Trusts Part 1

Right now, if you own land, I can almost guarantee it is registered with the state.  This relationship to the state is one of Trustee to beneficiary– the state (Trustee) holds the ability to make legal decisions regarding the property while you (beneficiary) are allowed to live on the land/in the house. If you want to pass the property down to your heirs, it will have to go through probate court; the court will decide, while considering your will and testament, exactly how the rights estate will be distributed.


One can appoint anyone they know to be trustee.  The prerequisites are purely up to the grantor’s/trustor’s/settlor’s discretion. In this context, those titles all mean the same thing.

By making a natural person the trustee, you bring the ownership of the land/house into the private realm.  The property is no longer connected to the County when it comes to power of disposition and jurisdiction.

Trusts, until recently, were a very foreign subject to me.  If you had asked me six months ago what a trust was, and whether it was interesting to me, I would have probably said that a trust was only for rich people who want to someone to watch over their money after they die so that their children do not spend all the capital/sell the property.

That scheme represents a specific type of trust. Trusts can be used in many ways though, and that determines which type should be chosen. The words alone play a huge role in the nature of the trust.  Over and over again, we see in legislation that the wording of the trust creates the law that is to be followed in dealings with the trust.

Chapter 36C of the NC General Statutes is called “The Uniform Trust Code”. You can be sure that most if not all states have adopted this (hence the name uniform).  Within the text, we see that some trusts are non-judicial, meaning they are not up for a court to decide. The trustee, as directed by the beneficiaries, makes any and all legal decisions. His/her/its name shows up on paperwork, and the names of beneficiaries do not need to be known to that corporate structure called the County.

What makes some Trusts private/common law trusts, and some trusts judicial (left to the court)? 

“§ 36C-1-107.  Governing law.

(a)        The meaning and effect of the terms of a trust are determined by any of the following:

(1)        The law of the jurisdiction designated in the terms unless the designation of that jurisdiction’s law is contrary to a strong public policy of the jurisdiction having the most significant relationship to the matter at issue.

(2)        In the absence of a controlling designation in the terms of the trust, the law of the jurisdiction having the most significant relationship to the matter at issue.

(b)        Notwithstanding subsection (a) of this section, the rights of a person other than a trustee or beneficiary are governed by G.S. 36C-10-1010 through G.S. 36C-10-1013. (2005-192, s. 2; 2007-106, s. 4.)”


“§ 36C-1-106.  Common law of trusts; principles of equity.

The common law of trusts and principles of equity supplement this Chapter, except to the extent modified by this Chapter or another statute of this State. (2005-192, s. 2.)


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