North Carolina Wills vs. Trusts
North Carolina offers residents notable advantages for estate planning through its favorable legal framework. The Tar Heel State repealed its estate tax in 2015 and provides streamlined probate for estates with personal property under $20,000 (or $30,000 for surviving spouses). With recognition of both holographic and limited oral wills, substantial spousal protections including a guaranteed elective share of 15-50% and a $60,000 spousal support allowance, plus robust spendthrift trust provisions, North Carolina residents have multiple tools to efficiently transfer assets while protecting their family’s financial future.
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North Carolina Will Requirements
A North Carolina Last Will and Testament should include:
- Age and Capacity: Testator must be “of sound mind” and at least 18 years old
- Format: Must be in writing (except for nuncupative wills, which have special requirements)
- Signature: Must be signed by the testator or by someone else signing for the testator in the testator’s presence at the testator’s request
- Witnesses: Must be attested by two competent witnesses, each of whom must sign the will in the testator’s presence
Witness Requirements
For North Carolina wills:
- The witnesses must observe the testator signing the document or hear the testator acknowledge that the signature is genuine
- To be eligible to witness a will, an individual need only be competent to act as a witness in North Carolina generally
Neither an executor of a will nor a beneficiary is prohibited from acting as a witness to the will. However, devises to an interested witness (or to an interested witness’s spouse) are deemed void if the will does not have at least two other disinterested witnesses.
Document Incorporation
North Carolina law permits wills to incorporate by reference other documents if the document is in existence when the will is executed and sufficiently described to allow identification.
Self-Proved Wills
Although North Carolina wills need not be notarized, a will can be made “self-proved” if the testator and the will’s witnesses execute a notarized affidavit to accompany the will. When a will is self-proved, it can be admitted to probate based upon the affidavit and without testimony from the witnesses.
A self-proved affidavit may be executed at the same time as the will itself or at a future time, as long as the testator and witnesses remain living. Within the self-proved affidavit, the testator attests that the document was signed willingly as a will under the testator’s own volition. Witnesses attest that the testator signed the will of his or her own volition and was at least 18 years old, of sound mind, and not under duress when signing. The North Carolina legislature publishes a recommended form for the affidavit at N.C.G.S. §31-11.6.
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Amendment, Revision, and Revocation of North Carolina Wills
Revoking a North Carolina Will
A North Carolina will may be revoked through:
- A later will or codicil (an addendum to an existing will) or similar writing that complies with all formalities required for valid wills
- Physical destruction of the document, such as by burning or tearing, with the intention of revoking the will
Effect of Marriage
A North Carolina will is not deemed to have been revoked if the testator is married after executing the document. A surviving spouse omitted from a will does, though, have the right to petition for an elective share of a decedent spouse’s estate.
Effect of Divorce
If a testator is divorced after executing a will, any provisions in favor of the former spouse are deemed to have been revoked unless the will expressly provides otherwise. Provisions deemed revoked due to divorce are revived if the testator later remarries the same spouse.
Children Born After Will Execution
If a testator has a child after execution of a will—and if the testator’s will does not contemplate the birth or otherwise provide for the child—the child inherits the same share of the estate the child would have inherited had the testator died intestate.
However, the assumed share of an after-born child is not effective if:
- A surviving spouse receives the entire estate under the will, or
- The testator had other children alive when the will was executed who do not take under the will
Holographic and Oral Wills
Holographic Wills
An unwitnessed will can be nonetheless valid as a holographic will if all pertinent provisions in the will are written in the testator’s handwriting. A holographic will does not require witnesses, but must be:
- Signed by the testator, and
- Found after the testator’s death among the testator’s effects, or
- In a safe place where it was deposited by the testator, or
- In the possession of a person with whom the testator left it for safe-keeping
Oral (Nuncupative) Wills
North Carolina law recognizes oral (or “nuncupative”) wills under limited circumstances. For an oral will to be valid:
- The testator must make the statements while in his or her last sickness or while in imminent danger of death from which the testator does not survive
- The statements constituting an oral will must be heard simultaneously by two witnesses
- The testator must declare that the oral statements are intended as the testator’s last will
North Carolina Trust Requirements
Legal Framework
Trusts in North Carolina are governed by North Carolina’s version of the Uniform Trust Code, enacted by the legislature at N.C.G.S. §36C-1-101, et. seq. North Carolina trusts can be created for any lawful purpose that:
- Does not violate North Carolina’s public policy
- Is possible to achieve
The purpose and terms of a North Carolina trust must ultimately be designed to benefit the trust’s beneficiaries.
Trust Creation Methods
A North Carolina trust can be created through:
- Transfer of property by a grantor to a trustee
- A grantor’s declaration that property is owned as trustee
- Exercising a power of appointment in favor of a trustee
- Through a court order establishing the trust
Capacity Requirements
A valid trust is only created under North Carolina law if:
- The settlor has adequate capacity to create the trust
- The settlor expresses an intent to create a trust
For revocable trusts, the standard for capacity is the same as for wills. A trust found to have been induced by fraud, duress, or undue influence is voidable under North Carolina law.
Trustee and Beneficiary Requirements
For a valid North Carolina trust:
- A trust’s trustee must have actual duties to perform
- A sole trustee cannot also be a trust’s sole beneficiary
- A North Carolina trust must have a reasonably ascertainable beneficiary (subject to exceptions such as for charitable trusts and trusts for the care of animals)
Trustee Duties
Trustees who manage assets are governed by the “prudent investor rule,” though the rule may be modified under the terms of the trust.
Written vs. Oral Trusts
Though most trusts are evidenced by a written instrument setting forth the trust’s terms, North Carolina law recognizes oral trusts. However, the creation and terms of an oral trust must be established by clear and convincing evidence.
Trust Termination
North Carolina trusts terminate upon:
- Revocation or expiration under the trust’s own terms
- When there is no purpose of the trust remaining to be achieved
- When the trust’s purpose becomes unlawful or impossible
Upon termination, a trust’s assets are distributed as agreed by beneficiaries, ordered by a court, or otherwise consistently with the trust’s purposes.
Effect of Divorce
If a North Carolina grantor divorces after creating a revocable trust, any provisions in favor of the former spouse are deemed to have been revoked, and the trust is treated as if the former spouse had died prior to the grantor.
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Special Considerations
Estate Tax
No State Estate or Inheritance Tax
Effective in 2015, the North Carolina legislature repealed North Carolina’s estate tax. Large North Carolina estates may still be liable for federal estate taxes. North Carolina does not impose an inheritance tax.
Simplified Probate
Small Estate Procedures
North Carolina provides a streamlined probate process for certain small estates. Qualifying estates must have less than $20,000 in personal property. If the surviving spouse stands to inherit the entire estate, the limit is increased to $30,000.
When simplified probate applies, an heir who will inherit personal property from the estate can receive it by completing a compliant affidavit, rather than proceeding through full probate.
A similar summary administration process is available when a surviving spouse is an estate’s only beneficiary and agrees to assume all claims against the estate that are not discharged by the decedent spouse’s death.
Non-Probate Transfers
Spendthrift Trusts
North Carolina law expressly recognizes spendthrift trusts protecting trust assets from claims of most creditors of trust beneficiaries. If a trust includes a spendthrift provision, a beneficiary’s creditor cannot attach trust property until it is actually distributed to the beneficiary. However, interests in spendthrift trusts can be attached to satisfy some domestic support obligations.
If a spendthrift trust is revocable, the grantor’s creditors can attach trust assets during the grantor’s lifetime, and trust assets can be reached to satisfy estate claims. If irrevocable, creditors of the settlor can only reach the amount of assets that can be distributed for the settlor’s benefit.
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Our estate planning specialists can help you navigate North Carolina’s unique laws and create a personalized strategy.
Wills vs. Trusts: Comparison
| Feature | Wills | Trusts |
|---|---|---|
| When It Takes Effect | After death | Can be immediate (living trust) or after death (testamentary trust) |
| Probate Process | Requires probate | Assets in trust avoid probate |
| Privacy | Public record | Generally private |
| Challenges | Can be challenged in probate court | More difficult to challenge |
| Cost to Create | Generally less expensive | Usually more expensive |
| Ongoing Administration | None until death | May require ongoing management |
| Protection During Incapacity | None (requires separate power of attorney) | Can provide management if grantor becomes incapacitated |
| North Carolina Special Feature | Holographic wills; limited oral wills; $60,000 spousal allowance | Spendthrift provisions; oral trusts; streamlined small estate probate |
Conclusion
Creating a will or trust does not have to be difficult or intimidating for North Carolina residents. However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests—can add complexity and result in unforeseen consequences.
North Carolina offers unique estate planning tools that provide both flexibility and protection. The state’s recognition of both holographic wills and (in limited situations) oral wills provides options for unusual circumstances. The self-proving affidavit mechanism also streamlines the probate process for properly executed wills.
With no state estate or inheritance taxes since 2015, North Carolina provides a favorable environment for estate planning. The state’s simplified probate for estates with personal property under $20,000 (or $30,000 for surviving spouses) can significantly reduce administrative complexity.
North Carolina’s substantial spousal protections are also noteworthy. The sliding scale elective share (15-50% based on marriage duration) coupled with the $60,000 spousal support allowance provides significant safeguards against disinheritance.
When any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with and licensed under North Carolina law to ensure your estate plan takes full advantage of the state’s provisions while avoiding potential pitfalls.
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- ✓ Avoid costly probate and family disputes
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- ✓ Protect assets during incapacity
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FAQs: North Carolina Wills and Trusts
Q: What are the requirements for a valid will in North Carolina?
A: A North Carolina will must be in writing, signed by the testator (18+ and of sound mind) or by someone at their direction in their presence, and attested by two competent witnesses who sign in the testator’s presence. A notarized affidavit can make it self-proved.
Q: Does North Carolina recognize holographic or oral wills?
A: Yes, holographic wills are valid if handwritten and signed by the testator, found among their effects or in a safe place. Oral (nuncupative) wills are recognized if made during the last illness or imminent danger, heard by two witnesses, and declared as a will.
Q: How can I avoid probate in North Carolina?
A: Avoid probate with living trusts, joint ownership with right of survivorship, tenancy by the entireties (for spouses’ real estate), or payable-on-death (POD) accounts for bank accounts and securities. Small estates under $20,000 ($30,000 for spouses) can use an affidavit.
Q: What protections do surviving spouses have in North Carolina?
A: North Carolina provides an elective share of 15-50% of the estate (based on marriage length) and a $60,000 spousal support allowance, exempt from estate claims, ensuring protection against disinheritance.
Q: Does North Carolina have an estate tax?
A: No, North Carolina repealed its estate tax in 2015 and has no inheritance tax. Large estates may still face federal estate taxes.
Q: What are spendthrift trusts in North Carolina?
A: Spendthrift trusts in North Carolina protect trust assets from most creditors until distributed to beneficiaries, though domestic support obligations can still attach. They offer strong asset protection for heirs.
