A North Dakota living trust allows you to keep your assets in a trust while also continuing to use and manage them during life. The use of a revocable living trust (also called an inter vivos trust) as part of estate planning is a popular option.
Living Trusts in North Dakota
A living trust in North Dakota is established by the grantor, the person placing assets in trust. Your living trust is established to manage the assets for your benefit during your life. The more assets you can place in the trust, the more benefits you will reap. Life insurance and retirement accounts cannot be transferred to a trust. You must select a trustee who is responsible for managing the assets in the trust. Most people name themselves trustee for ultimate control. You will then need to name a successor trustee to take over after your death. That trustee will continue to maintain the assets in the trust and then distribute them to your beneficiaries as you direct in the trust. A revocable trust can be altered at any point, even deleted, but an irrevocable trust cannot be changed once it is established.
Probate is one of the major reasons why some people choose a living trust. Living trusts do not go through probate. Wills must be probated to be effective. Probate is a court procedure that can take months and involves the cost of an attorney, executor, and court fees. If you leave assets through a will, they cannot be passed until probate is concluded, while a trust allows for immediate distribution if you wish. A trust also allows you to avoid probate in multiple states; simply include the property from those states in the trust and it passes without probate.
North Dakota applies the Uniform Probate Code, a standardized law which streamlines the process to some extent in comparison with other states. In addition, if your estate contains $50,000 or less, it qualifies for a small estate procedure which is shorter and less expensive than probate. It is also less expensive than setting up a trust, but cannot provide all the benefits of a trust.
Do I Need a Living Trust in North Dakota?
Selecting a living trust is a matter of personal choice, but there are multiple benefits to keep in mind. A living trust North Dakota keeps your family business private. Wills become public record through the probate process, but a trust is kept away from prying eyes and is not revealed. Your assets, beneficiaries and trust terms are not released to anyone not involved in the process. A trust is also more challenging to contest than a will, making it more likely to remain in effect.
When you create a living trust in North Dakota, you maintain control of your assets during your life and after you pass. During your lifetime, you use assets as you normally would, living at home, driving your vehicles, and spending or giving away anything you like. The titles of the assets are in the trust’s name but nothing else is different. After you die, your assets are already in the trust and are managed and protected there according to your wishes. They are then distributed to your beneficiaries according to your instructions and can remain in the trust for years until the dates you have selected. This is in contrast to a will which distributes assets in total once probate concludes.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
Living Trusts and Estate Taxes in North Dakota
There is no estate tax in North Dakota, but federal estate taxes are imposed on estates over $5 million. Living trusts do not protect assets from this tax. You can avoid it with the use of a special trust known as a marital trust (sometimes called an AB trust or QTIP trust), which passes assets from the deceased to a surviving spouse without tax. A living trust cannot hide assets from Medicaid spend down and it does not make assets immune to creditors.
How to Create a Living Trust in North Dakota
If you are interested in creating a living trust in North Dakota, you will create a written trust agreement and sign it front of a notary public. To make the trust effective, you must then transfer assets into it. Living trusts provide a variety of benefits. Consider whether these benefits appeal to you.
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