate process in North Carolina. Accordingly, smaller estates may have a greater incentive to utilize a living trust to avoid costs for probate.

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Living Trust Vs Last Will in Texas

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