How to Make a Trust

in North Carolina

How to Incorporate

in North Carolina

How to Make a Will

in North Carolina

How to Create an LLC

in North Carolina

3737 Glenwood Ave., Ste. 100

Raleigh, North Carolina

Telephone (919) 872-6845

How to Make a Will

Using the previous example, if your Will leaves your estate to your children in trust if your spouse is deceased, the non-probate assets will not pass to the trust unless the trust or your estate is designated as the contingent beneficiary. If your children are named as the contingent beneficiaries, the assets will pass directly to them (or their guardian) and by-pass the trust which you established in your Will.

As previously stated, you should generally designate the trust itself as the beneficiary rather than your estate. However, the specific terms of your estate plan will determine whether it is better to designate the trust or your estate as beneficiary. This is especially true when designating beneficiaries of your IRAs and other qualified retirement plans. Keep in mind that the specific beneficiary designation on these retirement assets will determine the rate at which funds must be distributed from them when you die and will therefore determine how they will be taxed. Pay close attention to such beneficiary designations to ensure that you minimize the income tax on such distributions.

Accordingly, it is a good idea to consult with an attorney or other tax advisor regarding the proper beneficiary designation for your IRAs and other qualified retirement plans. The Stroud Law Firm can assist you with these designations if you have questions or desire professional assistance.

Since these assets will pass to the designated beneficiaries, you must coordinate the distribution of these assets with the provisions of your Will.

For example, if your Will leaves your entire estate to your spouse if (s)he survives you, and to your children if your spouse is deceased, you can designate the same beneficiaries on these non-probate assets to ensure they are distributed in the same manner as your Will. In this example, your spouse would be designated as the “primary” beneficiary and your children would be designated as the “contingent” beneficiaries.

Beneficiary designations are especially important if you have established a trust under your Will. In order to fund the trust with your non-probate assets, you must either designate the trust itself as a beneficiary of such assets or designate your “estate” as the beneficiary so that your Will can allocate such funds to the trust.

As a general rule, it is preferable to designate the trust itself as the beneficiary in order to minimize the probate of such assets when you die.

After your Will has been executed, it is important to review and update the beneficiary designations on your life insurance, IRAs, retirement plans and annuities.

The Stroud Law Firm

3737 Glenwood Avenue

Suite 100

Raleigh, NC 27612

Phone Numbers

Office: (919) 872-6845

Mobile: (919) 830-3602

Fax: (888) 241-4857

E-Mail Address

kevin@thestroudlawfirm.com

Step 6: Review and Update Beneficiary Designations